Who is now the biggest energy user on the planet?
Not the United States anymore. The U.S. economy is now No. 2, according to the International Energy Agency.
In 2009 China took over the No. 1 spot consuming 2.25 billion metric tons of oil equivalent. The U.S. consumed just 2.17 billion metric tons. (The actual energy consumed was in the form of oil coal, natural gas, nuclear, and alternatives such as wind and solar.)
Chinese officials have disputed the International Energy Agency numbers. The IEA’s data are “not very credible,” Zhou Xi’an, head of the National Energy Administration’s general office, told a press briefing in Beijing on July 20. “We think that’s because of a lack of knowledge about China, especially about China’s latest developments of energy conservation and renewable energy.” China plans to spend $740 billion in the next ten years developing cleaner sources of energy to reduce emissions from burning oil and coal.
Of course, using alternative rather than conventional sources has nothing to do with how much energy China consumes—just with its sources (and how much carbon the country emits in producing the energy it needs.)
The case for believing the International Energy Agency numbers are pointed in the right direction are China’s runaway economic growth (compared to the United States) and the relative inefficient use of energy by China’s economy (even in comparison to the notoriously energy inefficient U.S. economy.)
China’s economy grew by 8.7% in 2009 before accelerating to 11.9% in the first quarter of 2010 and 10.3% in the second quarter. The U.S. economy contracted by 2.4% in 2009. First quarter 2010 growth was 2.7% in the United States.
And even though the United States lacks a meaningful national energy conservation policy higher energy prices have prompted an increase in U.S. energy efficiency of 2.5% annually from 2000 through 2009. In the same period China’s energy efficiency grew by just 1.7% annually. (Energy efficiency is a measure of how much energy an economy uses per unit of production.)
The big effects of China’s move to No. 1 will be, first, to increase pressure on energy supplies in general. For example, China’s oil imports have almost doubled since 2005.
And second, to increase pressure on the supply of the kinds of energy commodities that China’s economy uses most heavily.
For instance, while the United States remains the world’s largest consumer of oil (843 million metric tons in 2009 to China’s 405 million), China far outstrips the United States in coal consumption. In 009 China burnt 1.54 billion metric tons of coal compared to 498 million tons in the United States.
yx,
Yet another reason I feel good about my GLD holding. 😉
Ed:
I think this will cause a Chinese retail gold rush.
http://www.reuters.com/article/idUSTRE6743ZF20100805
Much like beauty, economic measures are in the eye of the beholder. However, I don’t think any of us can argue with the macro trend.
Using th measure of energy effenciency as $ of energy consumed / $ of production, is a poor measue. Manufacturing is a high user of energy, so if manufacturing is shut down domestically but the consumption of the same manufactured goods remain constant. Then the energy effciency is improved by this measure. But in reality this “improvement” is not a good thing. If the production is moved to a less energy efficent location the global energy consumption is increased. And for the USA we have lost good paying jobs, increased our import/export balance, and turned a group of manufacturing employees into burger flippers.
The point of this comment is that the economest measure of “energy efficency” is a simplified gross measure that is subject to lead one down the wrong path. This measure may be useful but it can not be taken at face value. This i think is true of many economic measures.
If I have miss stated this measure please advise.