Interesting Article – China Energy Demand Estimates re Too Low

Interesting Article – China Energy Demand Estimates re Too Low

February 13, 2008 0 Comments

(February 13, 2008) – There is an interesting article in the current issue of the Energy Policy journal titled
A critical review of IEA’s oil demand forecast for China. The authors, Nel and Cooper from the Institute for Energy Studies, at the University of Johannesburg, South Africa , conclude that current estimates may understate China’s oil demand by as much as 10 million barrels per day in 2025. I have copied the abstract below. I hope it gets our policy (not)makers attention about the importance of energy R&D.

JR

Abstract

China has a rapidly growing economy with a rapidly increasing demand for oil. The International Energy Agency (IEA) investigated possible future oil demand scenarios for China in the 2006 World Energy Outlook. The debate on whether oil supplies will be constrained in the near future, because of limited new discoveries, raises the concern that the oil industry may not be able to produce sufficient oil to meet this demand.

This paper examines the historical relationship between economic growth and oil consumption in a number of countries. Logistic curve characteristics are observed in the relationship between per capita economic activity and oil consumption. This research has determined that the minimum statistical (lower-bound) annual oil consumption for developed countries is 11 barrels per capita. Despite the increase reported in total energy efficiency, no developed country has been able to reduce oil consumption below this lower limit. Indeed, the IEA projections to 2030 for the OECD countries show no reduction in oil demand on a per capita basis. If this lower limit is applied to China, it is clear that the IEA projections for China are under-estimating the growth in demand for oil.

This research has determined that this under-estimation could be as high as 10 million barrels per day by 2025. If proponents of Peak Oil such as Laherrere, Campbell and Deffeyes are correct about the predicted peak in oil production before 2020 then the implications of this reassessment of China’s oil demand will have profound implications for mankind.

John Rutledge

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