October 31, 2008

Asia Likes Energy, Especially Coal

This chart from BP's Statistical Review of World Energy shows coal production and consumption in 1997 and 2007. Whereas both production and consumption stayed relatively flat in most regions, Asia was a huge exception.

Coal consumption grew in 2007 by 4.5%, according to BP, well above the 10-year average. "Coal was the world's fastest-growing fuel for the fifth consecutive year. Growth was above average in all regions except the Middle East. Chinese consumption growth accounted for more than two-thirds of global growth." Coal is especially important in Asia, as the chart below shows. It makes up 70% of China's energy use.

The reserves situation also shows the pronounced domination of coal, which has a reserves to production ratio of 130 years, far larger than oil or natural gas. BP says that coal has emerged as "the world's fastest growing fuel in part because reserves are located in key consuming countries."

Several years ago, Marc Faber looked to previous experiences of rapid industrialization to forecast the growth in Chinese and Indian oil demand. In the United States, per capital consumption of oil rose from one barrel per year in 1900 to 28 barrels a year in 1970; in Japan the rise from 1950 to 1970 was from one barrel to 17. In China, by contrast, "oil demand per capita [in 2004] is still only 1.7 barrels per year, and for India it has only reached 0.7 barrels. By comparison Mexico consumes annually about 7 barrels of oil per capita and the entire Latin American continent around 4.5 barrels."

According to Simmons' latest figures (October 21, 2008), India now uses 3.2 million barrels per day and 1.1. barrels per person a year. China uses 8 million barrels per day (up from 3.5 million in 1997), but still only 2.3 barrels per person a year. Demand in the United States, by contrast, totals 24 barrels per person a year.

The main point: If the developing world develops per capita energy consumption anywhere near the levels of previously industrializing societies, the effort to arrest the rise in global temperatures seems doomed. The following chart from National Geographic suggests as much.

Update: here are the July 2010 projections of the Energy Information Administration for world use of coal:

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