Monday, March 17, 2008

GDP per Capita and Energy Consumption

Malampaya Project

In the preceding post, i pointed out the unusual negative correlation between GDP per capita and oil imports during the present growth episode (2001 to 2006). In the comments , fellow blogger Jon Limjap brought up the possibility that this may be due to the increased reliance on Natural Gas leading to a reduction in oil imports. The following chart shows the amount of energy consumed (in kilotons of oil equivalent or 'ktoe') according to power source*:

Figure 1: Final Consumption by Energy Source
Click on image to enlarge

One thing immediately noticeable is the sudden appearance starting in Year 2003 of 'Others'. (Nope, this is not because of Natural Gas from Malampaya.) The bulk of this category consists of biomass in the form of Fuel Wood & Woodwaste which accounts for over 80% of the total with the remainder made up of Bagasse, Charcoal and 'Other Biomass'. As explained in the APEC Energy Demand and Supply Outlook (2006):
In 2002, the Philippines’ residential energy consumption was dominated by biomass (from rice and coconut residues, and wood waste) at 58 percent. However due to the expanded access to electricity and the availability of commercial fuels, the share of biomass in total residential energy demand is projected to decrease from 58 percent in 2002 to 28 percent in 2030. Consequently, limited growth in biomass is expected at a modest rate of 0.2 percent due to the continued use in rural areas as a fuel for cooking.
Clearly, biomass as a source of fuel has already been in use even before 2002, although not accounted for in the Energy Balance Tables prior to that year. For consistency of comparisons, i will therefore disregard this component from the analysis and focus on Coal, Petroleum and Electricity and redraw the above chart as follows:

Figure 2: Final Consumption by Energy Source
(Coal, Petroleum & Electricity)

Click on image to enlarge

Natural Gas (along with Crude Oil, Geothermal, Hydroelectric and others) is used as an input to generate Electricity so any increase in contribution will be reflected in this component. However, it is readily apparent that, as a source of power, Electricity still constitutes a minority and is dwarfed by Petroleum. (The portion of Crude Oil that is used as input to Electricity is not reflected under Petroleum but is incorporated as part of Electricity. This prevents any double counting.)

The relative contributions of the various inputs to Electricity are shown in the diagram below.

Figure 3: Inputs to Electricity
Click on image to enlarge

So the answer to Jon's question above is that, as far as electricity is concerned, Natural Gas started contributing significantly to electricity generation in 2002 and along with coal has indeed replaced petroleum as an input to Electricity. However, it is also clear from the above that Electricity remains a small part of the Country's overall Energy Consumption. So the question remains on whether Energy Consumption has kept pace with GDP per capita growth. This would be the subject of my next blog entry.

*Source: APEC Energy Database


Janette Toral said...

Thanks for sharing this. I look forward to the update. It helps ordinary citizens like me to understand these figures being reported by the government much better. Cheers!

cvj said...

Thanks Janette! I have updated this entry and have just posted a new entry on the same topic. Happy Easter!

Anonymous said...

Great analysis CVJ. I've read your follow up posts and agree that something does seem wrong with the data, despite my initial hypothesis regarding the natural gas.

cvj said...

Thanks Jon:-) Happy Easter!