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An Oil Spike Pain Index

The oil price spike is clearly going to have a serious impact on countries that rely on energy imports.

The question of the day is how much of an impact?

Analysts have looked at various indicators, including the proportion of a country’s GDP made up by oil imports.

But a country’s reliance on energy imports is only part of the equation. Another is its relative efficiency in converting energy into national output.

To that end, I looked at 35 countries, all the major developed ones, most of Europe excluding the former Soviet Union, plus leading emerging markets like China, Brazil, Russia and India. Unsurprisingly, colder countries and those which most easily cover their energy needs were also most profligate in the amount of energy they used to produce a dollar of GDP (on a purchasing power parity basis).

Iceland, for instance, which is 80% self sufficient for its energy needs, used nearly 21,000 British thermal units (BTUs) per dollar of output in 2009. Now one shouldn’t read too much into a country with a population of little more than 300,000. There are undoubtedly regions with similar populations in other countries that are as energy intensive. And the geothermal energy Iceland produces is largely pollution free and cheap and easy to produce.

Fewer excuses can be made for other countries. Russia, for instance, uses 14,500 BTUs per dollar of GDP. Sure, it produces around four times more oil than it consumes, but the Russian economy’s inefficiency represents an opportunity cost. Canada, a country with similar climate challenges, is 20% more efficient in its energy usage, while Norway is 40% more efficient. The U.S. is by no means a beacon of efficiency, but still manages to use half the energy per dollar of output that Russia does.

China, South Korea and Bulgaria are also energy inefficient in GDP production.

So who does well?

[More over the jump, including Oil Spike Pain Index chart.]

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