Editorial: Oil, Walls & Chinese Windmills
"When the wind of change blows, some build walls, while others build windmills" (Chinese proverb)
October 2013 will see history made: for the first time the Peoples Republic of China will overtake the USA and become the world’s largest net importer of oil.
US production is projected to jump almost 30 per cent from 2011-2014, verging on 13 million barrels per day (bpd) by dint of shale oil, tight oil, and Gulf of Mexico deepwater plays. In the same time period, China’s domestic oil output is estimated to increase by only six per cent while demand is set to grow by 13 per cent to hit 11 million bpd.
As demand continues to outstrip internal supply, The Middle Kingdom’s dependency on external sources will only become more acute and its exposure to oil price volatility more pronounced.
China already derives 60 per cent of its oil from 15 different foreign nations, two of which are classified as "Failed States" and a further six of which are on the warning list.
With China dedicated to spend "whatever it costs" to secure its energy future, expect dragon-themed windmills to pop up from Africa to Australia to the Arctic in a not too distant future….