Sunday, January 27, 2013

Post Peak Oil Economic and Population Scenarios: Part 4 Export Mitigation strategies

Part 1, Part 2 and Part 3 of this series presented my 9-region global survey of the per capita petroleum consumption changes predicted from the population trends, and my predicted petroleum consumption trends from in my previous series, “Predicting Global and Regional Petroleum Consumption Trends” (starting here at Part 1). 
The major premise of this analysis, as discussed in Part 1, is that the current trends in the petroleum production rates, import rates and export rates for each of these 9 regions will continue along their current logistic or linear trend lines, and, that these trends can be summed up to predict what the petroleum consumption rates will be for each of the regions.  The predicted petroleum consumption rate trends, divided by the predicted population change trends, courtesy of the US census bureau, allows me to predict the trend in per capita petroleum consumption rate for each region. 
For reasons already presented in Part 1, I believe that per capita consumption rate is an important indicator of the direction and magnitude of economic growth/de-growth, and, that below a certain low level or per capita consumption (e.g., less than 1 barrel of petroleum per person per year, b/py) the petroleum driven food production system of a region starts to decline, along with a concurrent and proportional an increase in starvation and death in that region.  In particular, my thesis is that that the extent of population decline is in direct proportion to that needed to keep per capita consumption at 1 b/py, until the population drops to its pre-petroleum era population, which I have assumed to equal that region’s population in 1900.
Nine region scenario summary
Table 1 summarizes the predicted annual percent change per capita consumption rate scenarios over three different time ranges, and, the year when a region drop to 1 b/py, or alternatively, that regions per capita consumption rate at the end of my study period in 2065.
Table 1: Regional changes in per capita consumption rate and year to reach 1 b/py, or, rate in 2065
Region
2011-2020
2020-2040
2040-2065
Year to reach 1 b/py or rate in 2065
The Net Exporter Regions
ME
-0.3
-2.3
-1.6
 down to 1.9 b/yp by 2065
FS
-7.0
na
na
 >1 b/py by 2022; ~0 b/py by 2026
AF
-7.9
na
na
 >1 b/py now; ~0 b/py by 2026
SA
-1.3
-1.4
-0.3
 down to 2.5 b/yp by 2065
The Net Importing Developed Regions
NA
-3.1
-2.3
-1.6
 down to 4.2 b/py by 2065
EU
-5.0
-3.6
-0.6
 down to 1.3 b/py by 2040
JP
-4.8
-4.8
+20
>1 b/py by 2034; 0.2 b/py by 2040
The Net Importing Developing Asian Regions
CH
+0.9
-1.3
-1.7
 down to 1.5 b/py by 2065
rAP
-2.2
-3.3
-2.7
>1 b/py by 2031; >0.2 b/py by 2065
Although all nine regions suffer serious declines in per capita petroleum consumption over my study period to 2065, some regions have much sooner and steeper declines than other regions. 
In the short term, from the present until 2020, CH fairs the best with an overall slight increase and ME is next best off with a very mild declines in per capita consumption.  Next best off is SA with only a -1.3 % decline, followed by rAP with a -2.2%/y decline.  Then there are progressively steeper annual consumption rate declines of -3 to -5 %/y from NA, to EU to JP.  At the bottom are FS and AF.  The annual per capita consumption rate declines of -7 to -8 %/y for AF and FS are extremely large, because of the bad combinations of trends for declining domestic production, increasing export rates and low to zero import rates for these two regions. 
From 2020 to 2040, CH’s per capita consumption rate change becomes negative, ME’s goes more negative, and SA slow decline stays about the same.  The rAP region joins EU and JP with similar steep annual declines in per capita in the -3 to -5%/y range while the decline rate in NA starts to level off to about the same decline rate in ME of -2.3 %/y. 
I highlight the four regions, FS, AF, JP and rAP whose per capita consumption rate decline in 2020 to 2040 drops below my critical level of 1 b/py.  My prediction curves suggested that AF is about at this level now, and that FS will drop below this level in 2022.  Two other regions, rAP and JP, drop below this level about a decade later in 2031 and 2034, respectively.  Notice how close that EU is to this critical level by the end of this time range in 2040. 
From 2020 to 2065 to decline rates for many regions (NA, SA, EU, rAP, ME) are starting to level off compared to the 2020-2040 period but they are stilling falling.  JP has an apparent large percentage increase in per capita consumption mainly due to the prediction of continued imports from NA and because the increase is from a near-zero per capita consumption rate in 2040.  Per capita consumption rates decline in CH is still steep than in the 2020-2040 period.  No other regions drop below 1 b/py, although EU is precariously close at about 1.1 b/py.
Mitigation Scenarios for FS, AF, JP and rAP
As I noted above, the four regions of FS, AF, JP and rAP are at the greatest risk of dropping below my predicted critical per capita consumption rate level where the petroleum fueled food production system becomes compromised, and, starvation and population decline sets in.  
Although one could fantasize about various more pleasant mitigation scenarios, like dramatically increasing domestic petroleum production, massive food production increases, independent of petroleum consumption, massive voluntary population control, etc..., I don’t see signs of any of these things happening in the new 10 to 20 years.  Rather, I expect that the most likely mitigation scenario is that these regions will try to cut their exports of petroleum in favor of domestic petroleum consumption.  Furthermore, I expect that this mitigation effort will start to occur right at the point where the per capita consumption for that region reaches 1 b/py. 
Why do I expect this mitigation measure later, rather than sooner?  That is, why not just start cutting petroleum export rates right now? 
Well, at three reasons, anyone of which would be sufficient: first, lack of recognition of the problem; second, these regions, or at least governments in these regions, rely heavily on the income that their petroleum exports bring in; and, third, humans generally do not act to mitigate a problem, like imminent starvation and death, until it reaches crisis proportions.
In the mitigation scenarios to follow for these four regions, I assume that each of the four regions will not act to cut their export rate of petroleum until that region’s particular per capita consumption rate reaches 1 b/py, and, I assume that the extent of export rate reduction made will only be enough to keep the per capita consumption rate at 1 b/py for as long as possible. 
Of course, once the sum of domestic production plus whatever imports a region gets drops below 1 b/py, my scenario of starvation and population decline sets in anyways.  However, I expect that even putting off mass starvation and death by a few years would seem like a bargain, when the time comes for these regions. 
Okay, let’s see what an export restriction mitigation scenario might do for these four regions.
Export Mitigation scenario for the Former Soviet Union
I’ll spend some extra time here to describe the figures here, and, the reader will understand that all subsequent figures presented for the other regions are in the same format.
Figure 19 reproduces Figure 10 from Part 3 of my previous series, showing the petroleum production, consumption and net export data, and corresponding best fit curves (shown as dashed lines) and the PIE analysis predicted net export (dashed light green line) and consumption (dash blood red line). 
Added to Figure 19 is my mitigation scenario for this region: starting in 2023 when the per capita petroleum consumption reaches 1 b/py, net exports (solid green line) are cut back sufficiently each year to keep the per capita rate (solid blood red line) at 1 b/py for as long as possible.   Eventually, in 2042, as production rates continue to decline, exports cease altogether and per capita consumption drops below 1 p/py.
Figure 20 reproduces Figure 4 from Part 1 of the present series showing the population (blue circles), census’s bureau predicted population (dashed dark blue line) the calculated per capita consumption rate (red circles), my previous PIE analysis predicted per capita consumption rate (dash blood red line), my previous predicted population based on the previous PIE analysis per capita consumption (light blue dashed line). 
Added to Figure 20 is the population consequence for the mitigation scenario:  the per capita consumption (solid blood red line) is kept at 1 b/py until 2042, at which point, production is insufficient even with net export rates at zero.  Consequently, the population drops steeply down after 2042, as per capita consumption drops, until reaching the pre-petroleum era population of 121 million in 2048.
I would classify this as a successful mitigation strategy for FS because it at least postpones the region’s population crash by about 20 years.  Moreover the region is still able to realize the profits from continuing exports (albeit less than the trend predicted from the PIE analysis) until 2042. 
The reason why the mitigation is successful is clear from Figures 19 and 20: FS’s present per capita consumption rate is ~5 b/py, and, FS has enough buffer production capacity to continue positive net exports and still keep per capita consumption at 1 b/py for 20 years.  Consequently, the slow population decline predicted by the census bureau (dark blue dashed line) could be followed for another 20 years before the population crash.
Export Mitigation scenario for Africa
Figures 21 and 22 for AF are completely analogous to figures 19 and 20 above.
Added to Figure 21 is my mitigation scenario for this region: according to my PIE analysis of this region (Part 4 of the previous series and Part 1 of the present series) AF’s per capita petroleum consumption in 2011 was about 1 b/py and therefore export mitigation would need to start right now to keep per capita consumption at this level.  Moreover because AF’s population is still growing at a fast annual rate of +2.2 %/y, the net export rate would having to be cut by at least at this rate every year just to keep per capita consumption at the same level.  
The consequence of this scenario is that net exports rates decline very steeply and reach zero by 2019. 
Cutting exports sufficiently to keep the per capita consumption rate at 1 b/py would allow AF to continue its present population growth trend for another 10 years, and consequently, added another 220 million people to its already 1 billion population (i.e., 22 million per year for ten years). 
In 2021, when the per capita consumption drops below 1 b/py my population decline scenario starts.
Because AF’s petroleum production rate is predicted to drop steeply, so too does it’s per capita consumption rate and therefore its population.  By 2037, AF’s population has crashed back down to its pre-petroleum era population level of 141 million.
I suppose we could still classify this as a successful mitigation strategy, because it at least postpones the region’s population crash by about a decade.  However, the population crash occurs from an even higher level of 1.2 billion instead of 1 billion.  Moreover, because the net export rate is steeply cut back and ends altogether in 2019, this would have sever economic consequences for the governments in this region which are highly dependent on oil export royalties, as well as the presence of foreign corporations with the expertise to produce the oil.  I wonder how long would those foreign corporations stick around if they could no longer export the oil for profit?  Is there enough domestic expertise to continue the production operations in the absence of foreign corporations?  I’m afraid that the answers to these question do not paint a very positive outlook for the continuing production of oil in AF—but for now, I am making the assumption that this region could maintain production along its predicted trend line even without the economic benefits of net positive oil exports.
The reason why export mitigation is less successful for AF than for FS is apparent from Figure 21 and 22. AF’s present per capita consumption rate is already close to 1 b/py, and, its predicted future production rate suggests a steep drop in the near future.  Consequently, I don’t expect AF to have much excess production capacity to continue net positive exports while keeping per capita consumption at 1 b/py.
Still, staving off a population crash, even for a decade, could be appealing to the governments in power in these regions, and so, I think that this scenario would have a legitimate chance of occurring.  Of course, I think it more likely that what will actually occur is something in between this mitigation scenario (solid lines) and the PIE analysis scenario without mitigation (dashed lines). 
Export Mitigation scenario for the remaining Asia-Pacific region
Once again, Figures 23 and 24 for rAP are completely analogous to figures 19 and 20 above.
Added to Figure 23 is my mitigation scenario for this region: according to my PIE analysis of this region (Part 10 of the previous series and Part 2 of the present series) rAP’s per capita petroleum consumption drops below 1 b/py in 2031, and so at that point, rAP would reduce its exports to keep per capita consumption at 1 b/py for as long as possible.  Unfortunately “as long as possible” for this region is a scant two years.  Why?  Well, from Figure 23, you can see that domestic production rates (blue circles and solid line) are far lower then, roughly 30% of, domestic consumption rates (red circles and dashed red line).  Consequently, rAP is a large net negative exporter, and cutting its relatively small inter-regional exports, that it is expected to have by 2031, only serves to worsen the net negative export balance (solid green line) with only a short  term beneficial effect on sustaining domestic consumption. 
As illustrated in Figure 24 this export mitigation strategy would sustain per capita consumption at 1 b/py for only two additional years.  This would allow this region to continue along the census bureau’s projected positive population growth rate from 2031 to 2032.  The population growth rate at that time is estimated to still be about +0.82 %/y.  With a predicted population in 2030 of about 2.91 billion this translates into adding another 24 million people per year to this region for two more years.  Only then to have the population commence its long spiral downwards to 667 million by the end of my study period in 2065.    
Although I can't discount such a strategy from occurring (e.g., due to local advantages within the region), I don’t see this as being very successful.  The critical level of per capita consumption is only maintain for two years, only to have the population crash from 2.96 billion to 0.67 billion over the next 33 years, a population decline of about 2.3 billion people.   Still, mitgitation is not totally useless in that at the end of my study period in 2065, there is a slightly higher remaining population than in my original PIE analysis scenario (dashed light blue line).  But of course, under either scenario, I expect rAP to eventually end up at its pre-petroleum era 1900 population of 464 million.
Export mitigation is not successful for rAP because unlike AF and FS, is a relatively small interregional exporter and a large net importer of petroleum.  This negative export balance, coupled with the regions huge and still growing population, means that cutting exports adds relatively little to the domestic pool of oil available for consumption. 
It is worth noting that even today, rAP is heavily dependent on the continuance of petroleum imports to keep per capita consumption above 1 b/py.  For instance, if inter-regional exports to rAP were to suddenly end, using 2011 numbers, rAP’s per capita consumption, if totally reliant on domestic production only, would equal about 0.6 b/py.  And rAP's reliance on imports only gets worse with time as domestic production is well past peak (solid blue line in Figure 23) and the population continues to grow. 
Export Mitigation scenario for Japan
At first, talking about export mitigation for JP might seem like an oxymoron, given that this region has very small domestic reserves and production of oil.  Indeed, by far most of JP’s domestic production comes from “refining gains” from the country's domestic petroleum refining sector (see Part 8 of my previous series).  Apparently, crude oil imported into JP is refined domestically, and then, a small portion of the refined petroleum products is re-exported to other regions. 
My export mitigation scenario for this region assumes a continuation of crude oil imports into JP, and that JP stop the re-export of its "refining gains" in an effort to mitigate domestic per capita consumption dropping below 1 b/py. 
Once again, Figures 25 and 26 for JP are completely analogous to figures 19 and 20 above.
Figure 25 illustrates the consequence of export mitigation starting in 2034, the year that JP’s per capita petroleum consumption rate is predicted to reach 1 b/py.  By cutting its exports, JP is able to keep the per capita consumption rate at 1 b/py for 5 years until 2039.  After 2039, with exports at zero, the per capita consumption continues to decline below 1 b/py, and with it the population crashes to a minimum of 71 million in 2058.  Thereafter, the population is predicted to increase again, based on the long term predicted increase in exports from NA to JP. 
Figure 26 illustrates the mitigation in per capita consumption starting in 2034 and a fairly flat per capita consumption rate thereafter.  Note the avoidance of the predicted dip in per capita consumption, with a minimum in 2041, as predicted in my previous PIE analysis.  That dip, centered around 2041, was due to the predicted loss of JP’s oil imports from ME (and to lesser extents from rAP and FS) in the mid to last 2030s, and, before the predicted increase in imports from NA became more substantive, in the late 2040s and 2050s.  It was during that dip that JP’s per capita consumption drops almost to 0.2 b/py and the population was predicted to drop to the pre-petroleum era 1900 population of 44 million (dash light blue line).
According to this export mitigation scenario, cutting exports starting in 2034 helps JP avoid the worst of the dip in per capita consumption, and the corresponding worst part of the population decline.  In particular, keeping per capita consumption at 1 b/py until 2040 avoids all of the steep population decline from 2034 to 2038 predicted by the PIE analysis.
JP’s population still crashes after 2039, at least as compared to the census bureau predicted population (dashed dark blue line).  For instance, instead of the census bureau’s predicted population of 94 million in 2050, this scenario predicts a population is 75 million.  Still, that is a substantial mitigation as compared to crash in population to 44 million predicted by my PIE analysis, without mitigation.   
Export mitigation is more successful for JP than for rAP for a number of reasons.  First, JP’s present per capita consumption at ~13 b/py is much higher than rAP present rate of ~2 b/py.  That means that JP has much more room to fall before hitting the critical level of 1 b/py.  Second, JP’s population is much lower than rAP’s and is in decline, whereas rAP’s population is still growing and predicted to continue growing beyond 2065.  That means that each year, JP needs less and less petroleum to maintain per capita consumption, while rAP needs more and more petroleum.  Third, there is the possibility of JP receiving in the future, small but significant, imports from another source, NA, after it's exports from ME go to zero.  The reason why NA’s small exports to JP are significant is because JP’s population is much lower than rAP’s population.  In other words, exports of 0.07 bby from NA is significant for a population of 0.08 billion (JP predicted population in 2065) people, but not significant for a population of 0.7 billion (rAPs predicted population in 2065).
Any unintended consequences??
In summary, it seems that these mitigation scenarios, as applied to any one of these four regions, would have some beneficial effect of at least delaying the predicted population decline in all four regions, or, reducing the absolute population decline in JP.
Unfortunately, this analysis is still not complete, because we have to consider what impact these scenarios would have if they were applied to all these regions.  In other words, if FS and AF cut their petroleum exports as outline above, what effect would this have on net importers like JP and rAP.  And what about JP and rAP, who both import and export petroleum with each other—who ends up in the better position if rAP cuts its exports to JP and JP cuts its exports to rAP?  Finally, what about the other three large net importers: NA, EU and CN?  What happens to these three regions if FS, AF, rAP and JP were to all cut their exports?
Stay tuned....

Saturday, January 12, 2013

Post Peak Oil Economic and Population Scenarios: Part 3 Developing Asian Regions

This will finish my 9-region survey of economic and population scenarios, based upon my PIE analysis of consumption and import/export trends analysis presented in my previous series. 
Part 1 presented the scenarios for the four net petroleum exporter regions and Part 2 presented the scenarios for the developed regions of North America, Europe and Japan.  In this post I present scenarios for China and the remaining Asia Pacific region.
Economic and Population Trends for the Net Petroleum Importing Developing Asia Regions
China (CH)
Figure 15 shows the population change trend for CH.
 As you can see CH’s population growth trend has had two steep periods of decline and two flat-to-slightly increasing periods.  From the late 1960s to 1980, the growth rate dropped steeply from about +2.9 %/y to + 1.3 %/y.  This was followed by decade of slow growth through the 1980s, back up to +1.8 %/y by 1989.  Then the growth rate declined steeply again for a decade to +0.6 %/y by 2000.  Since then, the growth rate has been flat at about +0.5 %/y.  The US census bureau, however, predicts continued declines, such that population growth stops in 2027, and goes negative thereafter.  My extrapolation of the census bureau’s trend gives a population change of -0.75 by 2065.
The right hand side axis in Figure 16 shows the actual population (blue squares) and predicted population (dark blue line) based on the population growth trend shown in Figure 15.
CH’s population is predicted to top out at about 1.4 billion in 2026—that’s an increase of another 60 million people from the 2011 population of 1.34 billion. 
The left hand side axis in Figure 16 shows the calculated per capita petroleum consumption rate (red circles), and, my predicted per capita consumption rate for CH going forward (solid red curve).
Despite the near doubling in population since 1965 (e.g., from 0.72 to 1.34 billion) CH’s per capita petroleum consumption has grown even faster from paltry 0.15 b/py in the 1960s to 2.7 b/py in 2011.    However, I am predicting that this growth in per capita consumption will rapidly slow down and peak in 2016 at 2.8 b/py.  The predicted trend of continued population growth of +0.5 to 0.4 %/y and peaking petroleum consumption both contribute to this prediction. 

As shown in Part 9 of my previous series, CH's domestic petroleum production is predicted to increase slightly but import of petroleum are predicted to decline after about 2018 mainly because of predicted declines in exports from the former Soviet Union and the Middle East and regions after 2017 and 2022, respectively,  and to lesser extents, declining exports from Africa and the remaining Asia Pacific regions.  Moreover, there is slow trend of increasing petroleum exports from CH to other regions, in particular to the remaining Asia Pacific region and South America. 
Overall then, the trend of increasing domestic product doesn’t make up for the declining import rate and increasing export rate, and therefore domestic petroleum consumption peaks out around 2019.  The continuing growth in population causes CH’s per capita consumption to peak a little early than that in 2016.  Still, the per capita consumption after 2016 is predicted to remain fairly flat for a decade before declining more rapidly, when the Middle East exports to CH start declining more rapidly.
For instance, from the solid red curve in Figure 16, from 2011 to 2020, CH’s per capita petroleum consumption is predicted to change from 2.57 to 2.76 b/py.  Only an 8% increase, or +.88 %/y, but this is still a positive increase, which is more than we can say for NA, EU and JP for this period, which are in the range of -3 to -5 %/y.
From 2020 to 2040, the per capita consumption rate is predicted to decline, from 2.76  to 2.02 b/py—a 27% drop or -1.3%/y.  That is still substantially less of a decline rate than estimated for NA (2.3 %/y), EU (-3.6 %/y) or JP (-4.8 %/y) over this same period.  Of course, these three regions all have had much higher per capita consumption rates that CH presently and so they have higher heights to fall from than CH does. 
I find it interesting that JP and EU are predicted to drop below 2 b/py in 2030 and 2032, respectively, whereas CH is not predicted to do the same until about decade later in 2041.  It is interesting to think of CH having a greater per capita consumption of petroleum than EU and JP after about 2030, and, of what that implies for the relative sizes of the economies of these regions going forwards.  In contrast, NA is still predicted to have a per capita consumption rate of 9 b/y in 2030, and to be still above 4 b/py by the end of my study period in 2065. 
By 2065, CH’s per capita consumption rate is down from 2040 levels to 1.5 b/py—another 25 % drop in 25 years compared to 2040 or -1 %/y.    Still, 1.5 b/py is well above my predicted threshold rate, of 1 b/py, for starvation and population decline, and therefore I do not expect CH to have any dramatic population declines within my study period.
Remaining Asia-Pacific (rAP)
Figure 17 shows the population change trend for rAP.
Like CH, rAP’s population growth trend is in decline, but at a slower and more uniform rate than CH’s. 

For instance, in the late 1960, rAP’s population growth rate was +2.3 %/y and in 2011 it is still +1.3 %/y, that is, more than double CH’s present population growth rate of +0.5 %/y. 
The census bureau data predicts that rAP’s long, slow, decline trend will continue, and if it did, then a little past my study period, in about 2070, the growth rate would finally hit zero. 
The right hand side axis in Figure 18 shows the actual population (blue squares) and predicted population (dark blue line) based on the population growth trend shown in Figure 17.
The solid line blue line illustrates rAP’s still growing population in 2065, predicted to be about 3.4 billion people.  After peaking in 2070, the population would decline thereafter.  According to this projection then, by 2065, the rAP region would add another 1 billion people on top of its present 2.4 billion population. 
The left hand side axis in Figure 12 shows the calculated per capita petroleum consumption rate (red circles), and, my predicted per capita consumption rate for rAP going forward (solid red curve).
Despite rAP’s population more than doubling since 1965, like CH, its per capita petroleum consumption rate has increased even faster, from 0.5 to 2.2 b/py by 2011.  The per capita consumption for the last few years has over-shot my prediction of a downturn after 2007.  I suspect that rAP’s import rate trend has recently accelerated compared to my 10 year linear regression analysis of this trend, but that is a story for a different day.  
My reasons for predicting a downturn in per capita consumption are similar to that given for CH, but, even more so: as shown in Part 10 of my previous series, rAP’s domestic production rate appears to have peaked several years ago and is in decline; petroleum import rates from other regions to rAP are predicted to decline after 2013, mainly due to falling imports from ME, and rAP’s export rate is not predicted to peak and decline until after 2013.  These factors, plus rAP’s ongoing population growth rate of +1.3 %/y, all point to the imminent peak and decline in the per capita petroleum consumption rate.  Maybe this decline can be forestalled by increasing imports and/or cutting exports, but for now, let’s just go with implication from the longer term trends determined from my previous study.   
From the red prediction curve in Figure 18, rAPs per capita consumption is projected to decline from 2.02 b/py in 2011 to 1.62 b/py in 2020—a 20% drop or -2.2 %/y.  That is not as good as CH’s positive growth of +0.9 %/y, but still better than NA, EU and JP’s negative declines of -3 to -5 %/y, over this period. 
But, from 2020 to 2040, rAP’s per capita consumption is predicted to further decline from 1.62  to 0.54 b/py; a 67% decrease, or -3.3 % y/p.  As an annual percent decline, that is just slightly better than predicted for EU (-3.3 %/y) over this same period.  And, from 2040 to 2065 consumption drops to 0.17 b/py—another 68% drop, or, -2.7 %/y. 
By now, if you have been following this series, you will know that I believe that, at these low per capita consumption rates, rAP will have more to worry about than economic decline.  From the red curve in Figure 18, in 2031, rAP drops below my 1 b/py threshold for starvation and population decline.  Notice that this is just a few years earlier than 2034, the year when JP is predicted to drop below 1 b/py and encounter its own issues of starvation and population decline, as discussed in Part 2 of this series.
Consequently, I predict that rAP’s population will rapidly decline from 2031 and on, so as to keep its per capita consumption at 1 b/py.  Within my study period, rAP never reaches its estimated pre-petroleum 1900 population level of 463 million, but, at 570 million in 2065, it comes close.  Given that rAP's population is estimated to equal 2.9 billion in 2030, this would correspond to a population decline of 2.4 billion people over the 35 year period from 2030 to 2065. 
Once again I wonder, how tempting would oil in the East China Sea, if present in large quantities, look to the nearby neighbors in rAP around 2031, to avoid such population declines?
Final thoughts
Of course, if the disaster presented above for rAP occurs, it would, by far, be the greatest magnitude of human loss and suffering in the history of mankind. 
This would eclipse the starvation and population decline of 1 billion I predicted for AF and FS by 2026, or the 67 million population decline in JP predicted to start a few years later in about 2033. 
All told then, we are looking at population declines for the four regions of rAP, AF, FS and JP totaling about 3.4 billion people by the end of my study period in 2065.
Certainly at least these fours regions will have very strong motive to take action to mitigate, or at least delay, these catastrophic population declines and human suffering.  Next time, I will consider some likely mitigation options and their repercussions on the other five regions. 

Sunday, January 6, 2013

Post Peak Oil Economic and Population Scenarios: Part 2 the Developed Region Importers

This continues my survey of economic and population scenarios, based upon my PIE analysis of consumption and import/export trends analysis presented in my previous series. 
Part 1 presented the scenarios for the four net petroleum exporter regions; this time, I cover the first three of five net petroleum importer regions; the developed regions of North America, Europe and Japan.
Economic and Population Trends for the Net Petroleum the Importing Regions
North America (NA)
Figure 9 shows the population change trend for NA.

NA’s population growth trend has been on a long slow decline: it was about +1.5 %/y in 1965, is about +1%/y today, and is projected to be about +0.5 %/y in 2065.  That means that population growth is expected to stay positive well into the next century.  That, in turn, means that to just stay at the same level of per capita petroleum consumption, the petroleum consumption rate would have to increase by about +1 to +0.5 percent per year for at least the next +50 years or so.  Of course, that is not what has been happening and it is not what I expect to happen in the future.
The right hand side axis in Figure 10 shows the actual population (blue circles) and predicted population (dark blue line) based on the population growth trend shown in Figure 9.
The solid blue line illustrates the continued population increase from present levels in NA from 461 million in 2011, to 684 million, at the end of my study period in 2065.  Population is not projected to peak until the next century when the growth rate finally hits zero (roughly mid-century, 2150, with a population of 850 million). 
The left hand side axis in Figure 10 shows the calculated per capita petroleum consumption rate (red circles), and, my predicted per capita consumption rate for NA going forward (solid red curve).
NA’s per capita consumption peaked in 1978, at 25 b/py, before a sharp drop thereafter.  From 1983 to 2007 per capita consumption was in a bumpy plateau of about 20 to 21 b/py, before breaking downwards in 2008 to 18 b/py by 2011.  My downwards projection going forwards is based on my predictions that domestic petroleum production will remain flat-to-declining, imports will stay on its downward trend and exports will stay on its upwards trend.  These production, import and export trends all point to lower domestic petroleum consumption rates for NA.  The prediction that the population will continue growing, only serves to steepen the predicted decline rate in per capita consumption.  In fact, I think that the decline rate in per capita consumption predicted in Figure 9 may be an optimistic one, because it assumes a continuation of the export rate trends from two major sources: AF and FS.
As I discussed in Part 6 of my previous series, NA’s declining imports from ME, SA and EU have been partly made up for by increasing imports from AF and FS.  However, as we saw in Part 1 of the present series, both AF and FS will be in serious trouble if they continue their present export trend, and, probably sometime soon, these regions will have to cut back their exports just to provide enough petroleum to sustain their own populations.  This of course, doesn’t bode well for NA with its increasing dependence on imports from AF and FS.  If AF and or FS cut their exports, then the solid red prediction curve in Figure 9 would have a steeper decline.  But for now, let’s just go with this prediction curve as is. 
From 2005 to 2011, NA’s per capita consumption rate dropped from 21 to 18.3 b/py: a 13 % drop in 6 years, or -2.2 %/y.  The prediction curve projects for a steeper drop in per capita consumption from 17.7 to 12.7 b/py from 2011 to 2020—a 28% drop in 9 years or -3.1 %/y.  From 2020 to 2040, the  per capita consumption rate is predicted to continue declining, from 12.7 to 6.9 b/py.  That’s another 46 % drop over 20 years, or, -2.3 %/p.  By 2065, the per capita consumption rate is down to 4.2 b/py—another 40 % drop in 25 years or -1.6 %/y.    
In summary, NA’s per capita consumption rate is predicted to drop from its recent local high of 21 b/py in 2005 to 4.2 b/py in 2065—an 80% drop over 60 years.  That’s an overall annual decline rate of -1.3 % /y for 60 years—but, as I illustrated above, there are some periods, such as from 2011 to 2020, that are much steeper than this.  The prospects for real economic growth from NA therefore look very dim.  Rather, a long, sustained forty year downwards economic spiral (h/t to Bill Hick’s former blog) is what I am expecting to be in store for North America. 
Beyond 2030, the predicted per capita consumption rate decline curve is pretty well governed by NA’s domestic production rate, net export rate and the predicted continued population growth.  As I discussed in Part 6 of my previous series, based on the current export and import trends, I projected NA to become a net exporter of petroleum in about 2029.  I suppose that NA could cut its exports in an effort to mitigate the predicted decline of per capita consumption.  On the other hand, some of the regions that NA will export to, like EU and JP, will really need those imports to avoid starvation and population decline, as import rates from the traditional suppliers like, ME. FS and AF, go into terminal decline. 
An 80% decline is a very large relative decline, comparable to the relative decline in per capita consumption that the ME was predicted to have, and, much steeper than the relatively mild decline that was predicted for SA, in Part 1. 
Still, in absolute terms, even at 4.2 b/py in 2065, NA would be much better off than what ME (1.9 b/py) or SA (2.5 b/py) are projected to be at in 2065.   Indeed, 4.2 b/py is only slightly below where SA and FS are at today (4.7 and 5.3 b/py, respectively in 2011).  And, a 4.2 b/py per capita consumption rate is nowhere close to my predicted threshold rate, of 1 b/py, for starvation and population decline, which is more than I can say for the other two developed regions.    
Europe (EU)
Figure 11 shows the population change trend for EU.
Like NA, EU’ population growth trend has been on a long slow decline: it was about +0.8 %/y in 1965, is about +0.1%/y today, and is projected to be about -0.6 %/y in 2065.  Population growth is projected to hit zero in about 2022 and to decline thereafter.   A declining population after 2022 would help mitigate a declining per capita petroleum consumption rate, but, I don’t think that this population decline rate will be large enough in magnitude to have much effect on what is to come.
The right hand side axis in Figure 12 shows the actual population (blue circles) and predicted population (dark blue line) based on the population growth trend shown in Figure 11.
The solid line blue line illustrates EU’s population topping in 2022, at about 603 million, and slowing declining thereafter.
The left hand side axis in Figure 12 shows the calculated per capita petroleum consumption rate (red circles), and, my predicted per capita consumption rate for EU going forward (solid red curve).
Again, similar to NA, EU’s per capita petroleum consumption rate peaked in 1979 at 11 b/py before a sharp drop and since 1984 slowly climbed back to a recent high of 0.1 b/py in 2006 before breaking downwards to 9 b/py in 2011.    My prediction of continuation of this downwards trend is based on EU longstanding steeply declining domestic production rate trend, the shift of declining imports from ME and soon AF toward Asia, and the expected decline in imports from its main supplier FS (see Part 7 of my previous series).  And, of course, the growing population, at least until 2022, doesn’t help EU’s per capita consumption rate.  EU’s predicted declining exports, mainly to NA, helps somewhat, but overall the trend is for a sharply declining per capita consumption rate.
How sharp a decline?  Well, the 10% decline from 10 to 9 b/py, from 2006 to 2011, corresponds to -2 %/y.  From 2011 to 2020, the predicted per capita consumption rate (solid red line) to go from 8.8 to 4.8 b/py—45% decline in 9 years or -5 %/y.  Ouch!  From 2020 to 2040, as exports from ME, AF and FS all disappear, the per capita consumption rate is predicted to further decline from 4.8 to 1.3 b/py—another 73% decline in 20 years, or -3.6 %/y.  Dang, that hurts!  The relative decline in the per capita consumption from 1.3 to 1.1 b/py from 2040 to 2065 is not as dramatic, at -0.6 %/y.   
Of course, based on these projections you can imagine that I think EU’s prospects for real economic growth are even dimmer than for NA.
The relative decline from 10 to 1.1 b/py, from 2006 to 2065, is an 89% drop, which is even worse than the 80% relative decline for NA.  But, EU’s per capita consumption rate is a little more than half  that of NA’s in 2006, and consequently, that 89% drop puts EU’s absolute per capita consumption rate just slightly above my predicted threshold rate, of 1  b/py, for starvation and population decline.  In fact, past 2040, what keeps EU slightly above that threshold rate is the predicted increasing imports from NA, and to a lesser extent, from SA, plus EU’s accelerating declining population change trend.
Dropping from a per capita consumption rate of 11-10 b/py to 1.3-1.1 b/py I think, would put the EU’s economy at high risk of transitioning from a developed region economy to a third world economy, at least by today’s standards, and, right on the threshold of starvation and a sharp population decline. 
The predicted per capita consumption rate of 1.3 b/py is about the same as AF’s per capita consumption rate today.  The projected per capita consumption rate of 1.1 b/py from 2050 to 2065 would put EU well below that predicted for the ME or SA in 2065.
However, EU would still be better of than AF and FS, which are predicted to drop below the 1 b/py threshold for starvation and population decline.  But, if these regions cut their exports for domestic use, to mitigate starvation and population decline, then EU will be negatively effected even sooner than the projected in Figure 12.  In other words the solid red line in Figure 12 would decline even more steeply than presented.  I will return to these considerations after I finish my nine-region survey.
Japan (JP)
Figure 13 shows the population change trend for JP.

Like NA and EU, JP’s population growth trend has been in decline for a long time: the peak growth rate since 1965 was +1.4 %/y in 1974.  Since then, the growth rate dropped to zero in about 2005, and has trended increasingly negative since then.  In 2011, the population change rate was -0.26 %/yr and thus is projected to be about -1.2 %/y in 2065.  The declining population trend would help mitigate a declining per capita petroleum consumption rate, but, this is still not large enough in magnitude to prevent a substantial decline from happening.
The right hand side axis in Figure 14 shows the actual population (blue circles) and predicted population (dark blue line) based on the population growth trend shown in Figure 13.
The solid line blue line illustrates that JP’s population peaked at about 128 million in 2005, and has been declining thereafter.
The left hand side axis in Figure 14 shows the calculated per capita petroleum consumption rate (red circles), and, my predicted per capita consumption rate for JP going forward (solid red curve).
Similar NA and EU, JP’s all time per capita petroleum consumption rate peak was in the 1970s, specifically, 1973, at 17.7 b/py.  More recently, in 1996, it reached another lesser peak of 16.8 b/py, but, the per capita petroleum consumption rate has been declining since then.  As I showed in Part 8 of my previous series, JP has almost no domestic petroleum production of its own, other than “refining gains” from the country's domestic petroleum refining sector.   As such, JP is heavily dependent from imports from other region, mainly the ME, and to far lesser extents the remaining Asia Pacific region (rAP) and FS. But exports from ME and rAP to JP are in steep decline and given the present trends, projected to hit 0 before 2040 and 2027, respectively. 
The declining imports from ME and rAP over the past several years accounts for most of the recent decline in JP’s per capita petroleum consumption rate.  The decline from the peak of 16.8 b/py in 1996 to rates of 12.7 b/py in 2011, corresponds to a 24.4% decline over 15 years, or -1.6 %/yr.  More recently, the decline from 2005 levels of 15.2 b/py, to the 2011 levels corresponds to -2.7 %/y.  My predicted per capita petroleum consumption rate decline (solid red line in Figure 14) from 11.8 to 6.7 b/py from 2011 to 2020 in a 43% drop over 9 years, or, -4.8 %/y, which is almost as steep as the decline predicted for EU over this same period. Once again, Ouch! 
At least EU still has some domestic production from 2020 to 2040.  But, JP has no domestic production to speak of.  Consequently, from 2020 to 2040, the predicted per capita petroleum consumption rate decline in JP from 6.7 to 0.21 b/p corresponds to a 97 % drop over 20 years, or -4.8 %/y.  This is even worse than -3.6 %/y predicted for EU over this same period.
Notice that JP’s per capita petroleum consumption hits a minimum of 0.207 b/py in 2041 and then starts to slowly increase again thereafter.  The five times increase from 2041 to about 1  b/py in 2065 reflects predicted increasing exports to JP from NA.      
Of course, predicted per capita petroleum consumption rate declines of -4.8 %/y for the next 30 year should tell you what I think of the prospects for economic growth in JP—even dimmer than the dim prospects for EU. 
I think that JP will be facing greater troubles than a declining economy, however.  By 2034, JP’s per capita consumption drops below 1 b/py, my threshold for starvation and population decline.  Consequently, I predict that JP’s population would rapidly decline from its predicted number of 111 million in 2033 to its pre-petroleum era level of 43.8 million (JP’s estimated population in 1900 see Part 1) by 2037.    I wonder, how attractive will that oil in the East China Sea look to JP around 2033, to avoid a potential 67 million population decline over four years?
Well, assuming that war with China doesn’t break out in 2034, by about 2048, as exports from NA increase, I predict the population, as supported by keeping the per capita consumption rate at 1 b/py, could come back to at least to the census bureau’s projected level of about 80 million by 2064. 


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This post appears without any images, courtesy of the folks at Google, who either deliberately, or, through stupidity, have altered blogger in a manner disables a user’s ability to upload images (http://productforums.google.com/forum/#!topic/blogger/4YJorLUSxw0).  If when Google figures out what they are doing, or, makes an announcement of a policy change, then I will update the post accordingly.  This is probably part of Google’s ongoing campaign to get people to switch from IE to their Chrome browser.  
Next time, maybe, I will be back to finish my nine region survey of the Asian Region Importers, China and the remaining Asia-Pacific region. 

Jan 7, 2013:  figures added; not due to any fix on Google's part, but me jumping through the extra hoops of creating a "Picasa Web Album" at Google and then cross-load the images to this post.