If I stepped into a time travel machine and turned the dial to the year 2000, made my way to the nearest energy conference, and said the following, I would have been laughed off the conference floor: China will be the world’s biggest importer of oil in 15 years time.
This might have elicited laughter 15 years ago. But it is now about to come true, or it already has come true.
China first imported more oil in a single month than America a couple of years ago. And depending on which statistics you look at or how you calculate imports, China is now about to, or already has, become the world’s largest importer of oil.
First, let’s look at the changes in the relationship between production and consumption in America and China. I’ll do this by plotting the ratio between oil production and consumption from 1965 and today:
In America’s case this a result of two factors. Annual oil consumption has actually fallen by 11% since 2005, while oil production increased by 68% over the same period.
In contrast, China’s oil production has not been able to keep up with its massive growth in consumption. Consumption rose by 63% between 2005 and 2014, but production only rose by 17%.
The stark changes between the two countries are shown when we consider net imports:
In 2005, America’s net imports were four times greater than China’s. Today, they are the same. In fact, the fall in America’s oil imports in the last decade was more or less identical to China’s total imports today.
Now, at this stage I could engage in some confident prediction that America’s net oil imports will follow this trend and go to zero in the next decade, and that China’s oil imports will quickly become greater than America’s ever were.
Instead I will recommend that readers download a copy of Vaclav Smil’s excellent paper explaining our inability to forecast the future of energy, or if you are the book reading type, to get a hold of Dan Gardner’s Future Babble.