This is a very short post, fueled by Taco Bell euphoria on a friday afternoon.
So here's a thought: Many of the doomers are of the opinion that if oil production declines then GDP will decline because there is a 1:1 correlation between oil usage and the economy.
Sounds plausible right?
OK How about this for a thought experiment:
Simply buy as much oil as you can and burn it. Will that cause the economy to grow faster than anybody else?
In other words does energy inefficiency drive the economy?
I'll stick my neck out and say, NO.
I suspect that rather than the economy being driven by the amount of energy it consumes, I think there is a correlation (though NOT 1:1) between the better the economy, the more energy used all things being equal.
When you try to look at the data, however, it's hard to get a clear picture. What's definitely not true is that profligate energy consumers have the best economy in terms of GDP per head except possibly in the case of Norway.
Seems to be that Norway wastes a shit load of energy per unit of GDP and so also does Iran.
But yet, Norway is rich and Iran is poor. What gives? Maybe the *real* correlation is that if you have a ton of it, you *waste it*?
China (not a rich country in terms of GDP per head), the Netherlands and the US all use about the same amount of energy to produce a unit of GDP. China is partly self sufficient in energy and so is the USA. The Netherlands imports much of it's energy.
Germany, Japan, the UK and India all generate GDP using less energy per unit of GDP generated.
What's interesting about that is that if you look at the GDP numbers per head instead of GDP per unit of energy the ranking is different.
#1 Norway $52,238
#2 USA $47,132
#3 NL $40,777
#4 Germany $35,930
#5 UK $35,053
#6 Japan $33,828
#7 Iran $11,024
#8 China $7,518
#9 India $3,290
So what do the rankings show: The highest (out of this small section) is Norway, which has a large oil production per capita. The only other large oil exporter in the list is Iran who is down at the bottom end and nowhere near the rich countries. The world's pre-eminent manufacturing rising star is China, who is no more efficient nor more inefficient at producing GDP using energy than the United States or the Netherlands.
The interesting question is this: where are the countries placed who have no oil resources of their own?
Japan, the Netherlands and Germany virtually have to import all of their oil yet they are all firmly in the rich country grouping. What gives?
Perhaps the relationship of GDP to energy usage for a country is more complicated than the doomers make out hmmm?