Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

China's need for oil expected to dominate energy scenario
The Billings Gazette ^ | September 2, 2004 | JIM GRANSBERY

Posted on 09/02/2004 5:33:25 PM PDT by hedgetrimmer

While the United States' attention is focused on the Middle East and Iraq, it is China that will dominate the world energy picture in the near future, a petroleum economist told Montana's gas and oil producers Wednesday.

"China has gone berserk," said Michael Economides.

"In the last decade, China's oil consumption increased by 2.5 million barrels a day, the largest in the world so far," he said. "The U.S. consumption increased by 1.8 million barrels a day.

"If China were to use the same per capita consumption as the United States, it would require 80 million barrels of oil a day or more than the entire world uses," Economides said.

Economides spoke at the Montana Petroleum Association's annual meeting in Billings. About 200 attended the function at the Sheraton Hotel.

Economides is a professor at the University of Houston. He is also the chief technology officer for the Texas Energy Center and the co-author of "The Color of Oil: The history, the money and the politics of the world's biggest business."

He was proud to expound on his prediction of $50 a barrel oil made a year ago and his analysis of the energy needs of the world and the United States in the coming two decades.

"It may go even higher soon," he said of the price of oil, which in recent weeks flirted with the $50 benchmark, but has since eased to the low $40s.

He said the United States should pay more attention to what is going on in Venezuela where President Hugo Chavez is a bigger threat to U.S. security than was Saddam Hussein. A recent recall election in Venezuela failed to remove Chavez from office.

Economides said natural gas prices at $10 per thousand cubic feet will remain for some time and he agrees with Federal Reserve Chairman Alan Greenspan that the importation of liquid natural gas "is the only solution" to future natural gas demand in the United States.

China's need for energy "will be China's choke point," he said. "Expect a very assertive, if not belligerent, posture.

"This would be a normal expectation," Economides said. "Geopolitically, it will be seeking the same energy sources as the West and domestically, it will be embarking on massive nuclear development with all its other ramifications."

He said China's energy future passes through Russia which has huge deposits of natural gas.

He warned, too, of the political situation in Russia where President Vladimir Putin is trying to "resovietize Russia."

"Iraq has diverted U.S. attention from Russia," Economides said.

Early in his presentation, he provided a graph that demonstrated energy consumption is a real indicator of the wealth of nations.

The U.S. is at the top of the list. By comparison, Mexico, China and India are at the lower end of the chain.

"Which country would you like the United States to be," he asked as a retort to those who would have this country use less energy.

Since World War II, the United States has been on a steady downward trend in its use, he said, because "we have become more efficient."

And he dismissed global warming as akin "to alchemists' claim to change lead into gold."

In greenhouse politics, the data contradicting the alarmists' claims does not matter, he said.

In another presentation to the MPA members, William Hansen, a petroleum geologist from Great Falls, outlined the oil and gas production Alberta compared to Montana in the "Thrust Belt" on the east slopes of the Continental Divide. The Thrust Belt is a geological formation created when the Rockies were formed and the deposits of gas and oil were trapped underneath them.

He said that in Canada, 19 trillion cubic feet of natural gas has been developed to date. In Montana, 0.007 tcf have been recovered.

"The trend stops at the border," he said.

He said 1 tcf heats 9 million households for one year.

Hansen said in 2003 Canada exported $62 billion in energy to the United States, including $23 billion in natural gas from the Thrust Belt.


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: 80millionbarrels; china; energy; energyconsumption; oil
"China has gone berserk"

China has learned to make money and they need energy to do it.
1 posted on 09/02/2004 5:33:26 PM PDT by hedgetrimmer
[ Post Reply | Private Reply | View Replies]

To: hedgetrimmer

That very phrase discredits the writer, IMHO.


2 posted on 09/02/2004 5:34:48 PM PDT by OldFriend (WAR IS THE REMEDY OUR ENEMIES HAVE CHOSEN)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hedgetrimmer
While the United States is being forced back into the 19th century for energy use under sustainable development, China's energy use expands to absorb all available resources...

Chinese Oil Demand Drives Up World Prices

China’s oil consumption in 2003 makes it the world's second largest consumer of oil after the United States. According to last year's figures from British Petroleum, China increased its oil use by 11.5 percent, consuming 6 million barrels per day. The growth figure continues to rise according to the International Energy Agency. During the first seven months of 2004, China's annual consumption rate increased by 40 percent, with a further nine percent rise in oil consumption expected in the third quarter.

One-third of the growth in global oil demand comes from China. With OPEC reaching its short term production limits, China's rising appetite for oil has helped drive up the world's oil prices.

China's industries consume the majority of its oil, as they help generate phenomenal growth rates. But as increasing numbers of Chinese begin using cars, they drive up demand for oil even further. In the first quarter of this year, new car sales in China increased by 45 percent.

Besides oil, China is pushing global demand for other resources. According to 2003 government figures, China consumes around half the world's production of cement, one-third of its steel, one-fifth of its aluminum and a quarter of its copper.

With the current oil price level near US $46 per barrel, China will need an extra US $8.8 billion to be able to satisfy its demand for oil this year. The higher price for oil is cutting into company profits as production costs. The higher costs led to a 5.3 percent increase in inflation last month.

Currently there is a price cap on refined oil products to protect consumers from higher prices for products such as gasoline. However, if the price per barrel of crude oil were to rise beyond $50 per barrel, both producers and consumers would have to bear the burden.


3 posted on 09/02/2004 5:37:16 PM PDT by hedgetrimmer
[ Post Reply | Private Reply | To 1 | View Replies]

To: hedgetrimmer
About time the role of China's oil thirst in the mid east started getting some attention.
It's got to be playing havoc with their low yen policy too.
4 posted on 09/02/2004 5:39:40 PM PDT by mrsmith ("Oyez, oyez! All rise for the Honorable Chief Justice... Hillary Rodham Clinton ")
[ Post Reply | Private Reply | To 1 | View Replies]

To: mrsmith
China is locking up all the oil in the region they can. They already import much of the Yuko oil companies product from Russia, they have been exploring for oil in Japanese territorial seas, they want to build a pipeline through Burma to bring in oil as well. And now:

China, Philippines sign deal on joint survey for oil and gas in South China Sea

China hopes to expand trade with the Philippines, Premier Wen Jiabao told visiting Philippine President Gloria Macapagal Arroyo on Thursday, as major oil companies signed a deal on joint surveying in the South China Sea for oil and natural gas deposits.

In the sixth agreement signed since Arroyo arrived Wednesday, China National Offshore Oil Corp., or CNOOC, and the Philippine National Oil Co. agreed on a three-year joint research project, Philippine Energy Secretary Vincent Perez said in a statement released in Manila.

http://asia.news.yahoo.com/040902/ap/d84rhd000.html
5 posted on 09/02/2004 5:47:11 PM PDT by hedgetrimmer
[ Post Reply | Private Reply | To 4 | View Replies]

To: OldFriend

Why is that?


6 posted on 09/02/2004 5:51:53 PM PDT by hedgetrimmer
[ Post Reply | Private Reply | To 2 | View Replies]

To: TigerLikesRooster

PING


7 posted on 09/02/2004 5:54:00 PM PDT by hedgetrimmer
[ Post Reply | Private Reply | To 1 | View Replies]

To: hedgetrimmer

Don't forget steel and aluminium


8 posted on 09/02/2004 5:56:26 PM PDT by Mikey_1962
[ Post Reply | Private Reply | To 1 | View Replies]

To: Shermy

ping


9 posted on 09/02/2004 6:23:43 PM PDT by marron
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jeff Head
Hey, Jeff.

Where do you think the Chinese can find the oil to fuel their ecomony?

10 posted on 09/02/2004 6:35:47 PM PDT by SC Swamp Fox (Aim small, miss small.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: hedgetrimmer

While I see in the news the danger of China possibly invading Taiwan, I have thought about this for a year now. China is bursting economically requiring massive natural resources she does not have.

We had better move much faster in getting away from oil. The next world war is going to be fought over this like all other wars fought over money, resources and greed.


11 posted on 09/02/2004 7:22:21 PM PDT by iThinkBig
[ Post Reply | Private Reply | To 1 | View Replies]

To: SC Swamp Fox

Bump to read later.


12 posted on 09/02/2004 8:04:43 PM PDT by winodog (JFK is a double minded man, unstable in all his ways)
[ Post Reply | Private Reply | To 10 | View Replies]

To: hedgetrimmer
Re #7

China will be where the next world conflagration originates. It does not control the resouces it needs.

13 posted on 09/02/2004 10:21:17 PM PDT by TigerLikesRooster
[ Post Reply | Private Reply | To 7 | View Replies]

To: SC Swamp Fox; hedgetrimmer

Plenty of LNG deals with Australia.

WESTERN Australia's Pilbara region, with its vast iron ore and natural gas reserves, will be an important contributor to China's booming economy and a significant player in changing international geopolitical dynamics.

http://www.theaustralian.news.com.au/common/story_page/0,5744,10641783%255E643,00.html


14 posted on 09/02/2004 11:29:12 PM PDT by endthematrix (Just watched Passion of the Christ! Wonderful film, wonderful message!)
[ Post Reply | Private Reply | To 10 | View Replies]

To: hedgetrimmer
"In the last decade, China's oil consumption increased by 2.5 million barrels a day, the largest in the world so far," he said. "The U.S. consumption increased by 1.8 million barrels a day. "If China were to use the same per capita consumption as the United States, it would require 80 million barrels of oil a day or more than the entire world uses," Economides said.

Simplistic or rather a conniving approach. He neglects to mention that China does not use as much oil as the US does. Their base point is so much lower than ours, so they can increase without affecting oil prices so substantially
15 posted on 09/03/2004 12:19:23 AM PDT by Cronos (W2K4)
[ Post Reply | Private Reply | To 1 | View Replies]

To: mrsmith

To echo Khruschev's crudities, the Malacca Straits will be the _____ with which one can squeeze China. ANd with India pumping up its navy, and the Russians setting up alliances with India and Vietnam, expect the CHinese to be contained by non-US forces.


16 posted on 09/03/2004 12:22:19 AM PDT by Cronos (W2K4)
[ Post Reply | Private Reply | To 4 | View Replies]

To: SC Swamp Fox
Ultimately, they will do several things...

1) Seek to produce more and more synthetic fuels.
2) Look to better securing sea lanes to the Mid East.
3) Look to Siberia.

17 posted on 09/03/2004 10:34:53 AM PDT by Jeff Head (www.dragonsfuryseries.com)
[ Post Reply | Private Reply | To 10 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson