[lbo-talk] GDP, PPP and Btu

Tom Walker timework at telus.net
Sun Jun 27 09:10:10 PDT 2004


It's possible, perhaps useful, to bring together two threads here: "End of Suburbia: Peak Oil" and "GDP per capita/Dougs comments". The Energy Information Agency of the U.S. Department of Energy publishes a statistical series showing energy consumption in Btus per US dollar of GDP.

http://www.eia.doe.gov/emeu/international/total.html#IntlConsumption

Several comments can be made at a glance. One, U.S. energy consumption per dollar of GDP (2002) was twice as high as Germany's and 75% higher than France's. Japan's energy intensity was 37% of the U.S.'s. Second, China's energy consumption was more than three times that of the U.S. To some extent, a country's energy intensity of GDP reflects opportunistic decisions -- a major petroleum producer can use a lot because, in effect, it's "free". On the other hand, the pattern presumably reflects to some extent past investment decisions in infrastructure and climatic and geographical characteristics.

With regard to the PPP discussions, the consideration of energy consumption as a constituent of GDP highlights how misleading is a literal reading of GDP as indicating well-being. Azerbaijan consumed 14 times as much energy per dollar of GDP as the U.S. in 2002. Presumably, this was entirely because the resource was there and thus the price in Azerbaijan was insignificant. It would be interesting to do some comparisons of the PPP indexes and the Btu per GDP tables. I wonder to what extent they would show similar trends.

By the way, if you visit the web page mentioned above, don't miss the chart showing the relationship between world oil prices and US GDP. http://www.eia.doe.gov/emeu/security/gdpwop.gif

Tom Walker 604 255 4812



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