Tag Archives: gdp

Low oil prices, budget deficits and OPEC

OPEC is known to have suffered economic damage as a result of low oil prices, but exactly how much?

GDP, 11 OPEC countries combined: Down from $3,392 billion in 2014 to $2,849 billion in 2015, a decrease of $543 billion.

Budget deficit, 11 OPEC countries combined: Up from $17 billion (0.5% of GDP) in 2014 to $278 billion (9.8% of GDP) in 2015, an increase of $261 billion.
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Electricity and the Wealth of Nations

There’s no doubt that electricity is fundamental to GDP growth and that wealth in our modern society cannot be created without it, but a key question is; which comes first? Does the electricity create the wealth, or does the wealth create the electricity, or is the linkage between the two so close that it’s impossible to say? Continue reading

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CO2 Emissions – Who Are Europe’s “Dirty Men”?

In his recent Emissions Reduction, Renewables and Recession post Euan Mearns made the following statement: “In terms of CO2 reduction (i.e. lack of it), Poland, Norway and Germany are the dirty men of Europe.” As we shall see Euan’s claim is broadly correct, but the success a country has had or not had in reducing its CO2 emissions is only one of a number of indicators that can be used to gauge its carbon dirtiness (or cleanliness). Here I use five different ones to rank 26 European countries by carbon cleanliness/dirtiness to identify who the dirty men of Europe really are. Continue reading

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China: post-industrial revolution

In this post I revisit the energy production and consumption data for China looking for clues about the future direction of global energy markets. China now consumes 23.2% of all energy consumed on Earth and clearly what happens in China will impact the whole world. Figure 1, lifted from the 2015 BP Statistical Review, shows how dramatically growth has slowed in China. Energy intensive steel and cement are barely growing as the era of industrialisation and building infrastructure comes to an end. So may this in part explain the 2014 oil price crash? Continue reading

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How To Mitigate Climate Change

An R squared value of 0.89 means in broad terms that about 90% of a country’s exposure to climate change is governed by its per-capita GDP and only 10% by actual changes in climate.

Which in its turn means that we are going about climate change mitigation entirely the wrong way. Instead of spending trillions of dollars building wind farms and rooftop solar installations in futile attempts to cut CO2 emissions we should be sending money to the poor countries to beef up their per-capita GDP. Continue reading

Posted in Climate change, Political commentary | Tagged , , | 73 Comments

Market Mayhem

Most readers of this blog should be aware that the price of oil has more than halved in the last 6 months rendering much of the global oil industry unprofitable which is an unprecedented disaster for all of those dependent upon oil in their daily lives. But what is the underlying cause of all this market mayhem and does it really matter? The S&P 500 is after all riding high and the US$ keeps marching towards new highs against the € and other currencies. This post takes a look at a number of indicators searching for answers which are elusive. Continue reading

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Oil price wars – who blinks first?

In the green corner we have the US shale producers. In the red corner we have the oil exporting countries of OPEC. Assuming the fight is fought to a conclusion, who wins? OPEC wins. The US shale producers will shut down first. Continue reading

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How cheap is “cheap” oil?

But since 1986 the picture has been quite different. The trend line is close to flat and doesn’t cross zero until the world spends ~8% of its GDP on oil, which with the world now spending 4% of its GDP on oil equates to an oil price of about $200/bbl. So according to our definitional scheme and based on the most recent 28 years of data the cheap oil threshold is now $200/bbl. Continue reading

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Brazil – Samba Energy

Brazil’s energy consumption has proceeded in lock step with indigenous energy production which together have provided the engine for economic and population growth. Herein lies a risk to the economy. Should Brazil fail to grow energy production in future the economy may either stagnate or the country will have to import more energy placing trade balance and currency at risk. Continue reading

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America energy independence

Talk of the USA becoming energy independent, even exporting oil and gas, is very much in the news. Indeed the turnaround from ever rising energy imports to declining energy imports has been spectacular (Figure 1) and on current trajectory it … Continue reading

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Goodluck Nigeria – a failed State

Average per capita GDP has grown in recent years on the back of rising oil price but stands at a little over $1000 per annum. Per capita energy consumption (excluding wood) is 0.12 tonnes oil equivalent per annum, a tiny fraction of N African neighbours. Continue reading

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Portugal – renewables to the rescue?

With no nuclear power either, the only indigenous primary energy production is from hydro and wind power which now accounts for 20-25% of all primary energy consumed and between 40-50% of electricity production which is a fair achievement. Continue reading

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Belarus grows while Ukraine withers

Since the mid 1990s the Belarusian economy recovered, showing strong annual growth and is now on a par with Turkey. This is a very different story to Ukraine where the economy, that was showing feeble growth, collapsed again in 2009 and has not yet recovered. Economic malaise will no doubt underpin the civil unrest in Ukraine. Continue reading

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Does the UK Economy Run on Energy or Hot Air?

Much of the growth in the UK economy since 1980 is indeed hot air while energy consumption still underpins the real economy providing heat, light, food, shelter, security, mobility and enormous leverage in manufacturing. Continue reading

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Getting the Economics Numbers Right

All numbers are wrong, the only question is by how much. Continue reading

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Turkey – on its way to a mature economy

Turkey is energy poor, has essentially no oil and gas production and imports significant amounts of oil, gas and coal. It has broken free of developing nation status and is on its way to becoming a mature economy. The country has seen an enormous uplift in per capita GDP since 1970 that now stands at $8,500 per annum. Continue reading

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Ukrainian Death Spiral

Russia has raised natural gas prices to Ukraine twice this week. There is a risk of mounting chaos. Continue reading

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Post-peak Algeria?

Algerian exports of oil and gas, mainly to Europe, peaked in 2005 and have since fallen by 24% / 628,000 barrels oil equivalent per day. Those countries thinking of switching supplies from Russia had best not look to Algeria, N Africa’s biggest gas producer and exporter. Continue reading

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Russian Power

In 2012 Russia produced the equivalent of 26 million barrels oil per day spread between oil, natural gas, coal, nuclear and hydro electric power [1]. Just under 50% of that energy was exported, approximately 12.2 million barrels oil equivalent per day, mainly to western Europe and former Soviet republics Continue reading

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Egypt – energy, population and economy

Decline in oil and gas exports and increasing cost of food imports resulted in Egypt’s trade deficit with the rest of the world growing to £12 billion in 2012 [2]. Debt : GDP stands at a manageable 81% but Egypt can ill afford to allow this to grow indefinitely [3]. Egypt needs a plan to boost exports and to use its energy resources to produce higher value GDP. Continue reading

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