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China and Its Impact on World Energy Consumption
Dan Westbrook
Energy Consumption 2004
UKGermanyIndia
JapanRussia
China
US
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
US China Russia Japan India Germany UK
MMBOE
Energy Consumption vs. World Population
US
China
RussiaJapan
India GermanyUK
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
0
5
10
15
20
25
30
35
40
45
50
MMBOE
% WorldPopulation
2004 Energy Consumption
$GDP*/BOE
World
US
China
Russia
Japan
India
Germany
UK
0 200 400 600 800 1000 1200 1400
$GDP/BOE
* 2004 GDP $PPP
0
50
100
150
200
250
300
350
400
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
GDP per capita (PPP, $1995)
Prim
ary
Ener
gy
per
cap
ita
(GJ)
Source: UN and DOE EIA
Energy use grows with economic development
US
Australia
Russia
BrazilChina
India
S. Korea
Mexico
Ireland
Greece
FranceUK Japan
Malaysia
energy demand and GDP per capita (1980-2002)
0
50
100
150
200
250
300
350
400
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
GDP per capita (PPP, $1995)
Prim
ary
Ener
gy
per
cap
ita
(GJ)
Source: UN and DOE EIA
Energy use grows with economic development
US
Australia
Russia
BrazilChina
India
S. Korea
Mexico
Ireland
Greece
FranceUK Japan
Malaysia
energy demand and GDP per capita (1980-2002)
4x GDP / 2X Energy
Issues Going Forward
• Political unrest / security of supply• Growth in world economy, especially in India
and China (and growth in overall population)• Environmental issues – carbon tax?• Development of new sources of energy
Thank You
Backup
1. ~ 23% of world’s primary energy comes from natural gas, 6% from Hydro, 6% from Nuclear, 28% from Coal, and 36% from oil 1. Oil R/P is ~ 40 (and it has been ~ 40 for the last 10 years, was actually lower prior to that time Gas R/P is ~ 65 (and has been over 60 for the last 20 years) Coal R/P ~ 200 yr1. Today – production is ~ 82 mmbod spare capacity is few % (1 to 1.5 mmbod)2. Early 80’s production was ~ 60 mmbod spare capacity was on the order of 25%3. On a real basis, using CPI as the adjustment, the peak price for oil was in 1979 when it was just Almost $100/bbl7. Average energy growth is just over 2% per year, average oil growth is just under 2% per year. 8. Main drivers for increase in price of oil:
1. Increased consumption – lower spare capacity2. Geopolitical issues (Nigeria, Venezuela, Iraq, Iran 3. Hurricanes in 20054. Oil as a financial instrument
9. World oil reserves have been increasing as far back as you go. Due to improved exploration and Improved recovery10. Carbon emissions up 4.8% in 2004, and 2.9% in 200511. Oil inventories are actually above average since Jan0512. Refining capacity: global distillation usage was 86% in 2005, only 700,000 bod capacity added in 200513. Nuclear power plants: 4 new in 2005, 2 in Japan, 1 in Korea, 1 in India14. Wind produced 0.7% of world’s electricity in 2005. BUT 30% growth / yr over last 10 years. US got 0.4% of electricity from wind15. Only about 20 to 25% of the worlds energy is used for transportation, more in developed countries, Less in developing countries16: Hubbard prediction: somewhere between a few years and 20 (non-open) or 30 years (OPEC)17: CO2 atmospheric concenrtration was 280 ppm several hundred years ago, now 380 ppm
