Energy efficiency in OPEC member countries: analysis of historical trends through the energy coefficient approach

Yazeed Al-Rashed and Jorge León

OPEC Energy Review, 2015, vol. 39, issue 1, 77-102

Abstract: Period-wise energy coefficients for members of the Organization of the Petroleum Exporting Countries (OPEC) were calculated, showing diverse behaviour among them. Behaviour of aggregate OPEC coefficients reflects the general trend among its member nations. Acceleration of transportation fuel demand fuelled high intensities in the mid-1970s. An overall economic downturn in the 1980s did not dampen demand growth, but in fact accelerated in the industrial and household, public and commercial (HPC) sectors, thus keeping energy coefficients above 1. Energy coefficients were headed towards unity in the 1990s, before finally settling under 1 in the 2000s. We caution from interpreting these developments as improvements in efficiency, as OPEC member countries have not become ‘post-industrial’ as more value-added industries, infrastructure development and stability encourage consumption. Electricity coefficients can be used as a proxy for consumer behavioural efficiency, as the HPC sector is its largest consumer. After the 1990s, almost all OPEC member countries had higher electricity coefficients than energy ones, due to reasons spanning from higher urbanisation and population growth rates, to low electricity prices. This suggests that electricity use in the industrial and HPC sectors will be a major driver of future demand growth for those countries, especially as their service sector grows and their economies diversify.

Date: 2015
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