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Page added on May 30, 2013

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World car production grows 3 times faster than global oil supplies

World car production grows 3 times faster than global oil supplies thumbnail

As Ford Australia announced the closure of its factory in 2016, the Sydney Morning Herald ‘s headline was:

24/5/2013 Era of the Aussie car over
http://www.smh.com.au/business/era-of-the-aussie-car-over-20130523-2k48f.html

Right. There is an overproduction of cars worldwide. Let’s have a look at the numbers.
In the last 10 years the world’s annual car production went up from 41 million to 63 million cars in 2012, or 52%. Almost 2/3 of this growth came from China. However, in the same period, global liquid supplies went up only 16%, an obvious mismatch.
Data are from here http://oica.net/category/production-statistics/ and http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?
In the above graph, car production (LHS, in million cars pa) is stacked as follows: EU countries, North America (US, Canada, Mexico), Others, Iran, Asia and BRIC countries (above the dotted line).  Global oil supplies (RHS, in million barrels per day) include crude oil, lease condensate, natural gas plant liquids, refinery processing gains and other liquids.  The scale of oil supplies is chosen in such a way that on the graph it coincides with car production in 1999.
We see that in 2005 global car production starts to grow much faster than liquids supplies. Incidentally, this is the beginning of peak oil. The global financial crisis – triggered by the convergence of high oil prices and accumulated debt – interrupted the growth, but not in BRIC countries (except in Russia).
Growing car production in BRIC countries
So how can that gap between car production and oil production be explained?
Let’s compare car production with petroleum consumption:
We see that non-BRIC car production in 2012 was more or less in line with petroleum consumption trends (+6% over 10 years, less than half of global oil production growth) except during the GFC.  Quantitative easing brought the system back to life but nevertheless car production peaked in 2007 at 41.8 million cars, with 2012 production 2.3 million lower.
 The situation is totally different in BRIC countries
Using the same ratio of petroleum consumption to car production as in the non-BRIC graph above we see that cars before 2005 were under-produced and after that over-produced. The trend line of car production and petroleum consumption have completely different directions, meaning that BRIC cars are driven less.  If that should change, there would be an unbridgeable gap in oil production of more than 25 mb/d.
Back to the small world of Australian car production:
It peaked in 2004 and profitability dramatically changed in 2005. Does that year ring a bell?
http://www.innovation.gov.au/Industry/Automotive/Statistics/Documents/KeyAutomotiveStatistics.pdf
Summary:  The footprint of 2005 as a pivotal year of change is everywhere. Western countries are lucky BRIC’s cars don’t gas guzzle around like their own. But the conflict is pre-programmed. The more cars, the worse it will get. Those politicians wishing an Asian Century with 100s of millions of new prosperous consumers should check what they wish for.
Outlook: We had Aussie road tunnels in receivership, Aussie refineries closing and now another Aussie car factory closing. All part of peak oil. Who’s next and when? Airlines? Toll-way operators sitting on huge debts? Remember we are in a phase where oil production growth since 1999 was not enough to provide for normal economic growth. Just picture what will happen when oil decline starts in serious.
What to do: Re-tool car industry to manufacture non-automotive products. CNG buses, rail cars and components for the renewable energy should be on the top of the list
What not to do: Build more road tunnels, motorways, highways and new airports.
Crude Oil Peak


11 Comments on "World car production grows 3 times faster than global oil supplies"

  1. rollin on Thu, 30th May 2013 6:52 pm 

    Apparently the major problem is liquid fuel availability.

    If they would just start producing hydraulic hybrids with small engines, then the fuel availability would double or triple.

    Also this blog item does not take into account the number of cars being junked each year. It’s the net increase in the number of cars that counts as well as the rate of fuel use of the cars.

  2. Arthur on Thu, 30th May 2013 8:10 pm 

    http://cleantechnica.com/2013/05/30/261-mpg-vw-xl1-likely-to-just-be-available-for-lease/

    261 mpg car is going in limited production.

    It is possible.

  3. c8 on Thu, 30th May 2013 8:23 pm 

    Cars can go up more than oil if they use less fuel than previous cars getting junked and/or little used (weekend SUV).

  4. J-Gav on Thu, 30th May 2013 9:54 pm 

    You have a point, Rollin, but it will take a decade or two for any significant portion of the world’s present car fleet to be ‘converted.’ And of course even then, the growing number of drivers will (i.e. ‘might’ if collapse doesn’t intervene in the meantime), overwhelm those gains. As for the other comments, I understand the resistance to the fact that the era of “Happy motoring,” (as Jim Kunstler calls it) is coming to an end. We’re at most one generation away from that monumental transition with little to show as yet in the way of adaptive behavior – a few more miles per gallon? electric cars? Rational public transportation build-out? … and my ass chews tobacco …

  5. Newfie on Thu, 30th May 2013 10:18 pm 

    “If they would just start producing hydraulic hybrids with small engines, then”…

    people will buy more cars and drive more miles, because it’s cheaper, and fuel consumption overall will go up.

    Jevons paradox: technological progress that increases the efficiency with which a resource is used tends to increase (rather than decrease) the rate of consumption of that resource.

  6. BillT on Fri, 31st May 2013 4:41 am 

    Many people are driving the last car they will ever own. There are a lot of reasons I say that but I am not going into them here. You should already know them if you follow world events. I would predict that personal cars will be gone by 2030 or sooner. Sorry guys!

  7. Arthur on Fri, 31st May 2013 10:24 am 

    I think Bill is right. People will gradually switch to alternative means of transport, like scooters (as in Asia), electro-bikes and of course public transport in densely populated areas like in western Europe. I am not very apocaliptic about the future but I do think that the car is going to be the first ‘victim’ of the coming energy crunch and gradually will be phased out. Expect emergency monday morning meetings in most companies in the West and elsewhere, not too far in the future, where the boss will make an inventory of all the cars and homes of the employees in order to setup an government ordered non-voluntary car pooling scheme. This could happen after a major crisis in the Gulf and subsequent disruption and rationing of oil flow.

    But meanwhile cars are still sold in record numbers, after an absolute minimum in 2009:
    http://static.autoblog.nl/images/wp2010/Autoverkopen%20Nederland%20vs%20Belgie.jpg

    To my utter surprise the new car sales in the Netherlands recovered dramatically since and are back at pre-Lehman-crash levels:

    2009 – 389.131
    2010 – 484.432
    2011 – 560.045
    2012 – 501.898

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