$this->bbcode_second_pass_quote('joewp', '')$this->bbcode_second_pass_quote('kmann', '')$this->bbcode_second_pass_quote('cube', '
')As mentioned before the USA increased it's energy efficiency by outsourcing the grunt work to China.
PeakOil is You
Oil Consumption vs GDP
Re: Oil Consumption vs GDP
by MrBill » Wed 04 Jul 2007, 03:21:31
I see this statement frequently on these boards, but I have never seen it backed up with data or research. I think it is just accepted because it fits in nicely with the prevailing views around here. It needs to be backed up with proof. Anyone?
$this->bbcode_second_pass_quote('Daily Times', '
')China oil imports up sharply
BEIJING: China’s imports of crude oil jumped in January to May, driven by the country’s double-digit economic growth while growth in oil output almost stagnated in the period, state media said Tuesday.
Bolstered by its blistering economic growth, net imports of crude by the world’s second largest oil consumer rose 11.5 percent to 65.8 million tonnes in the five months, the China Securities Journal reported. However, the country’s own oil production during the period rose only marginally by 1.7 percent to 77.5 million tonnes, the newspaper said.
With domestic oil reserves drying up, China is having to look for energy resources overseas to fuel its voracious economy that expanded 10.7 percent last year, marking a fourth consecutive year of double-digit growth.
Oil imports up 11.5%, while economic growth up just ("just", hehe) 10.7 percent. Highly inefficient if you consider China all alone.
If you consider China as the US's manufacturing base, however, it appears the the so-called US's "efficiency" is really powered by oil consumption in China. How much of the US "GDP" is sales as Walmart and other retail establishments who are merely fronts for Chinese manufacturers?
Sorry I can't give you hard numbers, but I think the point is made.
Sorry Joe, but I do not think it proves anything. For one, the USA is still the world's largest manufacturer, not China. The USA is just not the world's largest exporter. That honor goes to Germany for the past two years in a row. And a lot that China exports is imports for assembly for re-exports. Yes, they are moving up the value-added chain - too fast for comfort for some - but the bulk of their exports is still in relatively low tech garments and textiles. That export business is highly sensitive to exchange rates.
Also, you say $this->bbcode_second_pass_quote('', 'O')il imports up 11.5%, while economic growth up just ("just", hehe) 10.7 percent. Highly inefficient if you consider China all alone.
That is all very well and fine, but from the headline numbers you have to add in domestic Chinese oil production, which is in decline, but still accounts for more than 50% of their needs. Expected to fall from 60% to 40% of their needs as Chinese oil fields mature and imports take up the slack. Also, from imports you have to deduct re-exports of refined products to the rest of Asia.
In summary, it is really difficult to get good, hard numbers on total Chinese oil consumption. A lot has to be extrapolated, so I would be wary of headline figures.
Also, I do not know if you read this posted above, but again I take exception to efforts by some to make value judgements about the importance of 'services' versus 'industrial production' because they are both clearly important AND mutually re-inforcing.
$this->bbcode_second_pass_quote('', 'A') friend of mine just finished structuring a $1 billion deal to build a NG N2 plant in the ME. It was syndicated to 10 international banks. They must hold at least of 50% of those loans on their own books, but they can sell off the other 50% to other banks or investors.
So of course to build such a plant in the ME to produce NG, which will be sold to produce food somewhere else, generating economic gains that can be taxed to pay for social services as well as providing livelyhoods at each step of the chain you require a lot of 'services'.
Services such as engineering skills, project management skills, lawyers with international experience, banks with their risk management skills, salesmen that sell off pieces of the syndicated loans, all the way back to the independent investment advisors that help allocate individual investment portfolios for savers/investors around the globe.
So the industrial production in the ME that supports growing food is dependent on services. No legally binding contracts with many covenants, no syndicated loans, and no funding to build the NG plant.
If one step in that process generates, say, $100.000+, in fee income along the value chain then I do not see how that is somehow inferior to building a tractor or combine worth $100.000+ in order to plant and harvest the grain that depends on that N2 fertilizer?
Obviously any physical energy shortage effects both the goods and the services dependent on that supply of NG that will reduce GDP at all stages of that value-added chain - NG production, agriculture, manufacturing and services.
The numbers that I have seen, and sorry, I also have no links readily available, is that in terms of energy input to output the ranking is as follows:
Japan 67%
Germany 75-80%
USA 100% of G7 average, while
China 400% of OECD average.
I do not have any better numbers, but China's goal is to double economic output while cutting that from 400% to 200%, but 200% is still a lot higher than Japan, for example, making them more sensitive to oil price shocks.
And as I have previously mentioned, their energy mix is dirtier with more coal than the others, so they also emit more pollutants as a percentage of GDP, and soon in absolute emissions. Plus there is less political will to cut those emissions as China tries to close the GDP gap with Germany, Japan and the USA.
The organized state is a wonderful invention whereby everyone can live at someone else's expense.
