Thursday, February 17, 2005
China and Oil Prices
Interestingly, the BBC article neglected to mention how much oil China uses these days. Google turned up a Bloomberg piece on world oil consumption, dated yesterday. According to it, China is now the world's #2 consumer of oil, having passed Japan, but behind the United States. China currently uses 8% of the world's oil, the U.S. is at 25%. But this Sept. '04 article from the People's Daily Online puts China's oil usage at 16% of world totals. Whatever the number, China's oil consumption is significant, and it will only increase in the years to come.
China also has worsening air and water pollution (7 of the world's 10 most polluted cities are in China). This is sure to continue as they try to sustain their 9.5% economic growth. And buried deep in the BBC article is this interesting nugget:
"The Kyoto Protocol considers China a developing nation, and it is currently exempt from cutting greenhouse gas emissions."
The Democratic Party, and environmentalists in particular, have cited George W. Bush's unwillingness to sign the Kyoto Treaty as a primary reason for the rest of the world (supposedly) hating us so much. If only Bush wasn't so arrogant! If only Bush had reached out to the community of nations, then the French would like us, and Muslim extremists wouldn't be flying planes into buildings! Utter nonsense.
If the Chinese are exempt from a treaty that would clearly put the United States at an economic disadvantage, then George W. Bush did the right thing in not signing. The Kyoto Protocol is not about saving the environment, it is about slowing down the U.S. economy.
That being said, we still need to look at conservation and alternative energy sources. In terms of alternative sources, noting should be off the table (COUGHnuclearCOUGH) The basic economics of supply and demand suggest that oil prices will continue to rise as demand increases and production remains relatively constant at 84 million barrels per day worldwide.