There is quite a bit of material to cover here, so I will limit my introductory remarks to a reminder that the "remaining Asia Pacific" (rAP) refers the group of countries in Asia, other than the countries of the former Soviet Union (FS), China (CH) and Japan (JP), all of which have been discussed in previous parts of this series.
Asia Pacific’s production, consumption and net export trends: an ELM analysis
Figure 44 presents the BP review’s reported petroleum production, consumption and calculated net exports rates (dark blue, bright red and dark green open circles respectively) and the corresponding nonlinear least squares analysis (NLLS) logistic equation best-fit curves (solid lines with the same respective colors).
The best fit parameters of Qo, Q∞ and the rate constant "a" are summarized in Table 10 below:
Table 10: summary of best fit parameter for production and consumption data for rAP
As illustrated in Figure 44, after declining to a local minimum in 1982, rAP’s petroleum production rate slowly increased and then hit a peak of 1.6 bby in about 2000. This peak reflects a composite of production peaks for several major producers in this region:
Indonesia in 1991, Australia in 2001, Vietnam and Malaysia in 2004, and in 2006. Since peaking, the production rate has slowly declined, e.g., in 2011 production of 1.43 bby was 88% of the peak rate in 2000. Brunei
In contrast to flat to declining production, rAP’s petroleum consumption accelerated after 1982, similar to CH (see Figure 39, Part 9). Larger countries in this region seeing multifold increases in consumption since 1982 include:
India, South Korea, Taiwan Thailand and . Vietnam
Still, the overall relative increase in production in this region is not quite as dramatic and sustained as CH’s relative increase. Part 9, showed how CH’s consumption rate from 1982 doubled two times by 2004, and might double again by 2016, if it can find the oil to import or produce domestically (which I double). The consumption rate in rAP doubled from 1982 to 1994, but, since 1994, has risen by “only” another 70 percent. The deceleration is also indicated by the best fit of the logistic equation to the consumption data, suggesting that consumption might be at or near peak.
Predicting Petroleum Export Rates from rAP to other Regions
Figure 45 shows the relationship between petroleum production rates and export rates for rAP, as already worked out in my previous study from a few months ago. This figure is the same as Figure 9 in Part 2 of “Relationship between Petroleum Exports and Production.”
Despite overall production rates peaking in 2000, the trend is for increasing exports as a percentage of production (solid regression line, r2=0.52). However, this overall positive trend is combination of declining exports to JP and NA, and, increasing exports to CH, EU, SA and AF.
Figure 46 shows the predicted absolute regional exports from rAP to the other regions. These plots are based upon the combination of the production rate trends shown in Figure 44 and the export trend lines shown in Figure 45.
According to this prediction scenario, rAP’s absolute total exports (black line) will peak at about 0.7 bby in 2012-2013. About 43% and 22% of rAP’s total exports in 2011 went to CH and JP, respectively (compared to 35% and 48% respectively in 2000). Exports to JP are on trend to end in about 2026. Exports to CH are predicted to peak in about 2015 and decline thereafter.
Predicting Petroleum Import Rates to rAP from other Regions
Figure 47 shows the sum (black line), and individual import contributions, predicted for each of the other eight regions, to rAP.
This figure reminds me of the analogous figure for JP (Figure 37 Part 8) in that import are highly reliant upon ME. Of the 3 to 4 bby in petroleum imports to rAP from 2000 to 2011, 80 to 72 percent came from the ME. That’s about the same as the proportion of JP’s imports coming from ME. What is different is that imports from the ME to rAP have been going up over the last decade while imports from ME to JP have been going down.
It should be no surprise that I am predicting rAP’s total future imports to be substantially defined by what is expected for ME’s future export trends. Because I am expecting ME’s exports to at peak now and to decline in the near future, I expect rAP total imports to peak in 2012-2013 and decline thereafter.
Several other regions export relatively smaller amounts (<0.4 bby) of petroleum to rAP (AF, CH, SA, EA, JP, NA) and these add up to about 0.8 to 1.1 bby, with various predictions of ebbs and flows from these regions over the next 50 years, as illustrated in the lower portion of Figure 47.
Predicting Consumption Rates for rAP based on the PIE analysis
I applied my normalization to rAP in the same manner as done for NA, SA, AF, EU, JP and
For rAP, the average calculated consumption rate, based on the summation of production plus imports minus exports for the 2001-2011 time range, was 0.151 ± 0.111 bby lower than the reported consumption rate for rAP as reported in the BP review. Therefore my normalization for CH consisted of adding 0.151 bby to the predicted future consumption rate and adjusting total net exports downwards by this same amount. And, like the other regions, I did not attempt to distribute this correction proportionally among the individual absolute exports and absolute import to and from each of the other regions. CH.
Figure 48 shows the production, consumption and net export data, and corresponding best fit curves, the later two now shown as dashed lines. Added is the predicted net export (light green solid line representing total absolute exports minus total absolute imports with the -.151 bby correction) and consumption (blood red solid line) rate prediction curves, based on my PIE analysis (exports minus imports with the 0.151 bby correction).
The results presented in Figure 48 suggest that, if rAP’s production rate follows the decline trend predicted by the logistic equation best fit (solid blue line), and rAP’s export and import rates continue along the trend lines shown in Figures 46 and 47, respectively, then the predicted total net export rate curve (solid light green line) reaches a peak negative value of about -3.4 in 2013, corresponding to peak net imports, after which, net imports start to decline.
My PIE and the ELM analysis are in good agreement, giving very similar prediction curves for rAP’s consumption. Apparently for the ELM analysis there is enough deceleration in the reported consumption data for the NLLS best fit of the logistic equation to predict a present peak and decline, in agreement with the PIE analysis, which only looks at production, import and export trends (see Part 1 for a reminder).
The rAP’s combination of trends peaking net imports and decreasing domestic production, leads to my prediction that rAP consumption rate is peaking now at about 4.8 bby in 2010-11 and consumption will decline thereafter. Essentially, declining domestic consumption and the prediction of declining imports from its primary source, the ME, set rAP on a downward trend in the future.
At least the downwards decline is fairly mild, at first. From 2011 to 2021, consumption is predicted to decline -13%. But the decline in consumption picks up after that (as imports from ME and domestic production both go into faster decline) with a 33% decline from 2021 to 2031, and then 43 % decline from 2021 to 2031. Overall from 2011 to 2041, consumption is predicted to have declined by 67%.
Summary & Conclusion
The remaining Asia-Pacific regions has seen substantial increases in petroleum consumption for the past three decades, but the trends in this analysis suggest that further increases are unlikely. After domestic production peaked in 2000, the last decade’s increase in consumption was fully supported by increased imports, and mainly imports from the
Middle East. But, as I pointed out in Part 2 the Middle East’s production has likely peaked and it own domestic consumption is increasing. This means that the remaining Asia-Pacific regions can no longer expect continued increasing imports from Middle East.
At least the remaining Asia-Pacific region’s predicted consumption decline rate for the next decade will be a mild -1.3 %/y. This is much milder than expected consumption decline rates in
Japan (-5.2 %/yr), Europe (-3.2 %/yr) or North America (-2.2 %/y) for the next decade and beyond. But, by about 2021, as the decline rate in imports from the Middle East, and, domestic production rate both steepen, the remaining Asia-Pacific’s consumption rate decline is predicted to be in the range of -3.3 to -4.3 %/y.
A look at the net importing regions
Now that I have finished my survey of the five net importing regions (NA, EU, JP, CH, rAP), and in fact, completed my nine-region analysis, I want to step back and take a broader look at these net importing regions divided into major groups: the developed world (NA, EU and JP), and, developing Asia (CH and rAP). I am painting with a very broad brush stroke here, so apologies to
Australia and New Zealand for being lumped into developing Asia.
Looking at these two net importing groups gives us an opportunity to explore and test the concept of what Jeff Rubin refers to a “zero-sum world.” The concept as I am applying it here is fairly simple: in a world of a static pool of oil available for exports, increasing petroleum consumption in one net importing region due to increase oil imports means decreasing imports in another net importing region.
Does the present study provide any support for this?
Yes, it does somewhat, although some other trends are more complicated than that.
Figure 49 shows the sum of imports from each the net exporter regions (ME, FS, AF and SA) to my two net-importer groups: (NA EU JP; solid lines) and (CH rAP; dashed lines)
Figure 49 shows that from 2000 to 2011, there was a substantial decline in imports from ME to the NA EU JP groups (turquoise blue solid line) and a concurrent similar magnitude increase in imports from ME to the CH rAP group (turquoise blue dashed line).
That is, NA EU JP’s loss of oil from the ME appears to be CH rAP’s gain. A zero-sum world.
Sort of the same “zero-sum” scenario is repeated for SA’s exports although the trends are less convincing. From 2000 to 2011 there have been flat-to-slightly declining imports from SA to the NA EU JP group (lime green solid line), but, a concurrent larger increase in imports from SA to the CH rAP group (lime green dashed line). So “zero-sum” is not as convincing because the CH rAP group gained substantially more imports from SA since 2000, than the decline in imports to the group NA EU JP. In other words, SA was able to support oil imports to NA EU JP at a flat-to-slightly-declining rate while at the same time, greatly increasing imports to CH and rAP. The predicted future import trends suggests that perhaps the “zero-sum” trend will become clearer for SA.
Something other than a “zero-sum” scenario has been happing with respect to FS’s and AF’s imports to these two groups. I will call it “win-win,” because imports to both net importer groups has been going up over the last decade.
Imports from FS and AF to the NA EU JP group (solid purple and brown lines, respectively) both went up substantially since 2000—in fact, slightly more than enough to offset the declining imports from ME and SA. However, imports from FS and AF to the CH rAP group (solid purple and brown lines, respectively) also went up substantially since 2000, thereby supporting even greater consumption rate increases in this group.
Figure 50 shows the consumption data an predicted future consumption (from the PIE analysis) added all together for the two net importer groups.
In comparison, imports to the CH rAP group dramatically increased since 2000—this is due to increased imports from all four of the net importer ME, FS, AF and SA. Total import increases are predicted until 2015, after which a mild decline in imports is predicted.
The predicted decline rate in imports to the NA EU JP group is so steep, that in about five years, 2018, it crosses below the milder predicted import rate to the CH rAP group.
Of course, a major goal of this study was to get some insight into what consumption rates might look like in view of the predicted domestic production, import and export trends—my so-called PIE analysis—for each of these nine regions. We know from Part 6, Part 7, Part 8 that domestic production in NA is flat, is declining in EU, and is substantially non-existent in JP. That steep decline in imports predicted for the NA EU JP group gives us a big hint about what’s in store for consumption rates for these regions going forwards.
Here it is in Figure 51, the predicted total consumption rates of the NA EU JP groups versus to CH rAP group.
In view of the above considerations, it is no surprise to see that, over the next 20 years, the predicted petroleum consumption rate decline for the NA EU JP group is much steeper than for the CH rAP group. For instance from 2011 to 2031 petroleum consumption in the NA EU JP group is predicted to decline from 14.9 bby to 6.2 bby, a 58% (-8.7 bby) decline. In comparison over the same period, the predicted decline in consumption for the CH rAP group is from 8.2 bby to 6.1 bby, a 26% (-2.1 bby) decline.
Interestingly, by 2029, the NA EU JP group and CH rAP group are predicted to have nearly the same consumption rate of about 7.0 bby and 6.8 bby, respectively.
What kind of world will that be in 2029?
Well, at long last, I have completed my nine region analysis. I will linger with the results for the next post or so, to explore the economic and population trends that these predicted consumption trends might imply (hint: I think that looking at per capita consumption could provide some interesting insights).