The Geography of Energy

Gerald Manners

• Publisher: Routledge
• Year: 2019
• ISBN:
  9780429560620
• Edition: 1
• Topic: Business
• Subtopic: Energy Industry
• Index: Business

Originally published in 1964 and revised in 1971. This is an examination of the three principal factors which influence energy production and consumption, and the associated trade in fuel and power: market, transport and politics. Topics discussed include the economics of oil pipelines and tankers; the location of electricity generation and of gas manufacture, inter-fuel competition, and national and international energy policies.

I

INTRODUCTION

L’architecture économique et politique du monde est conditionnée par les aptitudes inégales des collectivités humains à organiser la production, et, parmi les aptitudes, la mobilisation de l’énergie est une donnée fondamentale (George, 1950, 9).

The nature and the speed of economic development is intimately related to the control and the use of energy, and this relationship has a geographical expression. A low level of energy consumption in an economy is a certain indication of underdevelopment—for economic growth consists essentially of increasing the average productivity of a labour force, and this in turn is directly influenced by the quantity of energy which can be incorporated within the production process. The economic development of a country or region, therefore, hinges upon either the harnessing of its indigenous energy resources or the transport of energy supplies to it. A shortage of energy in an economy presents one of the most difficult barriers to economic progress. If the investment of capital in the energy sector lags, and the supply of energy becomes inelastic, parts of any productive investment are liable to remain idle. Indeed, the availability of energy to an economy is more important than its cost, for whilst energy constitutes an indispensable factor of production, its expense is frequently only a relatively small part of the total costs of manufacture. The importance of energy in economic development, therefore, is very much more than the modest contribution which the producer supplier industries make to the gross national product or its cost to that economy; serving as a catalyst as well as a fundamental input, it has both a qualitative as well as quantitative role in economic growth.

As a consequence of the close relationship between the use of energy and economic development, there is a high degree of positive correlation between the consumption of energy and the standard of living in a country. Table 1 shows income and energy consumption per head in several countries, and the close relationship between the two, a relationship which pertains equally to the several regions within a country. As Davis put it in 1957 (13): ‘Most economies, as they have developed, have devoted a smaller and smaller proportion of their national income to the purchase of raw materials. Energy, however, being required at all stages—primary, secondary and tertiary—has moved upward more or less in line with and sometimes ahead of each nation’s total output of goods and services.’ In fact, research has shown the existence of such a close relationship, both historical and geographical, between energy consumption and the degree of economic activity that it has become common practice to use the one to estimate the other (Guyol, 1960, 68–70).

Table 1

GROSS NATIONAL PRODUCT PER HEAD, ENERGY PRODUCTION AND ENERGY CONSUMPTION IN SELECTED COUNTRIES, 1965

Country	GNP per captia ($)	Energy production (million tons coal equivalent)	Energy consumption
			per capita (Kg coal equivalent)	per $1 of GNP (Kg coal equivalent)
United States	3,515	1,633	9,671	2.75
Canada	2,658	134	8,077	3.04
Denmark	2,333	1	4,149	1.78
Switzerland	2,331	3	2,669	1.16
West Germany	2,197	184	4,625	2.11
France	2,104	70	3,309	1.57
United Kingdom	1,992	194	5,307	2.66
New Zealand	1,970	3	2,603	1.32
Australia	1,910	38	4,697	2.46
Czechoslovakia	1,561	74	5,870	3.76
USSR	1,340	925	3,819	2.85
Japan	2,122	62	1,926	1.58
Venezuela	882	247	3,246	3.68
Cyprus	702	—	927	1.32
Libya	542	76	613	1.13
Chile	497	7	1,119	2.25

Source: Darmstadter et al. (in press) passim; United Nations Statistical YearBook.

The correlation between energy consumption and the standard of living in countries and regions is, of course, far from perfect (see Fig. 1). Several explanations can be found for this. One is the nature of production and the stage of economic development. Certain types of industrial activity, such as steel and electro-chemical manufacture, consume much greater quantities of energy than others, without necessarily yielding a proportionate increment of wealth to the economy in which they are located. Much heavy industry is in this category. When, therefore, a country is passing through that phase of industrialization which involves the building-up of basic or heavy industries, there is a tendency for the amount of energy consumed per unit of national wealth to be greater than before industrialization—or after industrialization when lighter and service industries come to assume a greater importance in the economy. A second explanation of the imperfect correlation between energy consumption and gross national product is the variable efficiency with which fuels are transported and consumed. Solid fuels, for example, are technically more ‘difficult’ to transport and to use than liquid fuels and gases. A change in the fuel mix of an economy therefore—the fuel mix is the proportions of different energy sources which are combined to satisfy energy demands in a particular place—may imply the greater use of the more efficient fuels and so modify the precise relationship between energy consumption and wealth there. A third explanation is the nature of the physical environment. Technologically advanced economies in the temperate zones employ considerable quantities of energy for space heating both homes and workplaces, but comparable amounts are not required in tropical climes. And a final factor modifying the relationship between energy consumption and living standards is the possibility of input substitution in the production process. The creation of wealth involves the combination of many factors of production and it is often possible to substitute certain inputs—such as labour or capital—in place of energy inputs if the latter happen to be particularly expensive.

From Table 1 another point emerges. Although a high income per head is accompanied by a high level of energy consumption, it is not necessarily accompanied by the production of large quantities of energy within the same national boundaries. Where other factors favourable to industrial and economic growth are present, energy supplies can be and are imported; and when a local supply of energy is exhausted it is normal for an industry or country to scour the world for further supplies, rather than for production to be transferred to an alternative location with a ready source of energy. In fact, a large proportion of the world’s fuel reserves are located in less developed The relationship between Gross National Product per capita and energy consumption per capita, 1965. (Source: Darmstadter, J. (1970), Energy and the economy, Energy International, August, 35) economies which export the greater part of their present production to Japan, the USA and the highly industrialized countries of Western Europe. Quite clearly, the low levels of energy consumption in these developing countries is no fault of energy supplies, but rather is a consequence of a lack of demand, which in turn is the result of a complex of political, social, historical and economic causes. The same observation can be made at the regional scale. In the United States the two leading States from the point of view of income per head are Connecticut and New York, both of which produce almost no energy, whereas some of the major fuel-producing States have relatively low incomes per head. Only California and Illinois can claim both a high per capita income and a considerable energy production; but there is very little relationship between the two phenomena.

Fig. 1
The relationship between Gross National Product per capita and energy consumption per capita, 1965. (Source: Darmstadter, J. (1970), Energy and the economy, Energy International, August, 35)

The spatial contrasts between energy production and consumption naturally imply substantial transfers of energy from its sources to its places of consumption. This movement of energy is significant in its own right; but it is the more so for the fact that energy shipments make up a very large proportion of total commodity movements and are a major element in the geography of transport. Just as coal dominated total freight movements by land and sea fifty years ago, so the transfer of oil is by far the largest item of transport by volume throughout the world today. In 1965, some 1,574 million tons of coal equivalent energy entered international trade, and of this 1,395 million tons were liquid fuels.

Energy, therefore, is a critically important factor in three major aspects of economic life. Its use is closely related to the nature and the speed of economic development, to geographical variations in the standard of living, and to some key elements in spatial interaction. In addition, it demands attention in so far as economic growth, and the steady replacement of animate energy with inanimate forms, have led to the expansion of energy production and consumption at an ever-increasing rate in recent decades. World energy consumption rose from 1,485 million coal equivalent tons in 1925 to 2,611 million tons in 1950 and 5,475 million tons in 1965: by 1980 the figure could be 11,195 million tons (Schurr and Homan, 1971, statistical appendix), these figures represent an average annual rate of increase of 2.3% between 1925 and 1950, of 5.1% between 1950 and 1965, and of 5.2% between 1965 and 1980.

Economic geographers seek to understand, by description and analysis, the variable character of economic life over the surface of the earth and the associated spatial interchanges. Yet it is surprising that the study of the energy variable, important though it is, has received comparatively little attention in the past, and still excites only a limited curiosity today. Certainly there have be...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Dedication
• Contents
• Figures
• Tables
• Preface
• 1 Introduction
• 2 The Basic Complexity
• 3 The Market (I)
• 4 The Market (II)
• 5 Transport (I)
• 6 Transport (II)
• 7 Transport (III)
• 8 Political Factors (I)
• 9 Political Factors (II)
• Bibliography
• Index