China scrambles to meet skyrocketing energy demand

Standard & Poor's said in a report that the pressure on China for energy will continue to grow over the next two decades, as the Chinese government tries to meet skyrocketing industrial and consumer demand.
According to a Standard & Poor's release, the dramatic economic transformation in China is draining the country's energy reserves, triggering a major hunt overseas for new supplies. This expansion strategy is already helping rattle the global oil markets and straining international relations.

This is also one of the reasons for higher energy prices, which are putting pressure on those companies that use large amounts of energy.
The article, entitled: “Global Oil Markets Buckle Up As China Steps On The Gas”, was published on RatingsDirect, Standard & Poor's Web-based credit analysis system, and is part of a special Standard & Poor's report on the significance of high energy prices in CreditWeek, the investment research leader's weekly magazine on credit risk.

"Helping China to satiate its energy needs without sending the global energy markets into shock will require international cooperation, based on recognition of mutual interests," said Standard & Poor's credit analyst John Bailey.
"Dialogue will be essential on all sides to avoid misunderstandings and to develop large-scale energy projects."

China is now the second-largest oil consumer in the world, after the US. Last year, China guzzled about 314 mm tons of oil, of which it imported 122.7 mm tons. And the momentum is building. China will account for 20 % of the world's incremental energy demand over the next 30 years, according to the International Energy Agency (IEA).
The IEA predicts that China's oil imports will soar from less than two mm bpd now to almost 10 mm in 2030. That will be equivalent to more than 80 % of China's domestic demand for oil.

China's startling increase in car ownership is one factor fuelling its extraordinary growth in oil consumption. The country's growing industrial base is also suckingup fuel fast. The Chinese government sees averting a fuel crisis and boosting supplies as central to national security.
Its initiatives to date have focused on increasing offshore exploration and developing other energy resources, such as natural gas and nuclear power.