SnapChart – Oil Dependency Grows with Falling Price
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.