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Page added on March 16, 2013
China poised to top U.S. as top oil buyer
China appears to be at a tipping point where surging domestic auto sales will soon drive it past the U.S. and turn it into the world’s biggest oil importer, taking a title that distinguished — and some might say hobbled — the U.S. for decades.
China already has drawn even with the U.S. on oil imports, with both nations reporting net imports of 6 million barrels a day of crude in December, according to the latest data from the U.S. Energy Information Administration.
“The trend of falling U.S. oil imports and rising Chinese oil demand is moving China closer to passing the United States,” said agency head Adam Sieminski, who recently has been closely chronicling China’s remarkable rise in world energy markets.
China passed a milestone last year by surpassing the United States as the top oil importer from the Middle East, but oil is not the only fuel China is voraciously consuming these days. The Asian economic giant in recent years became the world’s biggest energy consumer overall, taking all sources of fuel into account, and it soon will use more coal than the rest of the world combined, the agency estimates.
China’s oil consumption is burgeoning as the result of millions more Chinese acquiring cars each year in what is now the world’s biggest and fastest-growing market for automobiles. Chinese auto production reached 16 million units last year, compared with 14.5 million in the U.S., the second-largest auto producer.
With 1.5 billion upwardly mobile citizens, some predict the Chinese market will surge to 25 million vehicles within a short three years.
“It’s right at the takeoff stage” as millions of Chinese citizens rise into the middle class and can afford cars, Ford Motor Co. CEO Alan Mulally said last year as he visited Beijing, where Ford and other U.S. automakers have been expanding production. “People really do value the mobility” in China, as everywhere else, he said.
General Motors Co. was one of the first Western automakers to jump into the Chinese market and has been profiting handsomely from its early connections to become the largest foreign automaker there.
“We’re taking a longer view of the market and preparing for an industry that should grow to more than 30 million units by the end of the decade,” GM CEO Dan Akerson said last year.
Oil demand in China hit a record 10.6 million barrels a day in December and is now more than half the U.S. consumption rate, according to the industry monitoring firm Platts. With predictions of a doubling in auto sales, that could prove to be only the tip of the iceberg for world oil markets, analysts say. Currently only 44 out of 1,000 Chinese citizens owns a car, compared with about 6 out of 10 in the U.S.
Besides having a huge emerging class of first-time drivers, China’s factories are also heavy users of oil.
“The evolution of China’s energy sector is one of the critical determinants of global energy markets and future greenhouse gas emissions,” said Frank V. Maisano, energy specialist at Bracewell & Giuliani. That is why China’s rapid ascent is being closely watched by global geostrategists, commodity market analysts and economists alike.
In the meantime, the increasing energy self-sufficiency of the U.S. is due to a combination of persistently high gasoline prices and increasingly strict fuel economy regulations that have cut fuel consumption by about 10 percent since 2005, even as U.S. oil production last year soared to the highest levels in decades in the wake of the shale revolution.
“Higher U.S. oil production means America will need less imported oil,” Mr. Sieminski said. His agency is projecting that U.S. imports will fall from a high of 60 percent of consumption in 2005 to 32 percent next year — the lowest level since 1985. The agency expects U.S. production to keep increasing rapidly through the end of the decade as oil companies exploit lucrative shale plays in North Dakota and Texas, but then fall off as the most prolific fields are depleted.
The flood of fresh crude oil coming out of Midwestern shale projects has depressed the price of crude locally and left refineries in Texas and the Gulf Coast so flush with oil that they can’t sell it all in the U.S. They have started exporting some gasoline and other products derived from the crude to South American markets. That also has served to lower U.S. net imports of oil and petroleum products.
9 Comments on "China poised to top U.S. as top oil buyer"
BillT on Sat, 16th Mar 2013 12:44 pm
What a piece of Washington propaganda!
Per capita, the US still uses more energy than China. And the BS about high gasoline prices is ridiculous. The only countries with cheaper gas are the oil exporters that use it to keep their citizens happy. When they start to compare China and the US on a per capita basis is when the Us has collapsed and China will truly be ahead. They have 4 times the people and make all of the West’s crap so they will use more energy and make more pollution until we stop buying it.
Kenz300 on Sat, 16th Mar 2013 1:52 pm
The era of cheap oil is over…..
China and India are the driving force in oil prices with their growing demand from their billion plus populations. Their 6-8% GDP growth requires more energy to support that growth.
How China responds to their ever increasing need for imported energy will determine the future of Climate Change. As wind, solar, wave energy and geothermal become more cost competitive with fossil fuels there is more incentive to change.Renewable energy outpaces fossil fuel and nuclear growth
People in China have begun to complain about pollution levels and the need for stronger environmental protections. China is prioritizing an adoption of alternative energy sources and is offering subsidies for electric and hybrid vehicles.
Both China and India have an opportunity to move to new technology and reduce their reliance on fossil fuels. The 5 year plan indicates they are starting to move in that direction. Will it be too little and too late to slow the impact of Climate Change?
Renewable energy outpaces fossil fuel and nuclear growth
http://www.renewableenergyfocus.com/view/23051/renewable-energy-outpaces-fossil-fuel-and-nuclear-growth/
DC on Sat, 16th Mar 2013 3:17 pm
Haha if US imports fall to 32%, then that would mean there is a full-blown ultra-depression going on down there and almost nothing is moving.
Kenz300 on Sat, 16th Mar 2013 6:30 pm
Oil imports are declining and will continue to do so.
Oil production is up and it is continuing to rise….
Energy efficiency has increased and continues to go higher each year. 40 MPG is common today in auto show rooms. Gone are the days of the 8 MPG gas guzzlers.
Biofuels now make up over 10% of transportation fuels and second generation biofuels made from algae, cellulose and waste are now being produced.
Electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles are all being sold today in increasing numbers reducing the monopoly that oil has on transportation fuels. That is a good thing. We need competition at the pump.
Long haul truckers are moving to LNG and saving money.
FedEx, UPS, Staples, USPS, Walmart and Waste Management are updating their fleets with a combination of electric, flex-fuel, hybrid, CNG and LNG fueled vehicles.
We have begun to diversify our energy sources and types used for transportation and that is good for the consumer and good for the country.
DC on Sat, 16th Mar 2013 7:32 pm
Hey Ken, when I look out the window, I dont see *any* of those things happening, and neither do you. The UPS truck that delivers stuff where I work-its gas ok? Every single vehicle I see whizzing by on the highway to do there mindless consuming are also-gas powered. The WM garbage truck that picks up the bins about 10 feet from our shops front door-diesel. There might be the odd hybrid out there, but they are only slightly less dirty than the 12mpg crud-boxes, hybrids are mostly about liberal guilt.
There are NO plans private or public to support any the infrastructure you mention, and even if there was, every single ‘alternative’ your pineing for is also a disaster in the making.
Lastly, there are are NO mom-and pop energy corporations run out there garages offering anything like competition. The same corporations control energy as did when I was a kid. Esso, Chevron, Shell-all still there, and NO one has joined them, No one…
The electricity and NG provider are also, exactly the same as they were the day I was born. And the prices they charge only go in one direction-guess which that is Ken?
Ill give you a hint:
Opposite of down
Before I was in high school, we all heard the talk about Electric this, or hydro-whatever, flying cars, by the 80’s then 90’s, then 00’s. Guess what, none of it has to come pass, which is just as well since the replacements are un-mitigated distasters in there own right.
Here I sit, decades later choking on the exhaust of an ever-increasing horde of gas-burners as I ride my bike to get food-or to work. Along my non-existent bike paths(which is a painted line actually, 2 feet from 5000pd murder machines that could snuff me out in a millisecond if there attention wavers even slighty.)
We havent even managed to build cleaner or more efficient gas-shyt boxes due to corporate corruption and foot-dragging. If anything, Ive seen more fuel-efficient models disappear form the market, as opposed to joining it over the years.
That is the world we actually live in Ken…..
Dmyers on Sat, 16th Mar 2013 10:46 pm
Good points, DC. We can’t get there from here without building a road from here to there. Building a road is always difficult and expensive. I don’t know whether I’m channeling Confucius or a Chinese fortune cookie writer, but these simple truths seem to apply.
In time, necessity may drive us to this effort, on the belief it will return us to better times. Right before that moment of necessity, we’ll hear a cry from the people: “Where’s all the oil they promised?!!”
Soon, another cry will rise up: “Build it! Build the way to renewables! Any price! Any sacrifice! Toasters and hot showers! Corn fuel and moonshine!”
At that point, we won’t have the resources to build anything, even a way BACK to the future Kenz advocates.
For many years, the United States stood nearly alone on the stage of energy consumption. One reason energy was cheap, no one else had anything to do with it. The fact that China and other nations are stepping up for their part of the action is a major shift in the global equilibrium, from which we will be reeling for years to come.
BillT on Sun, 17th Mar 2013 2:29 am
And Asia DOES get more bang for their oil buck. Here in the Philippines, it is common to see a motor bike with 2-3 people on it, or a motor-trike with 3-4 people. Jeepneys carry 10-15 and are stretched jeeps. You see very few SUVs with only one person in it and it is probably owned by the government. Goods move by pushed hand carts or small pickup sized trucks. Busses are always full. Streets are cleaned by hand. Conservation is the rule here, not the exception. And gas has hovered around $5 per gallon for the last 5 years I have been here.
GregT on Sun, 17th Mar 2013 5:33 am
Kenz,
Hoping and pretending that something is real, does not make it so.
Welch on Mon, 18th Mar 2013 10:35 am
I like your positive attitude Kenz. Glass half full kinda guy. Good on ya.