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China Will Force The World Off Oil

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An interesting article published by the US based "Council of Foreign Relations" (CFR), so it's not lightweight stuff !! Please see below link for diagrams & full text;

If China continues to consume oil at present rates it's set to increase oil consumption from present levels of 10% to over 70% of Global Production within the next decade !!

For your info., the USA only consumes 22% of Global Production today !!!! :unsure:

Thus unless either China curtails its Growth or alternatives to hydrocarbons evolve within the next decade it's likely the we will face resource scarcity by 2020 in all areas, as oil is used to drive the Global Economy, International Trade, Food Production, etc., etc. !!! :o

Methinks its time to become more eco-friendly in all sectors & gradually switch to non-hydrocarbon based energy sources before 2015 !!

A great focus in the 21st century must be local production to save on distribution costs - thus perhaps Chinese / Indian (developing Countries) imports will, over time, become prohibitively expensive for us due to increased shipping costs ??

Indeed the Developed Economies of USA / Europe / Japan could introduce 'ECO' Taxes on imports from countries such as China & India based on levels of CO2 per 'unit' these countries emit in comparrison to 'Developed' & 'Greener' economies like Germany.

The rational for such taxes would be that developing economies enjoy unfair advantages in manufacturing by employing 'outdated' production methods & 'labour intensive' methods which produce more CO2 per unit than say an equivalent German supplier.

Thus, Developing Economies have an unfair advantage at the expense of the Global Environment (and USA/EU/Japan Economies !!). Indeed there is a double wammy as many developing economies (such as China) artificially devalue their currencies to make their exports cheaper for us !!

Hence, an ECO Tax (ON PRODUCTION) would benefit the Developed World Economies and ensure smooth progress to alternative energy sources -

Such a 'TAX' could be levied on goods imported from developing Economies such as India & China and paid directly on importation into EU / US / Japan by Buyers.

Thus, over time, Buyers would source more 'Green' suppliers as there would be no advantage to them in shipping goods half way across the Globe if import price equals local / EU source production.

Within a very short space of Time The EU would eliminate Soverign Debt as it would regain its Position as NO.1. Manufacturing Centre of the World, low unemployment, etc., etc.,. I dare say US would follow in similar economic fashion due to fact they also have large internal market & extensive Technological / Education Base which developing economies now lack.

Sorry, if looks 'Cut Throat' but if resoiurces are not there what can Politicians do......................!!!!!!

We need a 'LIFEBOAT' Strategy to preserve the UK / EU / US / as well as Developing Economies...................... as resources are FINITE....... FINITE based on todays Technologies.............. But perhaps innovation can save day ??

see link below:

My link

China Will Force the World Off Oil

As a country’s per capita income increases, its per capita oil consumption increases. Consumption growth tends to be modest up until $15,000 income per head, but then accelerates rapidly. China is quickly approaching this point. South Korea, which consumes 3% of world oil output, is too small to disrupt oil markets. China is too big not to disrupt them. Were China’s per capita oil consumption to be brought up to South Korea’s, its share of global consumption would increase from today’s 10% to over 70%. In order to cap China’s share at 22%, which is the U.S. share today, global oil output would have to increase by a massive 13% per annum over ten years – well beyond the 1% growth averaged since 1975. This rate of growth is inconceivable, even if vastly more expensive sources of supply, such as the Canadian oil sands, were developed at breakneck speed. If China’s recent economic growth pace continues, it will surpass South Korea’s current per capita GDP shortly after 2020 – meaning that the world may be forced onto alternative energy sources much sooner than it realizes.

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It is a good point that oil use tends to take off after a nation gets to 15,000$ gdp per capita. As car use expands of course at that point so dramatically.

Some back of the envelope calculations.. South Korea uses 2.2 million barrels of oil per day for a population of 48 million. Taiwan uses 950,000 barrels for a nation of 23 million. That use is quite a bit higher than say the UK which uses 1.75 million bpd for 62 million citizens.

Since China has 1,338 million citizens if they went to the South Korean level of use that would be 61 million barrels per day. And world oil use being 85 million barrels per day that is indeed 70% of current world use.

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It is a good point that oil use tends to take off after a nation gets to 15,000$ gdp per capita. As car use expands of course at that point so dramatically.

Some back of the envelope calculations.. South Korea uses 2.2 million barrels of oil per day for a population of 48 million. Taiwan uses 950,000 barrels for a nation of 23 million. That use is quite a bit higher than say the UK which uses 1.75 million bpd for 62 million citizens.

Since China has 1,338 million citizens if they went to the South Korean level of use that would be 61 million barrels per day. And world oil use being 85 million barrels per day that is indeed 70% of current world use.

Don't forget India..

But it's a trivial calculation to work out that even with the most optimistic estimates, there is absolutely no way that the world can use oil at European, let alone US, rates - this would require sustained world oil production of ca. 200Mb/d or 400Mb/d, respectively.

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It is a good point that oil use tends to take off after a nation gets to 15,000$ gdp per capita. As car use expands of course at that point so dramatically.

Some back of the envelope calculations.. South Korea uses 2.2 million barrels of oil per day for a population of 48 million. Taiwan uses 950,000 barrels for a nation of 23 million. That use is quite a bit higher than say the UK which uses 1.75 million bpd for 62 million citizens.

Since China has 1,338 million citizens if they went to the South Korean level of use that would be 61 million barrels per day. And world oil use being 85 million barrels per day that is indeed 70% of current world use.

Thanks for calculations !

If you accept those final figures where does that leave main trading blocs of EU / USA / Asia Pacific ??

Will the likes of India & China sit back & allow Developed nations to hold them to ransom by restricting essential energy supplies needed for their industrial development ?

Methinks that US Foreign Policy has been directed toward securing Strategic Oil Supplies. The US has alliances with Top 3 Countries with oil reserves; Saudi Arabia, Iraq, and Kuwait which account for 46.1% of total Global reserves !

reserves.gif

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Don't forget India..

But it's a trivial calculation to work out that even with the most optimistic estimates, there is absolutely no way that the world can use oil at European, let alone US, rates - this would require sustained world oil production of ca. 200Mb/d or 400Mb/d, respectively.

Don't shoot the messenger ! :lol:

peak_oil2.jpg

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It is a good point that oil use tends to take off after a nation gets to 15,000$ gdp per capita. As car use expands of course at that point so dramatically.

Some back of the envelope calculations.. South Korea uses 2.2 million barrels of oil per day for a population of 48 million. Taiwan uses 950,000 barrels for a nation of 23 million. That use is quite a bit higher than say the UK which uses 1.75 million bpd for 62 million citizens.

Since China has 1,338 million citizens if they went to the South Korean level of use that would be 61 million barrels per day. And world oil use being 85 million barrels per day that is indeed 70% of current world use.

Just think about what South Korea and Taiwan make, and how much oil (and water) that requires. Compare that with financial products, which just need a bit of hot air and champagne. No wonder we are so eco-friendly.

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Thanks for calculations !

If you accept those final figures where does that leave main trading blocs of EU / USA / Asia Pacific ??

Will the likes of India & China sit back & allow Developed nations to hold them to ransom by restricting essential energy supplies needed for their industrial development ?

Methinks that US Foreign Policy has been directed toward securing Strategic Oil Supplies. The US has alliances with Top 3 Countries with oil reserves; Saudi Arabia, Iraq, and Kuwait which account for 46.1% of total Global reserves !

reserves.gif

Of course not, it's going to get very ugly indeed. True human nature will show itself.

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Thats why coal, coal to liquids, LNG and nuclear are such sure fire bets.

Absolutely. Too little to late to replace oil, but energy will be the next boom for sure (along with arms, agri land, commodities & rare earth metals)

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Methinks that US Foreign Policy has been directed toward securing Strategic Oil Supplies. The US has alliances with Top 3 Countries with oil reserves; Saudi Arabia, Iraq, and Kuwait which account for 46.1% of total Global reserves !

Ah, and guess what's going to happen with no. 4?

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Peak oil is nothing new.

I have not read the report but if it follows your summary then it's blaming 'developing' countries for their uptake in consumption.

Why is their consumption increasing? Because they want what we have, naturally. Does it mention that the developed world is richer exactly because it already nicked all the good stuff?

I totally agree that resource* depletion is arguably the biggest challenge facing humanity - I dare not add MM climate change for the vitriol that the subject generates - but from your summary that article sounds like VI, resource grabbing spin. No offence meant to the OP, I just get annoyed when I see 'naughty developing country' posturing; in % terms it's us that caused the problems.

* fossil fuel, top soil, water

Edit: clarity

Edited by OMG

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Don't forget India..

But it's a trivial calculation to work out that even with the most optimistic estimates, there is absolutely no way that the world can use oil at European, let alone US, rates - this would require sustained world oil production of ca. 200Mb/d or 400Mb/d, respectively.

India could take a little longer to hit the takeoff point than China.. India is probably a good 10-15 years behind China. But still even if India merely doubles consumption over the next decade that will require ~3 million extra bpd.

I think the oil industry would have a lot of trouble getting to 110 million bpd by 2020. 100 million bpd I think is doable if the price is sustained high enough.

This Chinese potential take off as car use explodes around the 15k gdp ppp is very bullish for oil.

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Just think about what South Korea and Taiwan make, and how much oil (and water) that requires. Compare that with financial products, which just need a bit of hot air and champagne. No wonder we are so eco-friendly.

Its amazing how much energy these nations are producing, it must be going to industrial production like you say. Another interesting look is the takeoff in electric production by South Korea and Taiwan. In billion kilowatt hours. And per capita in kilowatt/hours per capita.

Taiwan 1980: 42.013

1990: 77.991

2000: 172.021

2007: 224.985

Per capita 2007: 9,739 kwh

South Korea 1980: 34.472

1990: 98.124

2000: 248.632

2008: 415.939

Per capita 2008: 8,645 kwh

United Kingon 1980: 264.918

1990: 298.307

2000: 352.390

2008: 362.903

Per capita 2008: 5,838 kwh

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Are you sure those charts are really true?

That BP find which ended in a bit of a spill was huge.

I bet that there is more of the black stuff under the Falklands than is left in Saudi Arabia.

And we have loads of coal under the UK, which can be turned to oil like stuff at a pinch. Were sorted I tell you.

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