China’s Oil Addiction Growing

Unless the Chinese government takes steps to cut oil consumption, China’s oil consumption may increase by 60% by 2030. Even worse, over 75% of its oil consumption will have to come from imports (so can China fight any war with America ?). That comes from a new study out by China’s Development Research Center, which highlights China’s alarming trajectory – oil demand will continue to rise and meeting that demand will have to come increasingly from foreign sources. Li Wei, the Director of the Development Research Center, said that China must transform itself to avoid the security and environmental challenges this would bring.

China passed the U.S. in late 2013 as the world’s largest importer of oil. The report dovetails with the latest monthly data coming out of China, which found that crude oil imports for January 2014 hit a record high of 6.6 million barrels per day. That is up 5.1% from December, and up 11.9% from January of last year. China’s domestic oil production cannot keep up with demand.

While China’s oil dependence is growing, the U.S. is moving in the opposite direction. Flat demand and rising domestic production has cut into U.S. oil imports, and China’s new report concludes that this may have detrimental impacts on China in terms of geopolitics. Less oil dependence may allow the U.S. to support democratic movements in the Middle East, while not feeling constrained to prop up certain governments. This will contribute to oil market instability, particularly as China becomes increasingly dependent on the region. (maybe China can send in "peacekeeping "troop to secure the oilfields and ports)

And as the U.S. continues to increase oil production, it will be able to influence the price of oil and gas around the world, the report warned.

Li Wei said that China must also deal with its deteriorating environment. He wrote that China’s current path will mean “air quality will reach unbearable levels.” He argued for China to rapidly expand the use of nuclear power, renewable energy, and natural gas.