November 12, 2013

Why did Cuba survive peak oil and North Korea didn't?

(Note that North Korea is a closed country, so many of the numbers here are only estimates)

When discussing the fact that the world is running out of oil, one country that often appears in the discussion of what might happen is North Korea. While the average American consumes 3541 liters of oil per year, the average North Korean consumes only 31 liters of oil per year, and the neighboring country South Korea consumes 2607 liters of oil per year. 

The energy sector is one of the most serious bottlenecks in the North Korean economy. North Korea used to import oil from mainly the Soviet Union and China, but after the fall of the Soviet Union, the oil imports sank with 80 percent. Also the coal production peaked in the beginning of the 1990s and declined from 43 million tons to 18.6 million tons in 1998. The main reasons were mine flooding and outdated mining technology. As the North Koreans used coal for electricity generation, the decrease in coal production caused problems with industrial production and electricity generation. By 1996, road and freight transport were reduced to 40 percent of their 1990 levels, iron and steel production were reduced to 36 percent of 1990 levels, and cement was reduced to 32 percent.

North Korea's 4100 tanks, 2100 armored vehicles, 8500 artillery guns, and 5100 multiple launch rocket systems are dependent on oil. The supply chain behind this army is also dependent on oil - you need trucks to haul fuel, ammunition, and other supplies. And it's the military that's the prioritized consumer of oil in North Korea. Only after the military takes its needed fuel, other sectors can take theirs. While the total supply of diesel has dropped by 60 percent since the 1990s, the agricultural share of the diesel supply has dropped to 4 percent of the 1990 level. As a result, 80 percent of North Korea's farming equipment, such as tractors, is not used. More people and animals had to become farmers, so the food demand increased, but there was no supply to meet it. It's estimated that over 3 million people have died as a result.

North Korea has a tiny oil industry - they are only producing 118 barrels per day - so they have to import about 15 000 barrels of oil per day. It has been estimated that 80 percent of the oil is imported from China, but as the relationship with China worsened after the threat to launch nuclear missiles, North Korea has begun to talk with Iran. It has imported oil from Iran in the past, including a period before the economic crisis in North Korea became serious in the 1990s.

One country that experienced a similar crisis as North Korea did is Cuba. In the 1990s, after the fall of the Soviet Union and after an increased blockade by US, Cuba couldn't import oil and entered a period known as the Special Period. Blackouts could last for sixteen hours a day, and water had to be roped with buckets to the top of the tallest buildings. As an act of desperation, they imported 1.2 million bicycles from China and 500 000 more were manufactured by the Cubans themselves. 

But the Cuban society adapted to these new conditions. It became more common to hitchhike, and government cars were required to pick up anyone who wanted a ride. The Cubans developed the Camel truck that could carry 300 people. In small towns, the Cubans used horses and mules for transportation. They ate less, and they walked and biked across the country, so the average Cuban lost 12 pounds [6 kg], thus the number of heart attacks, diabetes, and strokes decreased. 

The reason to why Cuba managed the crisis better than North Korea can be explained by:
  • Cuba has a warmer climate with a longer growing season
  • Cuba has a better ratio of population to arable land
  • Cuba has a large percentage of scientists, engineers and doctors in its population. Even before the crisis, Cuban scientists had begun exploring alternatives to fossil fuel-based agriculture
  • The Cuban government had social programs in place to support farmers and the population through the crisis and the transition into ecological agriculture
  • The military is less prioritized in Cuba. Cuba, with a population of 11 million, has an active military of 85 000 personnel. North Korea, with a population of 25 million, has an active military of 1 106 000 personnel

But the average Cuban is still consuming 922 liters of oil per year, which is much more than the average North Korean who consumed only 31 liters of oil per year.

Source: North Korean data, Economy of North Korea, The Asahi Shimbun, From the wilderness [1], From the wilderness [2]  The Engineer