Yup, you guessed it. It’s that time of year again. BP just released their latest updates for the production and consumption of energy throughout the world. Before I get into the details of the analysis, I want to point out that there is one major change in my analysis compared with previous analyses that I’ve posted on this site. (These links go to the previous posts in 2011, in 2012, and in 2013 on the Wealth of Nations.) The one change that I’ve done is that I’ve included a new form of useful work: coal consumption for non-power plant applications. In the developing world, ~90% of all coal is consumed in power plants. However, in places like China, the consumption of coal in power plants is only ~60% of total coal consumption. Therefore, in this update to the “Wealth of Nations” calculations, I’ve included a new term that takes 10% of the coal consumed for developed countries and 35% of the coal consumed for developing countries. This number is then multiplied by 10% to reflect the fact that the enthalpy content in the coal is typically only being converting into low-grade energy, whose exergy is only 10% of its enthalpy content. This is similar to the existing term I have for non-power-plant consumption of natural gas (i.e. NG for home-heating.) The main result of this additional term is that the useful work generation has increased in China by 14%, in India by 10% and in Russia by 3% compared with the useful work generation if this term were not included. If this term is included, then China’s useful work generation has been greater than the US’s useful work generation since 2011. In other words, China actually has had the world’s largest economy since ~2011.
Here are some other conclusions before I get into a detailed breakdown of the analysis for this year.
(1) The US economy (as measured in [TW-hrs] of useful electrical and mechanical work produced) increased by 1.8% in 2013 compared with 2012. This is much better than the -1.5% decrease in useful work output between 2012 and 2011.
(2) There were two countries with negative growth rates between 2012 and 2013: Japan (-2.0%) and the UK (-1.5%.) And there were two countries with near-zero growth rates: Germany (0.3%) and Russia (0.2%.) The major countries with the highest growth rates were: China (1.8%), India (4.4%), and Brazil (3.7%.)
(3) The purchasing power parity GDP (i.e. PPP GDP) is a pretty good reflection of the wealth of country, i.e. the capability to do mechanical and electrical work, when comparing developed economies (such as Germany, Japan, USA and UK.) However, the calculation of the GDP appears to be biased against a few countries, especially Canada and Russia, but also China and Brazil. I can understand why the IMF would be biased against Russia (i.e. black markets and collective farming likely aren’t being accurately reflected in the GDP calculation), but I still have no clue why the IMF and other world organizations consistently underestimate the size of Canada's economy. If I were a Canadian representative for the IMF, I would voice my concern that the IMF is underestimating the size of the Canadian economy by at least two fold.
So, now I'm going to present a more detailed breakdown of the analysis and present the data in graphical form.