Natural Resources Play a Vital Role in Economy, Conflicts, Everything
Rising U.S. & Chinese Oil Dependence: Time for Cooperation, Not Confrontation
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The U.S. and China are both now scouring the globe to secure access to remaining oil reserves to meet rapidly rising domestic oil demand. Growth in oil demand in the U.S. and China combined accounted for about half of the global increase in demand in 2004, according to the Worldwatch Institute (Vital Signs 2005).
China has become the second largest oil consuming country after the U.S. (6.6 million and 20.5 million barrels per day in 2004, respectively). Chinese oil imports increased sharply from 2003 to 2004, accounting for over 40 percent of its consumption (compared to almost 60 percent foreign imports for the U.S.). By 2025, China is expected to need to import 75 percent of its oil; the U.S., 70 percent.
China is still far behind the U.S. in total oil consumption. The U.S., with less than 5 percent of the world’s population, consumes about 25 percent of global oil production, while China, with about 22 percent of the world’s population, consumes only about 8 percent. But, if current trends continue, China is expected to surpass the U.S. within a few decades.
More Cars, More Oil Demand
Much of China’s rising oil demand is driven by the rapid growth of its auto industry. The Economist reports that demand for new cars in China is expected to keep growing by 10 percent to 20 percent per year for the next several years after growing at an even faster pace over the past three years. Five million new cars were sold in China last year, making China the third largest car market after the U.S. (17 million) and Japan (5.9 million). Producers expect the Chinese auto market to surpass the U.S. within the next 10 years. With a growing middle class of more than 450 million, China has become the hottest market for the global auto industry.
With only 10 million private cars on the road, China still has a long way to go to catch up with the U.S., but already cars are consuming one-third of China’s oil. New expressways are paving over scarce prime agricultural farm lands, and smog from cars is contributing increasingly to already poor urban air quality. (Economist, 6/4/05)
Growing U.S. and Chinese oil dependence has put our two countries on a collision course. What happens if China develops and deploys the capacity to militarily defend its foreign oil reserves, pipelines, and sea lanes? What happens when China starts intervening in the internal affairs of oil-rich developing countries to preserve its oil interests? What happens when there are 500 million oil-burning vehicles on China’s highways spewing millions more tons of greenhouse gases into the atmosphere? Competition over oil could lead our two countries to a nuclear confrontation.
No Need for Conflict Over Oil
Yet, there is no need for a conflict over oil if both countries recognize compelling security, economic, and environmental reasons to reduce oil dependence. Dependence on foreign oil constrains both countries’ foreign policy choices and exposes their oil supplies to increasing political risk. Oil imports consume scarce foreign exchange reserves that both could put to better use domestically. Both countries have significant domestic sources of renewable energy that have yet to be exploited. Affordable technologies exist now that can dramatically reduce the oil-intensity of both economies, and emerging technologies on the horizon hold promise for even greater reductions. Both countries are highly vulnerable to the possible impacts of global warming, which will only intensify if the U.S. and China continue along their current energy development paths.
The U.S. needs to dramatically reduce its oil consumption, and China needs to leapfrog beyond oil dependence in its economic development. The world can neither afford continued wasteful and excessive U.S. per capita consumption of oil nor a China that follows the U.S. model of an oil and car dependent economy. Together, we must find a better way. U.S.-China cooperation to reduce oil dependence can create security for the people of both countries and help to restore the earth.
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