Scary tales: Oil hunger!

You can argue that the surging price of crude oil is a bubble that will one day pop. Or, you can look at China’s growing energy consumption and conclude that if the world’s tight supply of oil is worrisome right now, the future looks downright frightening.

James Hamilton, professor of economics at the University of California, San Diego, and a blogger at Econbrowser, took the latter approach. He begins by noting that China’s oil consumption has risen at a 7.2 per cent annual compound rate between 1990 and 2006. He then projected this growth rate into the future. He found that if the growth rate were consistent, then China would be consuming about as much oil in 2020 as the United States is today. And by 2030, China would be consuming twice as much oil as the U.S. is today.