TRENDS OF THE NET ENERGY OF PETROLEUM PRODUCTS IN
DIFFERENT COUNTRIES USING ENERGY INTENSITY RATIOS
John P Maxwell, Jackson School of Geosciences/ LBJ School of Public Affairs, The University of Texas at
Austin,+1 248 505 0208, john.p.maxwell@utexas.edu
Carey King Ph.D., Center for International Energy and Environmental Policy, Jackson School of Geosciences, The
University of Texas at Austin +1 512 471 5468, careyking@mail.utexas.edu
Overview
This paper calculates the Energy Intensity Ratio (EIR) for crude oil, gasoline and diesel of multiple countries.
The EIR as defined by [King, 2010] is “the energy intensity of a fuel or energy source divided by the aggregate
economic energy intensity of a country.” EIR is one measure of net energy expressed by prices, and was shown in
[King, 2010] to be an effective proxy for energy return on energy invested (EROI) for the United States. EROI and
EIR measure the battle between technology/society advancement and energy resource depletion. An increasing EIR
means technology is increasing faster than depletion, and a decreasing EIR means resource depletion is
overwhelming production and consumption technology efficiency.
The EIRp is way to view an energy system within a country in terms of its effective net energy. A significantly low
EROI or EIRp (e.g. for oil), associated with increasing prices, has coincided with economic downturn and times of
significantly less economic growth [King, 2010; Hamilton, 2009; Murphy and Hall, 2011]. The effect of the higher
crude oil prices may slow demand for the product and the resulting economic activity associated with the productive
use of the refined fuel which would decrease the economic benefit of the use of the fuel.
The paper will be organized in the following way: Introduction, describing the price-based EIR: EIRp, and how these
tools describe energy use in various countries. Next, the second section will describe the subsidy and tax categories
for the countries analysed and how the countries compare to one another. The third section will discuss the set-up of
the formulas and the results for the different countries. The fourth section will discuss statistical trends of the EIR p
and contrast countries within and between the subsidy and tax regimes. The last section will consider the
significance of the EIRp and the economic and policy considerations.
Methods
Derive the price-based EIR, EIRp for gasoline and diesel for various countries for the years 1980-2008 using the
method from [King, 2010]. We use diesel and gasoline price data for the following countries:
Diesel
Gasoline
Subsidy Category
Indonesia
Tax Category
Australia
Very High Tax Category
Austria
C anada
Brazil
C hina
C zech Republic
C hinese
Taipei
India
Mexico
Denmark
Germany
Hungary
New Zealand Japan
Russia
Singapore
South Africa
USA
Luxembourg
Republic of Korea
Subsidy Category
India
Tax Category
Australia
Very High Tax Category
Austria
Indonesia
Brazil
Switzerland
Mexico
C anada
Sweden
Thailand
C hina
Norway
New Zealand
Russia
Denmark
France
South Africa
Germany
USA
Netherlands
United Kingdom
Greece
Italy
Portugal
Spain
Japan
C zech Republic
Turkey
Statistical analysis of the countries is competed to gain insight into policy (e.g. tax) and price effects on gasoline and
diesel relative to the energy intensity of each country economy. We describe trends for countries organized into
three types of subsidy or tax categories as function of the price of the refined product as defined by the Germany
Federal Ministry for Economic Cooperation and Development [2009]. A subsidy is defined as the case when country
consumers pay for gasoline or diesel and a lower price than crude oil equivalent. A tax is defined as the case when
country consumers pay more for gasoline and diesel than crude oil. These tax/subsidy categories we use are very
high tax, (regular/low) tax, and subsidy.
Although any given country might significantly raise or lower its fuel tax over time, for purposes of trend
analysis the country will be viewed over time within its peer group from the 2008 price points (including taxes).
There three benchmark price points that segment the tax/subsidy categories are: world crude prices (various world
spot prices), US gasoline and diesel price, Spain gasoline and diesel price.
Results
1.
Use the King 2010 EIRp formula for crude oil (West Texas Intermediate, Brent Crude, Malaysian Tapis,
Arab Light Crude) and the statistical comparisons of countries (by tax/subsidy category) from 1980-2008
2.
Use the King 2010 EIRp formula for gasoline and the statistical comparisons of countries (by tax/subsidy
category) from 1980-2008
3.
Use the King 2010 EIRp formula for diesel (distillate fuel oil) and the statistical comparisons of countries
(by tax/subsidy category) from 1980-2008.
4.
The EIRp for the subsidy and tax categories differed between the gasoline and diesel.
Conclusions
EIRp changes post-2000 decrease considerably and have higher correlation between countries than pre-2000. Very
high tax regimes create an EIRp with lower variability (e.g. lower standard deviation) than a country with a regular
tax regime or subsidy. The trend of increasing oil prices could have different effects on different economies and
measuring the countries based on subsidy or tax regimes can provide insight into the energy system of the economy
in terms of how social services depend upon cheap, or high net energy, energy resources upon which to tax.
Calculating EIRp as a proxy for EROI of countries can be extended to other fuels and energy technologies to
understand how to use net energy as a concept for future energy scenarios and projections.
References
EIA (2011) U.S. Energy Information Administration Annual Energy Review 2010 (Average Energy Content per
BBL of Petroleum)
GFMECD. International Fuel Prices 2009 - 6th Edition GTZ (Transport Policy Advisory Services) Germany Federal
Ministry for Economic Cooperation and Development.
Hamilton, J. (2009) Causes and Consequences of the Oil Shock of 2007-08. IN ROMER, D. & WOLFERS, J. (Eds.)
Brookings Papers on Economic Activity.
IEA. Energy Prices and Taxes (1978-2008), International Energy Agency.
King, C W, (2010) Energy intensity ratios as net energy measures of United States energy production and
expenditures, Environmental Research Letters 5 044006.
Murphy, D. J. & Hall, C. A. S. (2011) Energy return on investment, peak oil, and the end of economic growth.
Annals of the New York Academy of Sciences, 1219, 52-72.