Wednesday 22nd June 2005AD
FROM PANAMÁ CITY TO BEIJING OR NEW DELHI

For the first-time visitor, sitting in an outdoor café in the downtown banking district of Panamá City can only be described as an eye opener.  Panamá is a mixing pot of opposites; a place where the north Americas meet the south, where east meets west, and the old meets the new.  The city itself is a combination of hundred-year-old European architecture blended with modern high-rise commercial, banking and apartment buildings.

A labyrinth of narrow one-way streets crisscross this intensely busy city.  Every hour, every intersection plays host to literally thousands of vehicles merging from all directions, usually without major incident.  It has been said that driving in Panamá City is not for the faint hearted.

It is an amazing fact that the number of cars on the streets of Panamá City doubled every single year from the late 1980's through all of the 1990's, which helps to some degree to explain the bedlam on it's streets today.  More interesting is to learn that Panamá City was not alone.  From former USSR states to Asia and India, this explosion in powered transport has been a steady trend in recent decades as the developing nations have begun to embrace more affordable motor vehicles and easier credit. 

Every morning Beijing roads are bumper to bumper as China's new middle class commute their way to their jobs in the towering skyscrapers of downtown. Every single day one thousand new cars roll onto Beijing's roads, with a million more estimated between now and 2008, and this is just Beijing!  It is the same story in all of China's big cities from Shanghai to Guangzhou to Hong Kong.

An alarming trend noted of late is that the appetite for vehicles amongst China's emerging middleclass is not the smaller 1-liter-powered cars popular now in energy-conscious Europe, but rather the larger V6 and V8 powered SUV's so loved in North America.

For years, the Chinese government has encouraged driving. It initiated construction of a 52,000-mile cross-country superhighway system and passed a law insuring that state-owned banks provided car financing to the masses.

Yet the exponential growth in the number of vehicles on the roads of the world, while making an interesting observation, actually are only a small and relatively insignificant part of the growing Energy Demand equation. 

Staying with China for a moment, two-thirds of China's oil consumption comes from industrial uses (not cars) which includes the big user; power generation for China's myriad of factories and industry.  Energy analysts worldwide understand that China has an energy problem.  For several years China's increase in demand for oil has outstripped its population and economic growth combined.  In 2003, China, a country of 1.3 billion people, overtook Japan as the world's second largest importer of oil after the United States.  Recent years it has regularly resorted to rolling blackouts in an effort to maintain reliable power to its factories.  

In an ideal world expanding China's power grid and diversifying electricity generation from oil to natural gas, nuclear and hydropower would go a long way to stemming the tide of crude oil needed to keep its economy afloat. Whether this happens from choice or harsh necessity only the future can tell.

Best Regards
Philip Judge
pjudge@anglofareast.com