The Chinese Car Bomb
By Andrew McKillop

Exploding Numbers

Exploding numbers of oil- and gas-fuelled road vehicles, including cars, buses, trucks, motorcycles, scooters, mopeds, all terrain ‘fun’ vehicles, and agricultural and construction off-road vehicles [1] draw much less attention than human population numbers as a ‘possible threat to continued wellbeing’. This also applies to public and private aviation, where typical growth rates are even more unsustainable — plane movements and numbers of new planes coming into service in the period 2005-2010 are at, or forecast at around 8% or 9% per year for civil aviation, and up to 25%-33% per year for business jets. Forecasts for this last and booming sector with the absolute maximum Carbon Footprint are very bullish!

Studied ignorance of exploding land transport fleets and their very direct impact on world oil demand is curious given the phenomenal growth rates we find almost anyplace in the so-called Emerging Economies. On a world scale this can be shown by a few simple figures: In 1939 the world’s roughly 2.3 billion inhabitants shared a total of around 47 million motor vehicles. Today’s 6.5 billion human beings have around 875 million land transport vehicles to fuel, repair, park and run, almost exclusively (about 98%) using petroleum and natural gas at this time — though of course running on cheap hydrogen and abundant corn ethanol, or other miracle fuels “by 2035 or 2045”.

Human numbers increased less than three-fold or 200% in the last 68 years, but the world’s car population grew by well over 1750%.

Today’s human population is growing at ever lower rates, for a variety of rational, and less easy-to-explain reasons, and the composite or world average demographic growth rate is now hovering at not much above 1.1% per year — compared to 3.5% per year at its peak in the 1960s and 1970s. This was enough, as we know, to almost exactly double the world’s population from 1965 (3.25 billion) to 2007 (6.5 billion), but the next doubling either will not happen at all, or take 65 years or more. Today’s annual increment or potential recruits to the oil consumer global society is now running at perhaps 70 million per year.

World new car output at around 63-65 million per year in 2006 and 2007 is therefore closing up very fast to the cornucopian ideal of “For Every Baby A New Car Is Born”. When we add in world production of motorcycles and scooters, about 25 million per year and already about 70% produced in China [2] and India, the ultimate cornucopian dream ofat least one road vehicle per human being looks distinctly attainable — given unlimited oil supplies of course. Each car, to be sure, weighs a lot more than each baby, most of them born in poor or very poor countries. Each car also needs plenty of oil, gas, electricity and energy-intensive materials to produce — unlike human babies. Above all each car needs to fill up the second it hits the road. If the road doesn’t exist — like in China or specially in India — then it has to be built using plenty of oil.

Upper Limits

Ross McCluney [3] explains the ultimate Heat Limit on world human population numbers, a true and final limit on human numbers which we will surely and certainly never approach, but there are set and final, near-term limits on the possible growth of world transport fleets. The most real, and most denied of these near-term limits is very simply the world’s ultimate reserve of petroleum, unless we wish to fantasise along with former US Energy Secretary Spencer Abraham by giving any credence at all to his November 2002 statement that the world "will have a total of 3.5 billion motor vehicles by 2050". If this fantasy fleet were to come about — adding about 2.6 billion more vehicles to the world’s current stock — the fuel requirements for 3.5 billion motor vehicles, at current average consumption rates would increase world oil consumption by about 70%. Fuelling up this fantasy fleet would take about 55 million barrels per day on top of current total oil demand. Because it is simply impossible to fuel this Fantasy Fleet on oil and gas, Abraham went on to add — and all similar reality-denial experts add — the world’s Fantasy Fleet of the Future will “of course run to a large extent on hydrogen” — the ‘large extent’ was carefully not defined by Mr Abraham, and is even more carefully not defined by the tutti quanti who spin like-minded fantasies. We can note that in 2002 Abraham was unable to invoke the miraculous new fuel — corn ethanol — which the USA of G. W. Bush imagined, for a short while, was the closest possible thing to instant salvation!

The Asian Pathfinder — Japan

To set the ultimate limit for growth of petroleum and gas-fuelled vehicles we can start with the near-ultimate example of a ‘catch-up’ country in the car business — Japan. Even as late as 1949 Japan’s transport fleet still counted some 146,500 horse- and ox-drawn carts, compared with less than 200,000 trucks and about 100,000 private automobiles. But through a self-reinforcing, very high gain feedback process of growth, with annual growth rates typically of 15%-20%, year-in and year-out, Japan’s private car fleet explosively grew from these small beginnings to its first million in 1963, to 5.2 million in 1968 and about 26 million in 1982, and over 45 million today. Also today, Chinese and Indian car fleets are growing at very similar rates, around 15%-25% per year but in vastly bigger countries. In Japan annual growth rates, due to simple saturation effects, considerably slowed by the 1970s and 1980s, but fleet size effects still permitted this slowed growth to give impressive annual increases in numbers of new cars hitting the road.

Growth is good, all good consumers believe, and to get on the growth track Japan’s administrative élite, even after the culture shock of atomic weapons use against their civilian populations, and military rule by US governor MacArthur, had to throw off mindsets dating from the 1918-39 interwar period, when road vehicles were seen as simple ‘feeders’ for shorthaul transport to rail, canal, river and coastal shipping points or transport nodes. Japan’s domestic policymakers, at the start of the post-war period under US occupation, thus preferred to spend money on repairing and improving the rail, shipping and public transport sectors. In addition their policy view downgrading road vehicles was reinforced by Japan’s terrain, its dense urban centres, and by Japanese feelings of doubt on the safety of cars: “Because of slow improvement of the country’s narrow, often mountainous roads, the government tended to discriminate against motor transport on grounds of road safety. City streets were often dangerous too. There was strict traffic control, rigorous tests for driving licences and careful inspection of all new vehicles, both home manufactured and imported. A high standard of maintenance was promoted and the manufacture of reliable, safe cars was encouraged”. [4]

The date at which Japanese transport policy switched to outright pro-car can be set as the period of about 1955-60, the period in which animal-powered transport completely disappeared in the agriculture sector, together with the catch-up economic growth that Japan experienced from around 1955. Despite this, however, as late as the early 1960s, Japan’s Economic Planning Agency continued to purposely underestimate forward growth of road needs for the exploding vehicle population. [5] Today, as the ongoing ‘restructuring’ of Japan’s national railway corporation proves — that is, the effective bailout of an underfinanced, neglected public rail transport system, as in its ‘US role model’ — rail transport is a dwarf compared to the road vehicle sector. As elsewhere in the “liberalized economies” of the ageing OECD group of countries, Japan’s national passenger transport depends almost entirely on the existence of oil-fuelled private road vehicles running on compressed natural gas and above all on oil — from motor fuel to oil-based asphalt and bitumin.

The Second Coming

While the USA and perhaps surprisingly New Zealand were the fastest growing countries for motorization in the entire period of 1905-1940, achieving ownership rates for private cars of nearly 300 vehicles per 1000 inhabitants in 35 years despite starting from a near-zero base[6], their growth rates peaked out well before World War 2. These countries, with all the older urban-industrial countries, however experienced a “second coming” from the early to mid-1950s. Countries such as Canada, Australia, Italy, UK, France and Germany, experienced a new car ownership growth bulge in the 1950-70 period. Typical growth rates were around 500% in 20 years, for example the UK with a 6-fold growth in car and private vehicle numbers through 1950-70. [7] At the time of the first Oil Shock of 1973-74 it was only Japan that experienced a strong but short downturn in this ‘motorization’ trend. From no later than 1975-80 the tried-and-tested ‘economic growth model’ of car-based and car-oriented growth, a key concept in economic mythology from the times of Henry Ford in the USA of the 1920s, was transferred and applied with full force in several non-traditional car-owning democracies and dictatorships of the time, including South Korea, Brazil, Malaysia, Turkey, Iran and the Soviet Asian Republics.

Somewhat later (from the later 1980s) but with truly unlimited upside potential, this economic growth strategy was adopted by China and India. Since 2005, and intensifying very fast, global carmakers are flocking to sign joint ventures, and international export sales deals with China’s and India’s carmakers — whose total output will likely exceed 10 million cars in 2007.

Today, in countries such as Germany, USA, France and Australia, there is no difficulty finding 3 and 4-car households, nor 25-mile tailbacks every weekday on every main highway into congested, sprawling and polluted downtown centres. The same is to be found in Sao Paulo, Bangkok, Ankara, Seoul and Kuala Lumpur. Shanghai and Beijing are already close behind in the race to have daily crawl-ins on its fast expanding autoroutes and urban highways. Such is progress.

Explaining the “oil demand multiplier” inherent in motorization is a vast range of products arising from the magic of petroleum-based chemicals industries, all of them essential to the modern private motor vehicle industry, notably plastics, composites, paints and resins. As in Henry Ford’s time — when animal bone and ligaments, skins, wood and wood resins were still extensively used in car manufacture — the economic multiplier impacts of ‘unfettered growth’ of the car industry remain highly attractive to economic planners, resulting in motorization continuing to spread out and away from the core countries of the ageing ‘advanced industrial’ OECD North. As the world’s biggest carmakers know, saturation effect in the OECD North can be more than compensated by the “unlimited growth potential” of the Chinese car bomb.

The Ultimate Limit

There are, however, distinct limits on the ultimate reach of this tried-and-tested ‘growth strategy’. Today’s private car and similar vehicle or ‘light truck’ ownership rate in the USA is around 745 vehicles per 1000 inhabitants, with lower but similar rates (around 400-650 vehicles per 1000 population) obtaining in Japan, South Korea, Italy, Belgium, Germany, France, UK and other car-saturated economies. Applying the same ownership rates to India or China, and assuming these motor vehicles would, could, may or might be oil or gas-propelled, results in absurd numbers for annual oil or oil-equivalent gas consumption. In the case of China’s car fleet we are already, using World Bank and other data, at the fantastic but real average annual growth rate through 1995-2005 of about 19%, doubling China’s car population every 4 years. India is close behind.

The following is, of course, a fantasy projection, but its only proviso is that India and China will sustain the growth rates for car production and ownership that were experienced by the USA, New Zealand, South Korea, Japan, Canada, Australia, France, Germany, Italy, Spain and other ‘leading industrial nations’, for a period of less than 20 years. If their growth rates are higher, the period needed to attain ‘saturation ownership’ (the USA’s current rate) will of course be lower.

If China and India were to do this the entire oil supply of the OPEC group, about 33 million barrels per day production and 25.5 Mbd exports, would not even satisfy these two country’s car fleet oil requirement! The fantasy Hydrogen Economy, and of course the biofuels, is therefore the only way out for current political and business leaderships — when or if they care to forecast any further out in time than perhaps the next 5-10 years.

The Apocalypse Wagon [8]

We assume that the fantasy fleets of China and India operate at much less than the average European vehicle kilometrage per year EUR-6 (core 6 nations) of 22,000 km/vehicle/year.

EUR-27, we can note, has a lower average annual kilometrage, but in all the European Union countries outside the ‘core group’ average annual distances run are rising with economic growth.

Average fleet-wide car fuel consumption in Germany is 7.9 L/100km, and well above 12 L/100km in the ultimate ‘role model’ for motorization, the USA. We could play ‘reasonable’ and assume that the typical rate of annual oil demand for the Apocalypse Wagon is rapidly reduced in India and China, to two-thirds of the US benchmark, to about 8 L/100km. We will also assume that Indian and Chinese cars will only travel 18,000 km/year. Annual oil burn per car is therefore around 9 barrels/year.

Assuming that the Chinese and Indian fantasy fleet reaches 400 million units by 2025-2030 (170 million in India and 230 million cars in China), and annual oil burn per vehicle is 9 barrels (1440 Litres), daily average oil demand is as follows:

Chinese fleet of 2025: about 5.7 Mbd
Indian fleet of 2025: about 4.2 Mbd
Combined total: about 9.9 Mbd

This relatively ‘mid-case scenario’ is above 40% of current total net exports of the OPEC group, but we can easily go further. If China attained zero population growth, at its current 1.25 billion, and India did the same (which is even less likely), but both countries attain the Motor Nirvana of US ownership rates (around 745 vehicles per 1000 population), perhaps by 2040, their car fleets would number about 800 million vehicles (India) and 935 million vehicles (China). Even with a ‘technology optimist’ scenario under which these fantasy fleets only consume about 6 barrels/year each, their total consumption explodes to over 10 billion barrels-per-year, or around one-third of the world’s current total oil burn.

Fighting for Fuel

We therefore have a laughable fantasy, or an insight into exactly why three nuclear armed powers, China, India and USA, are ever more likely to fight amongst themselves, or confront EU importers, which include two declared nuclear weapons states, for the last oil reserves of the planet. Under any hypothesis — excluding childish technological fantasies and utopias such as those trotted out by Amory Lovins, Jeremy Rifkind and other latterday snake-oil pundits — there is simply no prospect of China, India or other countries, including Malaysia, Slovenia, Brazil, Turkey, Iran, Ukraine, Mexico, the Czech Republic and other emerging car producers, being able to achieve US, West European, Australian or Japanese rates of car production and ownership.

The Chinese Car Bomb therefore ticks onward, as each day another estimated 175,000 new cars and 57,000 motorcycles and scooters are produced. Each car or car equivalent (about 3 motorcycles or 0.25 heavy trucks) requires an average of about 2.5 barrels of oil and another 3.5 barrels equivalent of other energy inputs to produce, and must operate on bitumin based highways, on tyres that themselves are about 40% oil by weight.

Not only is this explosion of the world car fleet a serious threat to the Earth’s environment, but its oil demand impact will become a threat to international peace and stability.


Footnotes

1. Offroad and agricultural motor vehicles are in fact extensively, perhaps increasingly used for human and good transport on roads and tracks. This is notably the case in China and India, where the current lack of road motor vehicles incites the usage of agricultural vehicles for human transport (passengers riding in towed trailers). It can be noted that fuel efficiency of these ‘road vehicles’ is very low because of technical reasons, that is, vehicles designed for slow speed off-road being used for road transport.

2. Recent Chinese car sales growth: “China's car sales hit one million for first time,” Reuters, Dec. 16, 2002. “Shanghai: Annual car sales in China have topped the one million mark for the first time as a rising urban middle class crowns the world's fastest-growing market for foreign automakers, industry executives said on Monday. An official at the China Association of Automobile Manufacturers told Reuters 1.02 million cars were sold in China in the first 11 months of this year, representing a stunning 55.4 per cent jump from the same period in 2001.”

3. Find reference in McCluney’s pop piece.

4. Tadashi, Shimokawa, Jap Dept Transport - M Tadashi, “The Motorisation of Cargo Transport in Japan,” Hakuto-Shobu, Tokyo, 1982. Japan Dept of Transport for recent data. K Shimokawa, “Japan The Late Starter who Outpaced her Rivals,” in The Economic and Social Effects of the Spread of Motor Vehicles, edited T Barker, Macmillan, UK, 1987 Japanese Dept of Transport, White Paper on Transport, Japan Govt, 1984

5. G Konn and Y Okano, Study of Modern Motor Transport, Tokyo University Press, 1979

6. K Shimokawa, “Japan The Late Starter who Outpaced her Rivals,” in The Economic and Social Effects of the Spread of Motor Vehicles, edited T Barker, Macmillan, UK, 1987

7. UK Society of Motor Manufacturers and Traders, (SMMT) http://www.smmt.co.uk/home.cfm: statistics for 2001 showed the UK having 28.6 million cars and 3.5M commercial vehicles in use. This compares with the UK 1951 car ownership figure of 2.3M, 1971 of 12.35M, and 1981 of 15.63M.

8. “Global Car Production Statistics Pages”, 1 http://www.geocities.com/MotorCity/Speedway/4939/carprod.html, (Accessed 11-10-07) This site provides recent data on worldwide car production (from 1995). The very fast growth rates of car production in several countries (10-15 times their population growth rates) is clear. This indicates total production 2001 being about 40.9 million private cars, or about 112,190 per day, worldwide.


Copyright 2004,2007 Andrew McKillop


Andrew McKillop is editor of The Final Energy Crisis (which includes a version of the article above).

See also his World Car and Land Transport Fleet
and his Oil Prices, Economic Growth and World Oil Demand.


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