Kicking the habit, all over the world

PRESIDENT BUSH was right to say that the United States is “addicted to oil” in his State of the Union address. For too long we have been consuming ever-greater quantities of the stuff without paying heed to the political, economic and environmental hazards involved. Bush also made some useful, if timid, suggestions on how to curb our insatiable thirst for oil. But he failed to address a critical aspect of the problem: Other countries, including China and India, are just as addicted to oil, and unless we strive to suppress their appetites along with our own, the problems we face will continue to multiply.

For decades, the United States has been the world’s leading consumer of petroleum, devouring about one-fourth of the global supply daily. Although higher gasoline prices have weakened demand slightly, we are still expected to consume 27% more oil in 2025 than we do today, according to the latest Department of Energy projections. But an even greater increase in demand is expected from Asia. China’s oil consumption is expected to rise by 97% between 2004 and 2025, and India’s by 78%. The resulting demand crunch could easily overwhelm the global supply of petroleum.

In the U.S., oil demand is largely spurred by Americans’ collective love affair with the automobile. We also own far more vehicles, on a per-capita basis, than any other large nation. But all indications are that Chinese and Indian consumers are beginning to emulate us: In 2001, 16 million Chinese owned private cars; by 2020, the number is expected to hit 130 million; India’s ownership rate is expected to grow just as fast.

The rising demand for oil in rapidly developing countries has enormous implications for the United States. To begin with, it is driving up energy prices for American consumers. With global petroleum supplies tighter than they have been in decades, and China and India competing with the U.S. for available supplies, the price is bound to rise. A year ago, the Energy Department was predicting that oil prices would hover in the $30 to $35 a barrel range over the next 20 years; now it is projecting $50 to $55 a barrel for that same period. Some energy analysts expect prices to climb even higher, especially if China’s economy continues to grow at 10% a year and the global supply of oil fails to keep pace.

LA Times