Higher Oil Prices Do Not Lower Greenhouse Emissions, Recent Analyses Show
Copyright 2000, WeatherVane
September 11, 2000
By J.W. Anderson
High prices have temporarily slowed, but not stopped, the rise in the world's oil consumption and the greenhouse gas emissions that it generates.
World demand for oil rose about 1.9 per cent a year through the middle 1990s, according to the International Energy Agency (IEA). In its latest forecast, dated Aug. 9, the IEA estimated that demand would rise only about 1.5 per cent this year from last. Next year, it suggested, demand would rebound, rising about 2.5 per cent.
Half of that increase would come from the industrial countries, the agency anticipated. The other half would come from developing countries, chiefly those in Asia.
Among the greenhouse gases created by human activity, carbon dioxide is the most important – and burning oil is the world's largest single source of that carbon dioxide. While some other fuels, such as coal, are more carbon-intensive, the huge volume of oil consumption results in greater total carbon emissions.
The IEA's figures on the oil market are consistent with those published a day earlier by the U. S. Department of Energy's statistical arm, the Energy Information Administration (EIA), in its Short-Term Energy Outlook for August.
It assumed "growth in world oil demand in 2000 of about 1 million barrels per day (about 1.3 per cent), to average almost 76 millions barrels per day for the year.... Other than in 1998, when Asian economies were suffering from a financial crisis, this is the lowest growth rate since 1993. World oil demand growth in 2001 is expected to be about 2 million barrels per day, similar to growth that was seen in the 1995-1997 period."
The world price of crude oil tripled from its low point, at the end of 1998, to last June, when it reached nearly $30 a barrel. Over the next two months it dropped about $2.50 a barrel.
Here in the United States analysts are watching the effect of higher prices on consumer sales of oil products, especially gasoline. Eighteen months ago the average price of a gallon of regular grade gasoline, nationwide, was 96 cents. In the third week of June the price reached a peak of $1.68 a gallon, and by mid-August fell back to $1.45.
During the past spring, when the rise was most rapid, gasoline sales dropped below the previous year's record. But by mid-summer consumption seemed, according to the EIA's projections, to be back at the 1999 levels and likely to resume its previous pattern of growth early next year. That outlook is based in part on the expectation that gasoline prices will continue to decline to the end of the year.
Nearly one third of U.S. emissions of carbon dioxide come from burning oil for transportation. While consumption of gasoline has leveled off in response to high prices, use of diesel and jet fuel has continued to rise rapidly, driven by the requirements of an expanding economy.
The Kyoto Protocol, an international treaty that the United States has signed but not ratified, would require this country by 2008-2012 to reduce its greenhouse gas emissions to 7 per cent below the 1990 level. But U.S. emissions were 12 per cent above the 1990 level in 1999.
That 12 per cent increase represents at least a partial victory for efficiency, since in the same period the American economy expanded 33 per cent. The economy is getting steadily more production for each unit of energy and of greenhouse gas. But the speed of the economic expansion in this country is overwhelming the progress toward more efficient use of energy, as well as the efforts to produce energy without emitting greenhouse gases.