The mainstream press is abuzz this week with the “news” that the United States, after 100+ years, has now been surpassed as the world’s No. 1 energy consumer. IEA Paris, following the BP Statistical Review in June, has decided to call this race in favor of China. However, this is really not a story of today. Rather, it’s a story of the past decade. Only the confluence of several powerful forces could have delivered China to its current position. The press should have been paying closer attention. Moreover, the real story here is in China’s growth in coal consumption–the energy source China drew upon to first match, and then surpass, the United States.
Let’s take a look first at BP’s data assessment for 2009 energy use, vs. IEA Paris. Our unit of account here is the mtoe–million tons oil equivalent. This is a unit of energy, not volume, and measures BTU. Also, a note: IEA Paris apparently is including Hong Kong in their data so I have added Hong Kong also to mainland China from the BP Statistical Review (which tracks them separately). For 2009, BP has China edging the USA by nearly 19 mtoe, and IEA Paris has China exceeding the USA by a more substantial 82 mtoe. | see below: BP vs IEA Paris: China and USA 2009 Energy Use in MTOE .
What the chart doesn’t tell you is the composition of each country’s energy consumption. While many are aware the US is a heavy user of oil, there is less attention paid to China’s heavy use of coal. Let’s compare the two, shall we? Oil in the US represents nearly 39% of total energy use from all sources. But in China, oil barely represents 19% of total energy use. Most important of all: China’s coal use is four times its oil use.
Whereas in the United States oil demand is not a reflection of strong exports, in China the extraordinary mix of coal to oil use is very much of a reflection of worldwide manufacturing, and global demand for those goods. In other words, China is just a place where the world performs a great deal of its physical labor. Perhaps this is why Beijing is “unhappy” with this week’s media focus on the country’s energy demand. Or, perhaps not. China appears to be refuting the data itself, rather than making the more salient point: much of that coal demand is from you and me, here in the West. China’s coal consumption is merely our own power consumption, offshored. And while the composition of that demand will surely tip in the years ahead to a more domestic focus in China, this is yet another illustration that the world’s demand for energy is still very much satisfied not by oil, but by coal.