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steve99

Interesting Slant On Inflation And Energy

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The Chinese just announced that their April oil imports were 23 percent higher than last April’s.

Wow.

That means that if the trend continues this year and next, China will be using twice as much oil in 2009 than it did in 2006. :o

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The Chinese just announced that their April oil imports were 23 percent higher than last April’s.

Wow.

China's energy consumption is growing rapidly, in line with their rapid industrialisation. As this article states, China's Daqing field (one of the world's 4 most productive fields) is now in decline...and it's extremely hard to replace ageing giant oilfields as new discoveries trend steadily lower as the (oil) province matures: The Cheap Oil Mirage

I don't think China's consumption is growing at 23% year on year but 8 to 10% would not be out of the question given the pace of change there. China's oil production is expected to peak around now (ASPO forecast) and import increases would thus trend above 10%. I suspect the '23%' growth quoted is due to their building up a strategic petroleum reserve as they are doubtless aware that supply constraints will increase over time. Incidentally China has also become a coal importer recently, despite their often quoted vast reserves.

The fact that oil production is peaking around now (or peaked in 2005 as per OP's reference and some opinion detailed on the Oil Drum and elsewhere) should not come as a surprise to anyone who has looked closely at the numbers. The key reference point to watch is the discovery trend - in US lower 48 discoveries peaked in 1930 followed by production peak in 1970. UK North Sea dates were 1973 and 1999 respectively; the shorter period between peak discovery and peak production v US lower 48 was due to extensive application of new oilfield technology in N Sea virtually from inception - the earlier / much faster extraction is great for the oil co's and Gov't tax receipts but leads to early and steep declines....as we've been seeing for past 7 years.

As for global oil discoveries - they peaked in 1964 and we are now consuming over 4 bbls for each 1 bbl discovered. Politicians and industry still don't seem to 'get it'....they should do the maths.

Edited by zceb90

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