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The IEA's Dire Warning For Energy Markets

The IEA's Dire Warning For Energy Markets

Global energy investment “stabilised” at…

Oil Dependency Climbs As Supply Rises And Prices Fall

Gas Pumps

(Click to enlarge)

Headlines around electric cars and carbon policy suggest our oil dependency is on a slippery downward slope. Recent data from 2016 suggests the opposite: our worldwide addiction is getting stronger.

Oil consumption versus economic activity (GDP) measures the energy “intensity” or “dependency” of our lifestyles to the wonder-fuel we love to hate. A steepening upward slope implies greater dependency and vice versa.

Before 2000 it took about 550 B/d to lubricate a change of $US 1 billion of global GDP growth. Higher oil prices from ’02 to ’13 lessened our dependency to 240 B/d through efficiency and substitution. Post the 2014 price crash we’re back up to guzzling 360 B/d for every extra billion dollars of petroleum-fuelled economy.

Gasoline demand is up, because people are driving more kilometers. And 50 million new petroleum vehicles (net of retirements) are hitting the road per year; over 30 million in Asia alone. Petrochemical demand is solidly correlated with economy.

Why are we surprised? When a product gets cheaper people use more.

By Peter Tertzakian for Oilprice.com

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  • Naomi on June 22 2017 said:
    Shale methods unlocked a trillion bbl of oil locked in stripper wells. The holes are dug. The pipe to refinery is laid. Bring on the frackers and harvest the loot.

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