World Car and Land Transport Fleet
JUNO ME Asset Management Info Note: Ground-up Estimation
Andrew McKillop, Head of Research
June 2007, updated November 2007

This concerns all road and offroad land transport vehicles: cars, motorcyles and scooters, light trucks, heavy trucks, buses, tractors , scrapers, dozers and other construction and agricultural vehicles, military vehicles, sport vehicles, etc

The unit used is the "Car Equivalent Unit" described below.

BASIC UNIT

Car equivalent unit, CEU. Approx 850 kgs weight; Engine size about 1.6 litre; annual mileage about 12,500 kms, fuel consumption in oil or oil equivalent about 6 - 12 litres/100 km. Average fuel consumption during use: about 8 litres/hour, or 9 barrels/year

3 small engined motorcycles or scooters = 1 CEU
1 scraper, bulldozer (150 litres/hour consumption) = 15 CEU
1 bus or heavy truck = 5 - 9 CEU
1 large engine motorcycle = 0.75 CEU

Annual oil or oil equivalent LPG or CNG consumption: Average for total world fleet can be estimated at about 9 barrels or 1440 litres per CEU per year.

GROWTH RATE
Growth of world fleet: World car fleet is growing at about 6.5%/year or 55 million net additional cars/year (car production 2007: about 70 million, 15 million scrapped in year). Fast growth in China, India, East Europe, Africa, Mid East and Latin America easily counterbalances the slight contraction (about 1% to 2%/year since 2005) in a few western EU countries and declining growth of car fleet in USA.

World motorcycle and scooter fleet is growing more rapidly than car fleet: total production of motorcycles and scooters will attain about 25 - 30 million units in 2007. Large numbers of new scooters are now however e-Bikes (electric) in China, with very high growth rate.

Oil-powered motorcycle and scooter fleet is growing at about 7%/year.

ESTIMATED TOTAL OPERATING NUMBERS AS OF Q2, 2007

Cars: 800 - 810 million CEUs
Motorcycles & Scooters: 60 - 90 million CEUs
Other CEUs: 100 - 125 million CEUs
Total CEUs: 960 - 1025 million

OIL CONSUMPTION
Oil consumption: For approx. 1 billion CEUs this gives an operating oil demand of about 9 billion barrels/year as operating energy cost. This does not include infrastructure, manufacturing and operating support for the world car fleet — i.e., car manufacture, roads, bridges, tunnels and other construction, parking lots, repairs, maintenance, traffic control in cities, etc.

US and CANADIAN CAR FLEET: 13 BARRELS/CEU/YEAR
In the US and Canadian cases, annual oil consumption per car for their fleets which are about 98% gasoline and diesel-powered, is placed by US automobile, energy and consumer associations at about 540 US gallons or 13 barrels/year. This may be a slight over-estimation, so a more cautious estimate is given below for the fleet-weighted average US and Canadian consumption.

Fleet-weighted average annual oil demand: US and Canadian fleet weighted average oil consumption for private cars is estimated at about 11.75 barrels/car/year

EU-27 and Asian average is about 8 barrels/car/year

OIL DEPENDENCE
Dependence on oil: 97% of world car and CEU fleet operates with oil or LPG or CNG. About 93% oil and 4% LPG, CNG (compressed natural gas). Only 3% of world car fleet operates with biofuels, electricity or hydrogen. Bioethanol in Brazil supplied about 13.5% of total land transport energy requirement in 2006.

Dieselization of car fleets reduces annual oil consumption for the same annual mileage, due to diesel fuel containing about 10% more energy per unit volume than gasoline (around 38 MJ/litre for diesel fuel and 35 MJ/litre for gasoline).

The USA and Canada have a tiny proportion of current car fleets dieselized — less than 5% by most estimates. Japan has about 8% dieselized car fleet. The EU-27 national average is likely above 45% (around 49% in some countries, e.g., France and Germany).

OIL DEMAND FOR CAR MANUFACTURE
Construction energy requirement depending on size and type of car ranges from 5 to 9 barrels equivalent per unit. 40% of this is direct oil consumption for tyres, plastics (around 130 kgs wight of plastics per CEU), composite materials, paintwork, greases, lubrication oils, hydraulic fluids, etc. The direct oil consumption per manufactured CEU is therefore 2 to 3.6 barrels oil. Other energy requirements for car production are supplied by gas, coal, electricity, a certain proportion (about 12.5% world average) of electricity being obtained from oil-fired generation.

For current (2006-2007) car and CEU manufacture of about 70 million cars and about 25 million other CEUs per year, oil demand for manufacture can be estimated at around 0.275 billion barrels/year

Infrastructure support energy requirement (car manufacturing plant construction, roads, bridges, tunnels, ferries, parking lot construction, city traffic control, garage servicing, spare parts, repairs, mainternance, etc) are not included in the above estimate.

FLEET SIZES

WORLD CAR FLEET cars only, end 2007: about 800 - 820 million units

WORLD CAR EQUIVALENT FLEET, end 2006: about 950 million CEUs

OIL CONSUMPTION CARS ONLY: about 7.3 billion barrels/year

OIL CONSUMPTION CARS AND CEUs: about 9 billion barrels/year

MANUFACTURING

CAR AND CEU CONSTRUCTION 2007 averages YTD and forecasts:

USA: about 16.5 million cars and light trucks, 4 million heavy trucks
EU-27: about 15.9 million cars and 2.5 million heavy trucks
Japan: 9.01 million cars, 1.7 million trucks and about 2 million motorcycles
China: about 7.5 million cars and 20 million motorcycles
India: about 2 million cars and 7.7 million motorcycles

Note: African imports of secondhand used cars from Europe, 2006: about 3.9 million units.

WORLD OIL CONSUMPTION DUE TO CAR and CEU PRODUCTION AND OPERATION

2007 rate about 9 billion barrels/year — operation only

2007 rate about 9.3 billion barrels/year — manufacture and operation

World oil consumption 2007 about 31.9 Bn barrels.

PROPORTION OF WORLD OIL DEMAND DUE TO CARS AND CEU

About 28%.

CO2 emissions due to cars and CEUs: about 25%-28% of world total.

OIL DEMAND GROWTH DUE TO GROWTH OF WORLD CEU FLEET

Estimated increase of world oil demand due to manufacture and operation of additional cars and CEUs, annual rate, late 2007 estimate:

About 0.6 Bn barrels/year (600 million bbl/year) or 1.64 million barrels/day.

NOTE: World car and CEU fleet, and growth of production, results in approximately 1 car or CEU being added to the world land transport fleet for every baby that is born (world human population growth is about 70 million/year in 2006-2007).

Current stock of world land transport vehicles results in there being approximately 1 car or CEU for every 7.5 persons on the planet.

— Andrew McKillop for Juno ME Asset Mgmt, 2007

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