For our first examination of the statistics of peak
oil, we look at consumption which is one of the least controversial aspects.
with demand rising around the world, it is by no means insubstantial.
The BP Energy Review unhelpfully gives the values in thousand barrels
daily. Converting to gigabarrels per year, this chart shows the worlds
consumption of oil from 1965 to 2006.
It is immediately noticeable that consumption rose steadily apart from
two blips, in 1974 and 1980. These oil shocks
were due to political effects rather than peak oil and have important
effects in many areas. It is important to be aware of what happened then.
The 1970s Oil Shocks
Extract from World Book encyclopedia
OPEC was founded in 1960 by Iran, Iraq, Kuwait, Saudi
Arabia, and Venezuela. At that time, the petroleum industry in these countries
was controlled by United States and European oil companies. These firms
paid the host governments income taxes and royalties based on the posted
price the companies charged for crude oil on the world market. In 1959
and 1960, oil production greatly exceeded world demand. The surplus that
was thereby created prompted several of the major companies to cut the
posted price and thus their payments to host governments. OPEC was founded
in response to this price cut.
OPEC had little influence on oil prices during the 1960s, when production
expanded to keep pace with demand. In the 1970s, however, world demand
for oil began to outgrow what was available from non-OPEC sources. In
1973, OPEC stopped consulting with oil companies and decided to raise
oil prices in keeping with the rate of inflation.
Armed conflict also contributed to rising oil prices. During the Arab-Israeli
War of 1973, some Arab members of OPEC stopped or reduced oil exports
to countries supporting Israel. As a result, oil prices in those countries,
including the United States and other Western industrial nations, rose
sharply. During the late 1970s, the Iranian revolution caused a shortage
that helped OPEC increase oil prices again.
OPEC was less successful at achieving its goals in the 1980s, when the
world oil supply again exceeded demand. In 1983, OPEC cut the price of
its oil for the first time. During the middle and late 1980s, OPEC set
production limits for its members several times. But many members ignored
the limits, thereby holding prices down. Although brief price increases
resulted from Iraq's invasion of Kuwait in 1990, oil prices remained stable
in the early 1990s.
The results of the oil shocks was worldwide double-figure inflation and
a stagnant economy.
The charts below show how the sudden increases in oil prices in the 70s
and 80s were reflected by unemployment, inflation and growth in the UK.
The results of the oil rises to come will be worse since there will be
no hope of the resumption of cheap oil.
The problems of oil consumption in the future revolve around two factors:
population and the increasing use from developing countries. A chart of
the US Census Bureaus world population shows that population is
expected to increase steadily over the first half of the this century.
(What it doesnt show is any drop in population that might be caused
by oil decline from wars, recessions, famine, etc).
More people means more demands for fuel, energy, plastics and food
all highly dependent on oil. In the ten years from 2002 to 2012, the
world population is expected to rise from 6.23 billion to 6.96 billion,
12% to be fed, supplied and energised. Along with population, the other
factor is the increasing use of oil in developing countries countries
which, up to now, had been contributing little to consumption. Compare
these charts of oil consumption from selected countries and regions.
The first two show the developed countries/regions of USA,
Europe, UK and South/Central America. Although the consumption is high
(as far as the USA and Europe is concerned), the trend is either gentle
or actually in reverse (note how the oil shocks of the 70s and 80s are
reflected again). The percentage changes from 1965 to 2006 range from
20% for the UK, to 203% for South/Central America with Europe and USA
sitting between (see Chart C10). This compares with overall world consumption
which grew by 168%.
But when we look at the charts for Pacific Asia and China, we see a
very different view. Chart C8 uses the same scale as Chart C6 and Chart
C7, and you can see how the whole of Asia Pacific has already surpassed
the levels of the USA and Europe and at a much steeper curve (a change
since 1965 of 649%. Chinas rise seems more gentle because of the
scale: if you isolate China and bring the scale down to fit (Chart C9),
the frightening rise in that countrys oil consumption is clear.
The percentage change over the 40 years is a whopping 3328%.
Below (C10) is a chart of those percentage changes and it shows the dramatic
difference between the developed and the developing world.
The clear omen from this is that oil consumption in Asia is going to
increase dramatically in the next few decades and this will outweigh
decrease from Europe and the US. The population of China, even with birth
control measures, is still expected to rise. This is the trend. In reality,
consumption will slow and decline as oil production decreases and recessions
bite, but the exact figures for that are impossible to calculate. What
is clear is that, if the world continues as it presently is
doing, oil consumption will continue to rise.
|** Indicates chart updated for 2008
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