Energy industry
From Wikipedia, the free encyclopedia
The energy industry is a generic term for all of the industries involved the production and sale of energy, including fuel extraction, manufacturing, refining and distribution. Modern society consumes large amounts of fuel, and the energy industry is a crucial part of the infrastructure and maintenance of society in almost all countries.
In particular, the energy industry comprises:
- the petroleum industry, including oil companies, petroleum refiners, fuel transport and end-user sales at gas stations
- the gas industry, including natural gas extraction, and coal gas manufacture, as well as distribution and sales
- the electrical power industry, including electricity generation, electric power distribution and sales
- the coal industry
- the nuclear power industry
- the renewable energy industry, comprising alternative energy and sustainable energy companies, including those involved in hydroelectric power, wind power, and solar power generation, and the manufacture, distribution and sale of alternative fuels.
- traditional energy industry based on the collection and distribution of firewood, the use of which, for cooking and heating, is particularly common in poorer countries
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[edit] Defining the energy industry
[edit] Government classifications
The United Nations developed the International Standard Industrial Classification, which is a list of economic and social classifications.[1] There is no distinct classification for an energy industry, because the classification system is based on activities, products, and expenditures according to purpose. [2]
Countries in North America use the North American Industry Classification System (NAICS). The NAICS sectors #21 and #22 (mining and utilities) might roughly define the energy industry in North America. This classification is used by the U.S. Securities and Exchange Commission.
[edit] Financial market classifications
The Global Industry Classification Standard used by Morgan Stanley define the energy industry as comprising companies primarily working with oil, gas, coal and consumable fuels, excluding companies working with certain industrial gases.[3]
Add also to expand this section: Dow Jones Industrial Average[4]
[edit] Environmental impact
Because of government encouragement in the form of subsidies and tax incentives, energy conservation efforts are also being increasingly viewed as a major function of the energy industry, as saving an amount of energy has almost identical economic benefits to generating that same amount of energy. This is compounded by the fact that the economics of delivering energy tend to be priced for capacity as opposed to average usage. One of the purposes of a smart grid infrastructure is to smooth out demand so that capacity and demand curves are more closely aligned.
The energy industry generates a large amount of pollution, including the generation of toxic gases and greenhouse gases from fuel combustion, nuclear waste from nuclear power generation, and oil spillages in the petroleum industry. Government regulations to internalize these externalities form an increasing part of doing business, and the trading of carbon credits and pollution credits on the free market may also result in energy saving and pollution control measures becoming even more important to energy companies.
[edit] References
- ^ United Nations economic and social classifications Accessed 6 April 2007.
- ^ United Nations Available Classifications Accessed 6 April 2007.
- ^ MSCI-Barra GICS Tables Accessed 6 April 2007.
- ^ Industry Classification Benchmark for Dow Jones Indexes (United States) and FTSE Indexes (United Kingdom) (pdf)
