The Growing Part of the World in Charts

Some parts of the world pretty much sailed through the 2008-2009 recession, while other parts of the world had huge problems. The part that sailed through the recession is what I call the “Growing Part of the World.”

I thought it would be interesting to see how the countries in the “Growing Part of the World” have behaved over the long term with respect to a number of variables (energy, GDP, and population). I compare these countries to two other groups of countries which did not fare as well during the 2008-2009 recession:

  1. European Union 27, United States and Japan
  2. Former Soviet Union (FSU)

Together these three groups equal the whole world, which is why I call the Growing Part of the World “Remainder” on my charts.

Figure 1 (below) shows that GDP growth rates have been quite different over the long term for the three groups, with the growth rate of the Growing Group higher than that of EU, US and Japan. The FSU’s growth rate has been more variable. Thus, it is not just during the 2008-2009 recession that the groups were different.

Figure 1 – Annual per cent increase in real GDP by area, based on USDA Economic Research Service data. “Remainder” corresponds to the Growing Part of the World.

The charts I have prepared show huge differences in variables besides GDP growth: in population levels, growth rate of population, and types of energy used, for example. The amount of energy for each unit of GDP varies widely, as does the pattern over time. While the FSU and the “EU, US & Japan” grouping show lower energy consumption for each unite of GDP over time, the Growing Group in total does not.

At the end of this post, I explain the reasons that why the Growing Part of the World seems to be doing so much better than the world economically and offer my view of what its prospects are for the future.

Which Countries are in the Growing Group (Remainder)?

The Remainder, or Growing Part of the World, includes:

  • China, India, Korea, Hong Kong, and other Asian countries, other than Japan
  • All of the oil exporting countries, including OPEC, Canada, Mexico, and Norway
  • Countries in Africa and Central and South America
  • Australia and the island nations of the Pacific

My split was calculated using readily available totals, so it isn’t perfect. Some individual countries might be handled differently. Also, there is a tiny overlap problem between EU-27 and FSU, handled by making the Remainder smaller.

The Growing Group is one group that has been making money from oil exports, although the amount that it has been making has been dropping, as the FSU’s share of oil exports grows. The Growing Group’s revenues from exports no doubt helped protect them in the past, at the same time that the cost of the imports handicapped US, EU, and Japan.

Figure 2. A rough calculation of expenditure (in 2011$) associated with oil imports and exports, based on 2012 BP Statistical Review data, for three areas of the world: the Former Soviet Union (FSU), the sum of EU-27, United States, and Japan, and the Remainder of the World. (Negative values from revenues are exports.)

Population

The growing part of the world is where population is growing:

Figure 3. World Population by Area, based on data of the US Energy Information Administration.

The population of the Remainder is huge–almost 6 billion.  Population (according to EIA’s International Energy Statistics) is growing about 1.3% per year for the area, but varies by country. China’s population is growing about 0.5% per year; India’s population is growing at about 1.4% per year, the rest of this group is growing by an average of 1.6% per year. Given that we have finite resources on the earth, continuation of this pattern looks like a serious problem.

Real GDP by Area

Figure 4. Real GDP by area in 2005$, based on USDA Research Service compilation.

A graph of real GDP for the three areas of the world shows that the Remainder (or Growing Area) is actually adding more dollar value of real GDP in recent years than EU, US, and Japan combined. In other words, the blue line is getting closer and closer to the red line. The FSU’s GDP continues to be quite low, but has risen since its low point in 1998.

Energy Consumption by Area

Energy consumption has varied greatly for the three areas:

Figure 5. Total energy consumption by area, based on BP’s 2012 Statistical Review data.

The Growing Area (Remainder) is now the largest consumer of energy in the world. Its energy consumption grew by an average of 5.0% per year between 2005 and 2011; the energy consumption of the FSU grew by an average of  0.7% per year in the same period; and the UK, US, and Japan’s energy consumption declined by an average of 1% per year in that period.

We can break down energy consumption into its components. First oil:

Figure 6. Oil consumption by area, based on BP’s 2012 Statistical Report

The production of world oil has been flat in recent years, but a person would never guess this by looking at the growth in the consumption of the Growing Group (Remainder). Between 2005 and 2011, oil consumption for the Growing Group  grew by an average of 3.1% per year. In comparison, oil consumption for the FSU grew by 1.2% per year between 2005 and 2011, and contracted by an average of 2.1% per year for the EU, US, and Japan combined.

Thus, there has been a huge rearrangement in who gets oil.

Figure 7. Coal Consumption by Area, based on data from BP’s 2012 Statistical Review.

The Growing Group (Remainder) has shown amazing growth in coal consumption since about 2002. The Kyoto Protocol, trying to discourage the use of coal, was adopted in 1997 (mostly by countries not in the Growing Group), but this does not seem to have changed any consumption trend lines downward. The sharp upward bend in the Growing Group’s consumption comes shortly after the China joined the World Trade Organization (November 2001). In total, the world’s use of coal, not shown on the chart, has risen sharply in recent years.

In the period 2005 to 2011, coal consumption has grown by an average of 6.5% per year in the Growing Group; by 0.6% per year in the FSU; and has decreased by an average of 1.8% per year in the EU, US, and Japan grouping.

Natural gas is the fossil fuel that by some calculations is less bad for the environment than oil and coal. Let’s see what happens with it.

Figure 8. Natural gas consumption by area, based on BP’s 2012 Statistical Review of World Energy.

Here again, the consumption of the Growing Group (Remainder) is growing much faster than the other two groups. In the Growing Group, natural gas consumption grew by an average of 5.6% per year in the period 2005 to 2011. Natural gas consumption grew by an average of 0.6% per year during that period for both the FSU and the EU, US, and Japan.

Let’s look at Nuclear next:

Figure 9. Nuclear electricity consumption by area, based on BP’s 2012 Statistical Review data.

The Growing Group’s (Remainder’s) nuclear consumption is growing, but from a very small base. Looking at the EU, US, and Japan, we might think that “peak nuclear” had come in the 2002 to 2004 timeframe. Growth in nuclear averaged 2.9% per year in the 2005 to 2011 period for the Growing Group; averaged 1.1% for the FSU; and amounted to an average decline of 1.8% per year for the EU, US, and Japan combined.

Even in the Growing Group, the growth in nuclear has been much lower than for other types of energy in recent years.

Moving on to Hydroelectric:

Figure 10. Hydroelectric consumption by area, based on BP’s 2012 Statistical Review.

Hydroelectric is the one area where the Growing Group (Remainder) started out in 1983 with the highest production of the three groups. The Growing Group has widened its lead in recent years, especially after China was added to the World Trade Organization in late 2001.

In the period 2005 to 2011, the Growing Group’s growth in hydroelectric averaged 3.9% per year; the EU, US, and Japan combined averaged 1.5% per year (although over the longer term this just looks like “wobbles”); and the FSU has contracted by an average of 0.4% per year during the same period.

One last group–Other Renewables:

Figure 11. Other Renewable Consumption by Area, based on BP’s 2012 Statistical Review.

This grouping is by far the smallest of the groupings. It includes wind, solar, and some other categories like geothermal, but does not include biofuels, which are buried in oil consumption.

In terms of total consumption, the EU, US, and Japan is highest, but in terms of growth rate, the Growing Group is out ahead. In the period 2005 to 2011, the growth in Other Renewables has averaged 17.9% for the Growing Group and 13.8% per year for the EU, US, and Japan combined. The FSU is basically not doing much in the way of “Other Renewables”.

Per Capita Energy Consumption

Exhibit 12. Energy consumption per person per year, in metric tons of oil equivalent, calculated by dividing Energy Consumption shown in BP’s 2012 Statistical Review by EIA’s population estimates.

Here we find that the energy consumption per capita of the Former Soviet Union (FSU) was virtually the same as (or a bit higher than) that of the grouping EU, US, & Japan, but started falling in 1991, and continued falling until 1998. The Growing Group has much lower energy consumption per capita, and it has been rising.

Looking at growth in average energy consumption per capita, we find that in the period 2005 to 2011, the Growing Group averaged 3.6% growth; the FSU averaged 0.9% growth; and the EU, US, and Japan averaged a decline of 1.4% per year in per capita energy consumption.

Energy Consumption per Unit of Real GDP

Figure 13. Energy consumption per unit of real GDP, based on Energy Consumption from BP’s 2012 Statistical Review, and real GDP from USDA’s Research Service.

Figure 13 shows that energy consumption per unit of GDP is vastly different for the three groups–in fact so much so that it is hard to put the lines on the same scale. In my view, part of the reason the that the FSU’s ratio is high is because the FSU’s GDP is depressed compared to that of  EU, US & Japan. This happens because much of what would be recorded as GDP in the EU, US, and Japan is done within the household sector, the informal economy, or as free government services. Also, the FSU is geographically very large and much of it is quite cold, so it requires fuel for heating and transportation, even if  little is produced as a consequence.

It is little hard to see on Figure 13, but the Growing Group’s (Remainder’s)  energy consumption per unit of real GDP has been pretty much flat for the entire period shown in the graph.

To get a better view of the situation, I made a second graph (Figure 14) that leaves off the FSU amounts, and instead substitutes the comparable amounts for the World as a whole. (The Remainder is still defined the same as it has been on the other graphs–it is still the Growing Group.)

Figure 14. Energy consumption per unit of real GDP for the World, for the EU-27, US, and Japan grouping, and for the Remainder (=Growing Group), similar to Figure 13.

What  we can see a little better with this scale is that energy consumption per unit of real GDP for the Growing Group (Remainder) has been essentially flat for the entire period of 1983 to 2011. In contrast, energy consumption per unit of real GDP has been falling for the entire period for the grouping EU, US, and Japan. For the period 2005 to 2011, the average percentage decrease in energy per unit of real GDP has been 1.6% per year, for the EU, US, Japan grouping.

World energy consumption per unit of real GDP was dropping until about 2000, after which it pretty much leveled off. The much bigger role that the Growing Group is now playing in total real GDP (see Figure 4), and the “flatness” of Growing Group’s Energy Consumption per unit of Real GDP would seem play a part in this leveling.

A Few Observations

These graphs demonstrate how wide ranging the differences in different areas in the world have been.

They also demonstrate that for the Growing Group, energy consumption has tended to rise as fast as GDP. I can examine this to a greater extent, in a future post.

The Growing Group has consistently done well in terms of economic growth. Part of the reason for this growth seems to the long-term ramp up in energy sources of all types, with the biggest emphasis on coal. When coal is internally produced, it is often a cheap source of energy, helping make these countries more competitive.

The Growing Group has a number of advantages:

1. Much of the group still has inexpensive energy resources that have not yet been exploited, that can easily be ramped up. If development of these countries had been going on for a long time (as in Europe and Russia) these resources would already have been developed. This is a big advantage for the Growing Group.

If we think of extraction of resources as working from the top to the bottom of a  resource triangle (see Figure 15), extraction usually goes from the cheap, easy to extract resources at the top of the triangle to the more expensive, slower to extract, resources at the bottom of the triangle. The later resources are often more polluting as well.

Figure 15. Author’s illustration of impacts of declining resource quality.

These resources are of a variety of types–coal, hydroelectric, and even oil and natural gas. To the extent that governments can exploit these easy-to-extract resources cheaply, and get the benefit of them without going through the world market, they can develop their economies directly. Even if the process involves a business from elsewhere extracting resources and selling them on the world market, local economies can benefit from increased employment and taxes on resource extraction.

2. Much of the Growing Group is in warm climates where houses can be built very inexpensively, people can commute by bicycle even during the cold part of the year, and the cost of living is very low–for example, China, India, Bangladesh, Thailand, and Philippines. These countries can pay low wages to their workers, and the workers can still have an acceptable standard of living. The wages of these countries can be extremely competitive with countries in harsher climates, since wages need to be higher there, to have an acceptable standard of living.

3. The push by developed countries toward energy efficiency, carbon taxes, and reduced CO2 emissions have inadvertently benefited many of the countries of the Growing Group. For example, if new, more efficient refrigerators are needed, it is the countries of the Growing Group who often produce them. Many solar panels are also produced in the Growing Group, and refineries that would be deemed too polluting for developed economies are built in countries of  the Growing Group.

The use of higher taxes on oil consumption and carbon taxes has inadvertently benefited the Growing Group, as well. What happened is that economists put their tax models together without understanding what happens when the total supply of an essential product is constrained. (Or perhaps they understood, but didn’t think such models applied to oil.)*

In the case of oil, we are dealing with a world market, and the total supply is very “inelastic”. This means that oil supply stays pretty much the same regardless of price, above a certain threshold.  If you or I eliminate our part of demand, the world oil price theoretically drops by some tiny fraction, but at this lower oil price, theres is still plenty of other demand elsewhere. So a tax that results in savings in oil consumption in, say, Spain, doesn’t reduce world oil consumption; it mostly shifts oil consumption elsewhere.

The graphs illustrate that, in practice, this seems to be what is happening. Taxes on oil consumption do serve a useful purpose, though–they help reduce the dollar amount of oil imports, and thus help the budgets of oil importing nations. They also help make the distribution of oil more equitable: countries with lower consumption get a larger share of the total. Energy taxes just weren’t explained that way.

4. Much of the Growing Group has a serious shortage of products and services that Europe, the United States and Japan take for granted, such as paved roads, water that can be drunk from the tap, motorized vehicles, and air conditioning. This means that there is a great deal of pent-up demand for “stuff,” and that stuff is generally made with fossil fuels.

What the Future Holds for the Growing Group

We can expect the Growing Group will gradually lose its ability to grow rapidly, as these countries gradually erode their resource bases, and lose the ability to keep ramping up energy extraction of various types cheaply. Whether or not “peak coal” is reached, imported coal tends to be quite a bit more expensive than locally produced coal, reducing the cost advantage of countries using it. We can see from Figure 2 that the relative dollar value of oil exports of the Growing Group is already declining.

Much of the Growing Group will have a cost advantage in manufacturing of goods as long as long-distance transport remains cheap and available, and local energy usage remains low, keeping the cost of living low. Countries in cold climates will permanently have a disadvantage because of the need for sturdier housing and the energy cost of  heating. Thus, the drain of jobs to the Growing Group can be expected to continue, as long as free trade is available and encouraged. This will make it difficult for manufacturing in the FSU and the EU, US, and Japan to be competitive, and will tend to keep the Growing Groups’s growth rate above the rest of the world. This will also tend to push the rest of the world toward recession.

Thus, my long-term expectation is that the growth rate of the Growing Group is likely to decline.  The growth rate will still stay above that of EU, US, and Japan, however. FSU cannot compete with the Growing Countries in manufacturing, so their growth will continue to depend primarily upon resource extraction. When FSU’s resource extraction starts to hit limits, their GDP will begin to decline as well.

Note:

*There are other issues with these taxes as well. They don’t apply to exports, and they don’t apply to imported products. Theoretically, they might work for coal and natural gas, if these other deficiencies were fixed as well.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply.
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71 Responses to The Growing Part of the World in Charts

  1. This whole article is fatally flawed from the start. The US is nothing like the EU or Japan in an “expensive oil” world. When oil is expensive, the US ramps up it’s oil production, and kicks off tremendous amounts of natural gas almost as a side effect. Thus, expensive oil translates into drilling jobs and reasonably priced gas for the US. This absolutely does not happen in the EU, nor in Japan.

    • I agree with you that the US is quite a bit different from EU and Japan. You remember my article Why high oil prices are now affecting Europe more than the US.

      I look at what happened in the past, in the charts. I am not claiming that what will happen in the future is the same for EU, the US, and Japan.

      • Leo Smith says:

        Definitely. I think Europe and Japan are very similar in general constraints. The USA is halfway between them and the developers – with some resources left. And a much lower population density than either.

        FSU is a weird one. a (mis)managed economy has left it with many resources and partial lack of development.

        I am not sure there is any other place quite like it – south america maybe.

        • I visited Russia earlier this summer. Interesting place! Lots of very old infrastructure, like a canal system and waterway from St. Petersburg to Moscow. It can’t be used for much more than a few tour boats and a small amount of freight, because of limits on lock capacity. (Our tour operator said they could not add boats, and needed to book lock space two years in advance, because of lock capacity issues.) A person sees lots of abandoned machinery that seems to have been used for something sometime. Drinking water has been declining in quality since 1991 because pipelines are not being maintained well. The standard of living is quite low–we visited three families where both the husband and wife were professionals, and heard their stories.

      • So if it’s different than why lump them together. It’s very misleading.

        I highly doubt US is experiencing anything remotely like peak nuclear, not if you measure KWHrs generated. And with regards to natural gas? Cmon, it’s use is surely growing as it displaces coal.

        This is a very misleading post. It is not experience peak nuclear, nor peak gas. Why graph it in a manner that implies otherwise, unless you’re just trying to mislead people.

        • A person cannot look at too many things at once, which is why I group countries. If I were to do a post on nuclear, I would look at the pieces separately, and you are right, the US pattern is quite different. US nuclear was increasing until 2007, and was flattish to 2010. It is down by a smaller amount than the other countries in 2011. So I am not really sure if it is following a pattern similar to the European countries and Japan, with a lag, or what. We don’t have the money to build more very many more nuclear facilities, so I expect the pattern of more closures than openings will hold. The reason we were able to increase generation until 2007 is because we kept running the facilities we had for more hours, and running them hotter–uprating the generation capacity. Arne Gundersen claims that design changes in order to upgrade the generation at Sanofre nuclear power plant went badly wrong, which is why the plant is offline now for at least the summer (when it is needed). So we may be hitting limits on nuclear as well.

          Our low natural gas prices indicate that we are not really using the gas we are producing. Ramping up and using natural gas is a very slow process, that can’t be rushed.

          • Your nuclear comments are interesting and have some truth. That said, both Presidential candidates are committed to building more plants, and the US is now borrowing money and some of the lowest interest rates in history. Considering that nuclear power plants, when built, last a very long time, and the fuel is cheap, and thus a significant expense is paying the interest on the loan used to build the plant, there is actually very little truth to your notion that the US is out of money to build. At some point US interest rates will rise, but for now the US has an incredible power to borrow, build long lasting infrastructure, and create jobs. There are very many pro-nuclear parts of the country that will welcome this infrastructure.

            Your comments re: natural gas are simply wrong. Gas is displacing coal in the US. The cheap gas is a result of the astounding production numbers, and not a result of this countries inability to ramp up production numbers.

            So I’d wager pretty comfortably that you’re wrong on both these counts. But I am much more confident re: gas. To argue that gas production is not increasing is a bit silly, it’s increasing, just not fast enough to offset production numbers that are blowing peoples minds.

            • What I said about natural gas is

              “Our low natural gas prices indicate that we are not really using the gas we are producing. Ramping up and using natural gas is a very slow process, that can’t be rushed.”

              Yes, in electricity generation we are using more natural gas and less coal. But it is not changing the equation fast enough, partly because of the warm winter. We still have far more in storage than is usual at this time of year. In the graph below, the red line can’t go any higher than the top of the grey range, come November or December. So we have to burn off enough between now and then, or reduce our production, or both, to keep natural gas to the level that can be stored for winter.

              Source: http://ir.eia.gov/ngs/ngs.html

              You may remember this chart from this post as well. All of the stories talk about ramping up electrical use of natural gas, but that is far from total natural gas use.

              US natural gas consumption by end use, based on EIA data.

          • Sorry a bit of word salad below. To argue that gas **consumption** in the US is not ramping up is silly. Gas **consumption** is ramping up, just not quickly enough to offset the almost silly high production numbers. Gas **production** is exceeding the optimistic estimates – probably as a result of the unexpected “high oil pays for more shale fracking yields both oil and gas, with the profit coming almost entirely from the former, and the latter thus being sold re:less of spot price”. This trend appears likely to continue so long as oil prices are high – it will run out eventually, but no-one sees the shale getting tapped out within the next decade.

          • Leo Smith says:

            lifetime costs on nuclear are much cheaper than so called ‘renewable energy’ and there is no reason not to build many more. Uranium is plentiful and very little of it is actually ‘used’ in the reactor.

            It is however more expensive* (and especially in capex) than gas and (more or less) coal.

            That makes it a risky investment IF cheap gas comes along.

            It is however the real alternative to so called renewables because watt hour for watt hour its less than half the price of the cheapest and a tenth the price of the most expensive, and in terms of carbon reduction even more cost effective.

            Taking religion out of power generation leads to two potential cost effective solutions – coal and gas – depending on the prices – where you don’t care about carbon emissions, and nuclear when you do. Or when your access to fossil fuel is limited or very expensive.

            Only areas able to offset existing high capacity (but rainfall limited) hydroelectric can truly benefit from renewable energy of the intermittent sort. Where the wind/hydro can co-operate easily and effectively and water be conserved by such wind or solar as is available. It never comes cheap however. Only here, and using onshore wind, can renewable energy actually be cost competitive overall with nuclear power.

            What this means in effect is that at a certain point – probably around the $130 a barrel oil equivalent value of natural gas, or coal, nuclear becomes the only viable economic power generation technology, for countries that lack extensive hydroelectic power.

            Japan’s recognition of this fact is reflected in their decision to restart their reactor fleet.

            Nuclear power has to be seen in the context in which it was developed – essentially to make plutonium for weapons irrespective of cost. As such it has been the natural target of negative propaganda and associated intrinsically with nuclear weaponry. Post Cold war, the need for reactors, with gas generation so much easier and cheaper, evaporated. That is why production declined. Cheap gas and high interest rates made it uncompetitive.

            Today with rising fossil prices and concern about carbon, it has to overcome the negative propaganda. Because there is nothing else that actually works reliably at sensible cost. And the cost dynamics of nuclear power are completely unlike the cost dynamics of conventional fuel – the fuel is almost irrelevant in its cost – all the cost is in building and running the plant and taking it to pieces when its lifetime ends. And the residues of fuel processing and reprocessing – depleted uranium and plutonium – are themselves potential fuels. Not to mention fusion power which may one day actually work….certainly there is enough potentially fissile material around for a few hundred years one way or another. Peak uranium wont be down to running short of it or its cost.

            Obama would be wise not to put all his eggs in the natural gas basket either.

            Fossil fuel – hydrocarbon fuel – is irreplaceable for much of transport – certainly aircraft cannot realistically use any other fuel, and wasting it on electricity production which CAN be made by other means is ill advised.

            A general overview of the available technologies shows that whereas coal is probably the best overall electricity baseload generator if you don’t care about carbon, with some gas or hydro to cover fast slew rates in demand.. or if you do, then replace the coal with nuclear and it amounts to the same dynamic performance as coal, but with far less carbon emissions, albeit at a 50% price premium over coal.

            Renewable energy of the intermittent sort is patently useless – a mere political gesture – unless co-operated with massive hydro power. .even then the low capacity factors make for very high costs and inefficient use of materials, and the low energy density means it must compete savagely with other uses of the land sea and low altitude atmosphere.

            So while I respect everything that is being said here about hydrocarbon fuel, I challenge many of the views on both renewable energy and nuclear power. The actual real life experience as opposed to the spin that surrounds them both is considerably different.

            These UK centric papers are interesting to demonstrate some of the issues of real world (as opposed to politically spun) issues of power generation. Its UK centric but the issues are similar in other countries.

            http://www.templar.co.uk/downloads/hughes-windpower.pdf

            http://www.templar.co.uk/downloads/Powerful_Targets.pdf

            My final point being that in reality nuclear power declined in step with political tension, rather than for any other reason, but it is likely to increase massively to replace coal and gas for baseload generation, either as and when those become too expensive, or politically unacceptable. Because there really is no other game in town. Countries that have massively deployed renewable energy show only high energy prices, uncompetitive industrial costs and almost no change in carbon emissions at all. Cf Germany and Denmark – compared to say Switzerland (100% nuclear and hydroelectric) and France (80% nuclear/20% fossil), they emit 6 times the carbon per unit electricity that France does and 10 times what Switzerland does. Because they have been unable to reduce their coal and gas generation at all. In fact Germany is building more coal to replace their politically terminated nuclear power.

            I cannot see nuclear power as anything other than the inevitable replacement of fossil baseload plant: Nothing else works. Renewable energy of the intermittent kind does not replace fossil plant, it merely causes it to be operated in a random and unpredictable fashion somewhat less (profitably!) than it would be otherwise, and that fashion has never actually been demonstrated conclusively to reduce fuel burn much at all! At least I have never found a study online in the three years I have been looking that uses actual fuel consumption data to demonstrate that adding e.,g. windmills to a gas and coal grid reduces the fuel consumption overall. The best real data seems to come from Denmark, where despite headline figures of 30% of the grid being generated from wind, the actual fuel savings overall were certainly less than 10% and possibly as low as 6% in an average year. And the electricity cost was about three times the equivalent nuclear cost of – say – France, whose policy would have netted them an 80% reduction in fossil fuel usage in electrical power generation..

            These actual real life figures are not often discussed: flags have been pinned to ideological masts and vast profits are accruing to those who can bend the ear of environmentalists and inexperienced governments, but in the end the real costs and performances cannot be hidden. Nuclear MUST show a resurgence – perhaps later in this decade if carbon reduction is not regarded as relevant by the emergent, economies, or sooner if it is.

            The USA can buy time with unconventional gas, and even waste money of renewables, but coal and gas at cheap prices are not infinite resources.

            In the resource stripped nations of Europe Japan, and the middle east, it is likley that nuclear power will be the only thing able to keep civilisations approximately alive. Those that fail to recognise that, may pay a very high price.

            *European prices are around $5bn per GW capacity. Comparable with offshore wind, but lifetime production is 6-10 times higher due to winds appalling capacity factors and short working life (and higher O & M costs). Additionally intermittent renewables must be co-operated with (unless you have massive hydro installations) existing fossil plant, and the reductions in efficiency of using fast dispatch plant to track wind variability, increase fuel consumption beyond simple analytic suggestions, so the actual fuel savings of renewable vary from non existent to at best only 75% of the actual power generated. As more capacity is introduced to the grid it also tends to reduce profitability of the co-operation technology – to the point where operators will choose fuel inefficient (but cheap capital) plant to run only when electricity is critically short in e.g. low wind periods. Thus potentially negating all benefits of the renewable source

            • If you read my posts, you will discover I haven’t been a big supporter of wind and solar PV, as additions to the grid.

              I haven’t been a big supporter of nuclear either, because I am doubtful that we can (1) keep the waste properly cooled, as the world economy is headed downward–too many power interruptions, (2)Find a way to store the waste long term, and (3) have funds and energy needed to decommission plants at the ends of their life-times. If I had a better view of the long term availability of oil/electricity, I might see things differently.

    • Mark N says:

      James McMurtry’s understanding of the global energy markets is fatally flawed from the start. When oil is expensive the US ramps up production by a small amount compared to its net imports. Oil is priced more globally than regionally and the higher prices needed to extract the unconventional oil does not translate to lower priced gas. Twisted logic at best Mr. McMurtry. High oil prices lead to recession and the demand destruction from the slowed economic growth leads to lower oil prices.

  2. Leo Smith says:

    Interesting, but I am not sure what it proves. Other than cheap energy=growth.
    And that trying to control fossil fuel usage is useless if the emerging economies don’t buy into the idea.

    So its basically not worth busting your own economy to stop something that someone else is causing – if you buy the AGW hypothesis, which I am less inclined to do anyway the more I understand it.

    Other than that it suggests that for the developed work growth has more or less stopped altogether and will continue to stagnate: some development is possible in the USA which still has fossil reserves but not Europe. Although the FSU has more potential than western Europe.

    It also strongly suggests that the areas that have to deal with resource shortages first will be Europe and Japan. Japan is by virtue of a strict anti-immigration stance already falling in population, and Europe would be apart from a very lax policy on immigration.

    • In some ways, it doesn’t prove a lot. I am afraid cheap energy = growth is what it proves. A person can’t really define a new way out–or at least the new ways some governments are trying to define aren’t working very well.

      I expect a desire to cut off imports/save oil for export was the #1 reason for high oil taxes in Europe, even if they were advertised as being good for climate change.

      • So if cheap energy equals growth, and natural gas and coal are both quite cheap in the US, and the US uses these two sources of energy more than it uses oil….. then the US will fail to achieve growth, because they US will be unable to burn less oil? Even though they’ve been reducing oil consumption for half a decade, and growing almost all that time? It all seems like a tight bit of circular logic that refuses to admit reality.

        • Oil is a transportation fuel. We have been moving off oil for stationary uses for years. At one point, we burned oil for electricity, but we stopped that (expect in Hawaii, where transportation of other fuels works less well) back in the 70s or early 80s. We can transition a bit to coal and natural gas for transportation, probably by burning the natural gas directly in some vehicles, or by developing electric powered vehicles. But this is a very slow process, and the amount of oil we use for transportation is high. There are also objections to using coal for this purpose. There certainly isn’t enough natural gas to substitute for both coal and oil in the US.

          • “There are also objections to using coal for this purpose. ”

            There are also objections to GMOs and mountain top coal mining. Objections mean very little in the absence of some effective legal mechanism. No one will stop a coal to liquid plant being built in West Virginia or Montana, for example.

            “There certainly isn’t enough natural gas to substitute for both coal and oil in the US.”

            Agreed. But it is also true that there is certainly enough coal, gas, and shale oil to substitute for the current US oil imports. This is even more true if you wish to substitute for ex-Canadien imports, which are dwindling rapidly even without any CTL of substance.

  3. JM says “When oil is expensive, the US ramps up it’s oil production, and kicks off tremendous amounts of natural gas almost as a side effect. Thus, expensive oil translates into drilling jobs…” We may be kicking off tremendous amounts of natural gas but in spite of the recent recession, the US is still a net importer of natural gas and especially crude as we sink deeper into debt.

    • The US is a net importer of natural gas? It’s certainly on the way to being a net exporter of gas. The only thing blocking it from doing so is a lack of export facilities.

      Your reading far too much into a US+Canadien combined gas glut. These two countries have more gas than they know what to do with. Does it really matter if the balance of flow tips slightly to the south? Particularly when its such a small percentage of production?

      No-one doubts that if the LNG export approval process is fast tracked, the US will become a net gas exporter shortly thereafter. Really. Doubting this is like doubting the moon landing.

    • You are right, in that we are importers of crude and natural gas. The drilling jobs are at least somewhat helpful in keeping things together. At least those people can feed their families–it is part of the reason we are doing less badly than Europe right now.

      • The US is a meaningful importer of oil, this is true. With re: to gas, we are, for all practical purposes, an exporter at this point. Canada has shale as well, and gas is moved on infrastructure, and hence cheap Canadien gas will go to American markets over more akwardly located cheap American gas. But that is not really meaningful in any real sense – the Canadien and American gas markets are very similar, and really should be thought of as one market. (Mexico is somewhat different, but you could use NAFTA as your “gas island” if you want).

        At any rate, the gas price differential between this NAFTA glut and the rest of the world is absurd. It is only the lack of LNG export plants that is stopping NAFTA from being massive gas exporters, not any lack of resources.

        And similarly, NAFTA is moving sharply towards net oil exports as well. NAFTA as a fossil fuel exporter in oil, coal and gas now seems inevitable – we are there with coal, almost there with gas, and moving sharply in the right direction with oil.

  4. Really Gail, what is the point of showing that the extemely Low End countries of the 3rd World are “Growing”? Of course they are “growing”, because they were so far down to begin with and are the last places that Industrialization has arrrived. Sadly for all of them, a bit LATE arriving in the Game of Industrialization, and the “Growth” figures merely show consumptive Growth, not productive growth by any means. All funded with Debt of course as always, and Credit is contracting on the highest levels now. These places are TOAST.

    I covered this in my Manufacturing Money article a few days ago.

    http://www.doomsteaddiner.org/blog/2012/07/03/manufacturing-money/

    RE

    • If people glorify growth, I think it is helpful to figure out where that growth really comes from.

      If I were to break it down more, the population growth figures would probably be highest where the countries are starting from the lowest base.

      Another way of writing the post would be to focus more on EU, US, and Japan, but a person really needs to break these out separately. A big part of their problems are the jobs and energy being shipped to the Growing Area of the world.

      In the Degrowth movement, there is belief that the developed world can stay flat, and the rest of the world can continue to grow, to even out the difference. WHen a person sees the huge number of people in the Growing Area, the gap with the rest of the world, it would seem like it might become obvious that this really can’t happen–we are hitting limits.

    • reverseengineerre says:

      I am not sure “people” in general “glorify growth”. This is mostly the purview of those running the economic show. At one level the Pols that get “Elected” like Obama and Merkel, at another level the Unelected Bankster CEOs like Lloyd Blankfein, Jamie Dimon and Bob Diamond, at a level above that Shadow Figures whose names we do not know pulling the strings of Economic Power at the Bank for International Settlements.

      In any event, any “Growth” now in the smaller economies comes at the expense of “Growth” in the large economies of the Industrial Model, since as you note we have hit the LIMIT of growth. You can go ahead and chart it, but it’s still essentially stating the OBVIOUS.

      What I think is more crucial to understand is that these Small Economies which APPEAR to exhibit rapid growth NOW are in fact the ones which will first be Triaged off the Oil Economy. They will be the first to lose access to Credit, before places like Germany and the FSofA do. This INCLUDES China. Steve from Virginia on Economic Undertow posted a marvelous article today analyzing the problem the Chinese face here in this spin down.

      http://www.economic-undertow.com/2012/07/06/merkel-capitulates-world-is-saved-now-what-2/

      Looking at the charts to observe false Growth in 3rd World economies takes your eye off the Ball here. Theyare not in fact “Growing”. They are DIEING.

      RE

      http://www.doomsteaddiner.com

      • Hi RE,

        Thanks for the link to Steve from Virtginia’s article. China does have a lot of problems. I looked not only at Steve’s article, but to a couple of articles that it links to.

        http://www.debtdeflation.com/blogs/2012/06/28/the-looting-of-china-by-the-kleptokapitalist-bourgeoisie-roaders/

        http://brontecapital.blogspot.com.au/2012/06/macroeconomics-of-chinese-kleptocracy.html

        There are a lot of things going on. The China system is going to get tripped up by cannibalizing the West, since we are dealing with a zero-sum game, as Steve more or less says. According to the second of the articles I linked to, China’s savings are abnormally high are because with the one-child policy, parent realize that when they are grandparents, there will only be one child to support four grandparents, so probably none of them will get anything from the kids. The money that the parents put aside is funneled to state run companies, who are effectively able to borrow at 1% with an inflation rate of 5% or 6%. They use this interest rate difference to fund all kinds of kickbacks and make things look better than they really are.

        I am not sure the same problems are in all growing countries, but they all have the problem of taking oil from a limited supply, so someone (Europe right now) gets left out.

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  6. Can fracking keep up with unremitting depletion and continued population growth in the US? Marketed production of natural gas in the US is only slightly higher than in the early 1970’s.

    • I take it your question is rhetorical. If we keep sending our industry offshore (industry is a big user of natural gas), maybe natural gas production will keep up with other demands.

      I don’t really know how the natural gas situation will play out. I expect supply somehow has to drop to the amount that currently can be accommodated in the system, so that the price can rise again to something that will half-way support natural gas extraction. It seems like there will be a bunch of natural gas companies going bankrupt, and perhaps some takeovers at very low prices. Maybe some former acquisitions can be spun off. Of course, if natural gas prices start going higher and staying higher, then we have problems with homeowners not being able to afford the price of air conditioning and home heating. For right now, we can enjoy the low prices.

      It seems like a country needs a way to set long-term stable prices and match supply with the price, like long-term contracts, or an oligopoly setting prices and production, or a government setting prices and production, to make natural gas extraction supply/demand system work. Otherwise, the lead times are too long, the investment too high, and the pricing system too unstable.

      • Leo Smith says:

        The UK is working on a methodology to fix the market for non carbon fuel based electricity using CfD (Contracts for Difference) – in essence it allows the government to set a strike price with the consumer and the generators essentially operating as counterparties: in return for guaranteed price for low carbon electricity, should the actual market price of electricity rise above that, the profits are rolled back to the consumer in terms of lower prices: Should say gas and coal prices fall below it, well the consumer is obliged to pay the ‘low carbon price’ to the generators of low carbon fuel.

        This is intended to derisk the downside and de-rate the upside from large capital projects that can generate low carbon electricity – essentially hydro and nuclear – , although wind and solar are able to take advantage of it too – except that the strike prices likley will never enable them to be profitable.

        Of course if the carbon fuel prices rise above the low carbon generating costs then no one will take advantage of the scheme at all – they wont need to.

        This may well be a model that gets adopted elsewhere: There is a huge problem with long term investment in markets where returns are highly tied to the prevailing short term price of oil and other fossil products. This system amounts to a technology neutral commitment by the consumer to forward purchase electricity at a fixed rate from non fossil sources.

        By replacing the investment model of ‘you might get nothing, you might get very rich’ with ‘you will get modest returns’ it is hoped that large sources of capital seeking fixed income returns – like pension funds – will be attracted to investment.

        Its a considerable advance over ‘we will pay you a very large sum irrespective of whether you generate any useful carbon reductions at all, as long as you can help us meet headline political targets for ‘renewable energy” that characterises the current subsidy structures. :-)

        • I think the downside of this (if there is one) is that governments are getting increasingly shaky as it is. It is easy to add more and more contingent liabilities to a government’s balance sheet. Everything is OK if things go well, but governments can easily discover that a lot of their contingent liability come due at the same time–bank guarantees, pension guarantees, loan guarantees. Here I don’t really understand the amounts at risk and other characteristics of the plan well enough to say much.

          • Leo Smith says:

            the idea is that it is not the government’s balance sheet: It’s the consumers’. i.e. the government merely legislates an agreement between producers and consumers. That ‘agreement’ (shotgun marriage) forces consumers to pay over the (fossil) odds if oil and gas prices are low, but limits the upside that may be charged by non fossil producers if the reverse applies.

            And leaves the choice for producers to join the scheme or not, at their own risk.

    • The US is exceeding the 70s peak by 10 to 20 percent – most would not refer to a bump in that range as slight.

      The US is posting these numbers in the face of, inflation adjusted, record low gas prices. The US consumer can almost surely bear prices twice the current spot price – particularly considering the superior efficiency of all the downstream consumers of gas that are coming online. I don’t think anyone doubts that a doubling of the spot price would push the production numbers significantly higher.

      Bear in mind, much of fracking is in it’s infancy. What do you think will happen when the US begins fracking the Alaska? There are no neighbors in Alaska to complain. There will surely be some form of ex-Alaskan gas export infrastrucre built within the next 20 years. If need be, they will build tranmission lines, and export the gas as electricity. There are transmission line connecting northern Oregon to southern California, the numbers to connect Alaska to Vancouver are similar.

      • It is expensive to make fracked gas–far higher than current selling prices. If you add on the transport costs from Alaska, it will be more expensive yet.

        I am not sure about the electricity idea either–line losses, cost, would Canada agree to it, would there be US buyers. We use most of our natural gas as natural gas, not as electricity. THe electricity would have to be cheap electricity to be used in preference to electricity from other sources.

        • Leo Smith says:

          Is that so? I thought the US used gas extensively in power stations? And did NOT have the sort of urban domestic gas supplies for heating that are prevalent in Europe?

          Golly. You are exactly right. Gas is second highest after coal just ahead of nuclear, with hydro being the only other serious supplier..

          Bit King Coal is by far the most crucial element.

  7. Doug W. says:

    Hi Gail – Good post. I recently read Jeff Rubin’s The End of Growth, and he talks about world energy, fossil fuels anyway, being a zero sum game. So I think the value of today’s post is that it supports that premise. Also, given the link between employment and energy consumption, if we export our “cheap natural gas”, won’t we also be exporting jobs? To me keeping that energy in the U.S. to create jobs that help us save energy and make our country more sustainable would make more sense.

    • I have Jeff Rubin’s new book too–need to take time to read it now.

      I very much agree that what we are dealing with is close to a zero-sum game, especially for oil.

      If we extract natural gas, and send it overseas, what we end up doing is making what would have been a cheap local product for us into a fairly expensive distant product for someone else (besides wasting part of it in evaporation as it crosses the ocean, contributing to global warming, and contributing at least a little to the higher overseas price). So they don’t get quite as much benefit as they might. We get a little benefit from the jobs of extracting it, and there are a few jobs associated with compressing it and shipping it that someone somewhere get. The real benefit of burning it of course goes to the overseas country.

      In the case of natural gas extraction and sending it overseas, I think it might actually make world GDP go up (or another way of thinking about it, move natural gas extraction earlier in the time it is extracted). At today’s low natural gas prices, no one would want to commit to a big natural gas development project. If higher prices can be arranged through long term overseas LNG contracts, then it may make natural gas extraction take place that wouldn’t take place until later (or at all).

      • It would be very, very challenging for LNG exports to meaningfully impact US gas prices at this point. You need to look at the export capacity of the LNG plants – they simply cannot push out BTUS at the same capacity as oil exports.

        So the US really does have “moderately” priced gas locked in for at least a decade. LNG exports would probably “floor” the price more than elevate it – they would help block the absurdly low spot prices we have seen. But I wouldn’t expect sustained Henry Hub prices over $5 mmBtu for the next decade, re:less of LNG gas exports.

        • Leo Smith says:

          Most of the major European imports and exports of gas are via pipelines. To and from Canada is a no brainer probably and there is a potential route to Asia via Alaska and Bering straits.

          But it is interesting to reflect that the price of shipping gas around may in the end make it a less globalised market than it might otherwise have been. And the impact of an industrial accident to a serious sized LNG tanker in a port..would make Fuskushima look like a picnic.

          I found your post interesting because it reflects back into the whole globalised/localised industry cost benefit analysis that is another area where high fuel prices in transport are de globalising industries. I am ashamed to say I haven’t actually done any research on that at all. Beyond extremely local calculations where its becoming cheaper in my neighborhood to buy local produce simply because in the UK transport fuel is horrendously expensive. And also its cheaper to ‘buy online’ and get delivery by couriers, who leverage the cost of the vehicle across many local deliveries, than to actually drive to the various malls where items an be physically purchased!. I am not suggesting this reflects the US experience but its interesting that it is happening here.

          Just an example of how comparatively high fuel prices drive a whole new behaviour pattern. I am ten miles from a supermarket and its is no more expensive to order online and take delivery, than do the round trip..

  8. John Dunn says:

    Good study.
    As an overview it appears that the Growing Part of the World, have come late to the party, and are trying to make up for lost time. But of course this is not possible given that they are using poorer quality resources and more expensive energy.
    At the same time, as you overlay the graphs, it seems that the FSU, is a very interesting case. They have a low standard of living and energy use, and in all likelihood, a low expectation of much improvement in standards. This together with their self reliant nature, which is probably, a legacy of their Soviet communist years, ironically makes them appear to be getting it right, or at least heading in the right direction of sustainability, indeed, survivability.
    It would interesting to study the FSU more closely, as a potential model of decline for the rest of the world. That study might also have observational value, taken in conjunction with their virtual outpost Cuba, which underwent an almost total loss of oil overnight when the FSU collapsed around 1997.

    Many thanks for your work

    • I should write another FSU post. I think part of the problem in the FSU is the high population. If local consumption goes up, exports quickly go to zero. The FSU doesn’t have much else going for it besides what it can pull from the ground, to trade with others, so it needs to limit domestic consumption.

  9. Shunyata says:

    Gail – absolute levels help us compare who is getting what. Presenting the above as log-graphs would highlight the phenomenal rates of change in the “all other” areas. When you consider that rate of change is being applied to the bulk of global population…

    • Thanks for the suggestion. I was running into problems fitting in as many graphs as I would like–I have many more I could put in.

      THe disadvantage of log graphs is not everyone understands them. So I need to explain a bit, and even then, it is a bit off-putting for some readers.

      I find the statements we hear about population leveling when mothers are more educated in particular being too little, too late, given the rate of population increase in the Growing Group. I expect that part of what needs to happen besides education is job opportunities, and the type of job opportunities most people are thinking about are jobs in the fossil fuel world. To make that happen, fossil fuel consumption would need to be much higher than today.

  10. Jonny Earth says:

    I’d be curious to see how the FSU compares to another northern cross-continental entity with fossil fuels, Canada. Also, an analysis of low income areas vs cultural factors, such as religion (e.g., Muslim, Catholic) that drive population growth even when urbanization is taking place.

    I lectured in the former USSR in the late 80s, as it was glasnost-ing and perestroika-ing toward devolution… food was used to control the population, with extra weekly portions delivered to the workplace for Communist Party or “Club” members (professional organizations controlled by the state, such as the Architects and Composers) … while I was there, Chernobyl-area products (dairy, meat) were being distributed across the Union, “for safety reasons” (as if) … one could not purchase seed or garden tools in the cities, so “locally grown” food required access to a dacha. Drinking water for Leningrad/St. Petersburg was 3rd world-y. A lot of history to overcome back in the FSU…

    • Interesting. My visit to Russia this summer was fairly short (two weeks) so I couldn’t see too much. Water supplies are still pretty third worldly–some Russians boil their water (don’t know the %), and we were warned not to drink the water. The Russian Water Association talks about the poor water quality and deterioration since 1991. http://nprvo.ru/en/water/sector/

      THanks for the idea about comparing Russia and Canada. A couple of observations: Canada’s population is tiny in comparison to Russia’s (34 million vs 140 million). Most of the Canadian population is right across the US border or on the coastline. Russia doesn’t have much of a coastline near habitable areas.

      I wonder if Russia is the country with the largest population in areas that get very cold in winter. Norway has 4.7 million population; Sweden has 9.1 million; Finland has 5.3 million. St. Petersburg seems to have a population of about 5 million by itself.

    • MarkH says:

      Canada does not model at all like the FSU, almost its polar opposite in fact.
      Canada has a very high per capita energy usage at about 9 tons oil equivalent per annum, one of the highest in the world. I think this is partly due to ongoing resource infrastructure development costs.
      A large proportion of this energy comes from hydro power (over 2 tons equivalent), with a comparatively low coal usage of about 1 ton (small by Canadian standards, but twice world average).
      Its renewables development has also been among the world’s most rapid, without much of the subsidization seen elsewhere.

      • Canada is a cold country and there is a lot of distance involved to transport things from one area to another. That is part of the reason for the high per-capita energy use. Norway also has high per capita energy use.

        • Markh says:

          Those facts are true enough,. It is cold with distance. I’ve lived in Canada all my life. If anything, distances from services were greater 40 years ago, with less efficient vehicles, and I remember the seasons as being colder. Yet our consumption of energy here is up more than 30% over that time span.
          Larger houses, less reliance on local resources especially food supplies and a highway system that is often build beyond real needs are all part of that consumption growth.
          Much of this is reversable, given time, Canada has more room for efficiency savings than most nationns.

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  13. Max says:

    FYI Gail (et al), beware of the troll going by “James McMurtry”. It is a well-known troll that until recently resided at SmartPlanet extensively deriding anything posted by Chris Nelder with oil company propaganda and bullying when the propaganda couldn’t unhinge facts, which happened constantly so his bullying got worse and worse.
    Haven’t seen his trolling of Nelder’s last 2-3 posts so the McMurtry may be looking for new grounds.
    Careful.

    • Thanks! It is very easy to block someone. I have several on my blocked list already. He is pushing the limits.

      • reverseengineerre says:

        Blocking or Censoring the Commentariat is VERY bad practice. There are many means to avoid haivng to do this sort of thing. I encourage anyone who finds their posting Blocked or Censored on any website to join the Guerrilla Internet Free Speech Project on the Doomstead Diner.

        http://www.doomsteaddiner.org/blog/2012/06/27/guerilla-internet-free-speech-project/

        RE

        • PeteTheBee says:

          Really – you’re going to shut down James McMurtry because he has views that challenge yours?

          That seems pretty absurd. Are you interested in informed debate or an echo chamber. He raised a pretty key point before he was kicked out (high oil prices DO subsidize the production of natural gas from wet shale – ask anyone in the industry Gail).

          Pretty disappointing.

          • I’ve made the comment about high oil prices subsidizing the production of natural gas from wet shale myself. Not sure where you get that idea from.

          • PeteTheBee says:

            Well, suffice to say Chris Nelder is one of the meaner guys from the “peak oil” world. I’m not sure I’d call someone a “troll” just because he teases Mr. Nelder – he really has alienated a lot of people, and he writes with a very different style from you.

            It’s your blog, you can kick Mr. McMurtry if you want – but writing posts that seem to fail to recognize the fundamental difference in Eurozone energy and North American energy isn’t insightful at all.

          • PeteTheBee says:

            Mean to say Mr. Nelder and has alieanted people with his style – I’d guess Mr. McMurtry has done the same. I wouldn’t pick a side in that squabble if I was you.

  14. According to the EPA, marketed production of natural gas in the US was 22,647,549 million cubic feet in 1973 and 24,169,613 in 2011, an increase of almost 7%. US population increased roughfly 50% during this period.

  15. Spain has also showed a very close tie between growth in energy consumption and growth in real GDP, with both growing by close to 3% per year between 1980 and 2005.

  16. Ikonoclast says:

    I’d like to leave a comment of support for Gail.

    (1) Some of the phenomena Gail graphs and explains might seem very obvious after we see her excellent graphs and text. Remember, even relatively simple new data is not “obvious” until someone researches it, shows it clearly to you and makes it obvious.

    (2) James McMurtey started out as very adversarial and critical but moderated his tone a little. In my opinion, some of his views are emotively based rather than empirically based. I have no opinion on his agenda; it might be from personal views or public political views.

    (3) An owner of a blog, like Gail, is within her rights to block posters who veer towards the insulting or who advance only emotive rather than logical arguments. This is especially so when a minority view is being expressed by the blog author (Gail) and this minority view is well supported by empirical data. Neoconservative and anti-Green propagandists own most of the corporations, the mainstream media and have the big political parties in their campaign contribution pocket. They are not short of avenues to push their views and propaganda. They should not be allowed to take over the few blogs that express the minority (yet most empirically sound) view in the general limits to growth field.

    • Thanks for your view.

      Also, readers decide whether they want to read the comments, based on whether the comments are well-reasoned and are ones they can learn something from. If a person is dominating the comments with arguments that few other readers are likely to want to read, it discourages readers from looking at the comments in the future.

  17. phil harris says:

    Gail
    Thanks for charts.
    Your chart for FSU oil consumption is reflected in the Export/Import ‘data-browser’ chart for Russia (subset of FSU); http://mazamascience.com/OilExport/
    where consumption of oil almost halved at the breakup of the SU and has barely risen since. It seems surprising that the Russian standard of living is as high as it is. Inequality in purchasing power was always there back in the days of the ‘nomenclatura’, but seems to have risen more recently to remarkable levels, (something we notice I have to say also back home in the UK), so the ability of most ordinary Russians to sustain reasonable living conditions is worth noting.
    As a footnote: Russia and the USA produce similar quantities of NG. Those numbers do not look as though they will change much in the very near future, which is just as well for the rest of Europe, EU etc., because Russia is a key resource vendor.* It is increasingly difficult to imagine Europe as separate from Russia, despite the vast Russian areas to the east. We are tied together industrially and if we include Ukraine, agriculturally as well, and we rely massively on NG for heat and electricity for our houses.
    * Northern (but not western or southern or eastern) Europe has a surplus of NG because of North Sea, but Norway and Denmark are the only ‘surplus’ countries and Norway looks as if it is approaching ‘peak’ production.

    • After thinking about it, I think that Russian oil consumption is as low as it is because Russia figured out that with its population as high as it is, it could not afford high per capita consumption, or it would not have anything to export. It doesn’t have much else to export (except natural gas, coal, and wood), so it has to keep individual oil consumption low.

      What Russia seems to be doing is reusing a lot of very old infrastructure, to keep energy costs down. They are not adding much in the way of roads. Some local roads are in terrible condition. The water/sewer system does not seem to be being kept up. My impression was that the government is not very active in many respects–people complained that if you lodged a complaint with the government, you would never hear back. I haven’t looked into what tax revenue looks like, but I expect that with everyone so poor, there isn’t much for government. Parking in Russia is a real mess–they haven’t set up much of a way of doing it. The investment coming to Russia today from outside is for things like selling fast food and imported cars and imported meat to Russians, not for upgrading general infrastructure.

      • Leo Smith says:

        All government is a self legalising protection racket. The USSR simply doesn’t bother to disguise that fact. It never needed to. I wish I could remember the name of the book referred to by Martin Wolf in et Financial Tise some years back – it made the point that what government you got was a stability calculation based on the economic resources you had, and that the case of ‘lots of minerals, and no skilled manufacturing’ gave the best cost benefit if it was run by a small gang of thugs who protected the resource and took profit from it, and shot anyone who they didn’t need to do that, who complained…. Only if there was a skilled artisan and mercantile bourgeoisie did democracy become cost effective…

        Nigeria..Russia..Libya..Iraq…Iran..

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  20. The only reason why Russia aka FSU exists is because we need it to sell natural resourses.
    Otherwise it would be modern Zimbabwe.

  21. b_f says:

    Although Chinese may have FINANCIAL problems, the PHYSICAL economy is doing fine. That’s a problem lots of the anti-Chinese crowd have – they look at some financial data and claim fraud out of some sort of insecurity or jealousy at someone else doing well.

    However, lets look at some physical facts. Total factor productivity growth is among the highest in the past 10 year period. You can’t massage figures like that, especially when they’re backed up by facts such as the college enrollment is up 25 times (!!!) in a 30 year period, scientific article s published is 2nd in the world at a 17% annual growth rate in the past 10 years (http://www.nsf.gov/statistics/seind12/c5/c5s4.htm) with a citation rate near that of Japan and South Korea, and far higher than Russia and India ( http://sciencewatch.com/dr/cou/2011/11decALL/ ). Also, it is important to note the type of papers being published. BRICS and Japan publish mostly in the physical sciences and engineering, the bedrock of economic growth or at least, preventing regression. The US and the EU publish mostly in the life and social sciences, which are much less profitable and are money sinks.

    What I’m seeing here is not as your links asserted, that ALL economies are equally screwed. Some are less screwed than others! Higher oil prices means that inflation is exported from producers of goods, not just oil but goods requiring oil, to consumers, as the producers are forced to raise prices in response to oil going up. At the same time, their growing consumption not related to industrial production is going to increase imports even further, putting an even greater pressure on net global exports along with population growth in oil producers.

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