World Fossil Fuel Economics

Introduction If a subject this broad were to be covered in even moderate detail, it would require a set of books about the size of an encyclopedia. Since an acceptable length for this paper is a small fraction of one book, it will have to consist of a few samples of the subjects that I think are the most pertinent to World Fossil Fuel Economics. I plan to discuss the trends in world energy demand, particularly in the U. S. and Europe; the consumption patterns and cost patterns of oil, gas and coal; the prospects of synthetics; and some of the effects of government regulation of fuel economics. World Energy Demands Fig. 1 shows Free World energy consumption by principal areas for the period from 1950 to 1970 and a forecast for the period from 1970 to 1985. These figures include only the measurable forms of energy. An example of energy consumption that is not measured is the wood a peasant might cut in the forest and bum in a fireplace to heat his home. This omission probably is a very small part of the total. This forecast is not identical with that of Wayne E. Glenn (see Page 22), but the differences in total energy consumption are not significant. The U. S. consumption, which was 55 percent of the world total in 1950, had declined to 45 percent by 1970, and is expected to decline further to 38 percent by 1985. Western Europe has consumed 28 percent of the total from 1950 to 1970 and is expected to lose share slightly between 1970 and 1985. The most spectacular gainer is Japan, which increased consumption from 2.5 percent in 1950 to 7.5 percent in 1970, and is expected to reach nearly 17 percent by 1985. The over-all Free World total has grown from 62 quadrillion Btu (equivalent to 29 million B/D of crude oil) in 1950 to 151 quadrillion by 1970, an average growth rate of 4.5 percent/year. This total is expected to grow at a rate of 5 percent/year between now and 1985, reaching 315 quadrillion Btu (equivalent to nearly 150 million B/D). Fig. 2 shows which fuels supplied this energy between 1950 and 1970, and gives an estimate of how it will be supplied between 1970 and 1985.