China Energy CrisisAs mature economies like the U.S. and Europe sputter postrecession, China has caught the world's attention as an economic power. The country's nearly double-digit growth is the envy -- and the concern -- of the traditional economic powers of the world.

One thing China needs to keep its economy clicking is fuel -- lots and lots of fuel. And for China, that's becoming an increasingly dangerous problem.

China Is Acting Pretty American

As we watch China continue to grow its economy, consider what it means for the country's energy future. China is already reliant on the rest of the world for the power that drives the economy.

We talk a lot about the U.S.'s depending on foreign oil -- rising gas prices, sending money overseas to buy oil, energy security concerns. However, unlike China, our dependence on foreign oil has actually fallen, from 60.3% of consumption in 2005 to 47% of consumption over the past six months.

From being an exporter of oil in 1993, China has headed quickly in the opposite direction and is now more dependent than the U.S. on foreign oil.

And You Thought We Were Dependent on Foreign Oil

In 2004, before the price of oil exploded to $140/barrel, China imported 120 million tons of crude oil, or 40% of its oil consumption. At the time, China knew this was a concern and the director of the Foreign Trade Department of the Ministry of Commerce predicted that China would import less oil and oil products going forward.

Fat chance.

Last year, crude oil imports grew 17.5%, to 4.79 million barrels per day, just over half of what the U.S. imported last year. But that represents a greater percentage of China's consumption than ours. So far this year, China has imported 55.2% of its oil, compared to 40% in 2004 and 47% in the U.S.

While companies like ATP Oil & Gas (ATPG) expand domestic oil supply offshore, and explorers like Kodiak Oil & Gas (KOG) expand oil production on land in the U.S., we become less dependent on foreign oil while China goes the other way.

China's Other Energy Problem

Oil isn't China's only energy concern. Coal provides about 80% of the electricity generated in China and fuels the export machine that is Chinese manufacturing.

It was only 2008 when China became a net importer of coal, but by 2009 it imported 130 million tons, or net, 103 million tons of coal. This year, analysts expect total imports to rise to 180 million metric tons as the economy continues to grow. As we put pressure to reduce reliance on U.S. coal miners like Patriot Coal (PCX) and Walter Energy (WLT), China is picking up the slack by boosting demand for coal.

But even the fast growth of imports probably won't provide enough juice for the country.

China has had problems with blackouts for years, and the problem has recently become more pronounced. When coal prices spiked earlier this year because of flooding in Australia, one of China's major suppliers, power plants refused to generate enough power to supply the country.

In a clash of capitalism and socialism, generators are forced to buy coal at market prices, but are forced to sell the power at utility-regulated prices. When that results in a loss, there's not a huge incentive to keep the generator running.

The blackouts hurt not only Chinese citizens, but also the businesses that are driving economic growth.

No End in Sight

As China's economy grows and more people join the middle class the problem is only going to get worse.

Auto sales grew 32% in 2010, pushing a continued rise in oil demand. General Motors (GM) and Ford (F) have made big investments in the country and are expecting vehicle sales to continue growing at a rapid clip.

As far as coal goes, there doesn't seem to be a great alternative for China right now. It needs electricity to power its manufacturing base and alternatives to coal aren't ready for prime time yet.

The government is making a big push into solar power with a recently adopted feed-in tariff, and set a goal of 50 gigawatts of installation by 2020. The government banks have supported expansion in manufacturers like LDK Solar (LDK) and JA Solar (JASO), but they still don't have enough capacity to make a huge dent in the country's power demands. So the reliance on coal continues.

A Disaster Waiting to Happen

Unless the economy slows or China finds oil and coal reserves domestically, I see this as an increasing problem for the world's second-biggest economy. It's a problem that could cause a domino effect in our increasingly interconnected world.

Motley Fool contributor Travis Hoium owns shares of LDK Solar. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of General Motors and Ford Motor.



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Paul Felix Schott

Now if you put Solar Energy Panels (PV) on your Home roof and car port you can drive

50 to 80 miles each day FREE. Energy From the Sun. Many are doing so all over the Earth.


Electric Cars and Hybrids Cars that run on Electric and some other fuel will soon out

sell all others. With the Help of Solar Energy and People around the Planet getting more

knowledge every day of it on the news and seeing it on more roofs everywhere. Those that

have the intelligence to see the good in Solar Energy are growing every day.


Solar Energy in the next year will out pass most all other forms of energy.


Right today November 22, 2011 under Solar Energy there is 19,000,000 websites and under

Images 1,520,000 for Solar Power plants.


For Coal power plants 1,290,000 under images.


For Hydro Power Plants 3,690,000 websites and 1,5000,000 under images.


Most in the World are re tooling to make Electric Hybrid Cars.


Iran is a Little slow do to its export of crude oil, oil is number one in that country

right behind that is their gas guzzler cars.


Now Israeli is making a Electric Hybrid that you will be able to drive anywhere in Europe

and in one tenth the time it would take to put gas in your car you can drive up and away

with a recharged Battery Pack. Like a cordless drill or Cordless Tool it would take out the

old and put in a recharged one back in in less then a minute in seconds just like the

Cordless Tool. You would pay for only the electric used the battery packs are owned by

the car manufacturer.


No more oil change stations or gas it will be a Battery exchange

station. For those that are driving cross country

the rest will be able to recharge at home or at work. Free from the Sun Energy Solar Energy (PV).


This kind of car is going to but and end for the need of OIL for most world wide very soon.


The Lord's Little Helper
Paul Felix Schott

PS
the photo is of the first of its kind on Earth a Hydrogen / Natural gas Hybrid Car build at NASA by the Top Scientist in the World for Hydrogen. Two of our Nation Best Scientist Dr.Addison Bain and The Patriotic Trumpet Player Monica D. Key Lindbergh 500 support the troops shows in just 3 years.

The day will come when many will use the Sun's Energy from our roof tops through solar panels to split the tap water into Hydrogen and store it in tanks by our home to refill our cars to run on. This system of Solar Hydrogen will run our cars heat our homes and we will cook our food.

November 22 2011 at 5:44 PM Report abuse rate up rate down Reply
usapaydirt

I'm doing everything that I possibly can to reduce their fuel needs , by reading the label on everything I purchase, to insure I don't buy anything made in China, but rather Made in USA first. Once their employees start striking for 15.00 an hour wages in a couple years, then things will begin to slow--!!

August 30 2011 at 1:08 PM Report abuse rate up rate down Reply
John

I wrote about turning off the valves to foreign oil, but the same could be said about other industries as well,,,,,lock the door to foreign cars, and American factories would be hiring again to fill the demand,,,,,,,,lock the door to foreign farmers and the American farmer would be hard pressed to grow enough food to feed us..That is what capatilism is about. Not just the dollar, but about the NATION. People complain every day that they cannot find American goods in stores. Thats because we have sold out to Japan , China, Korea, Mexico...Bring growth and manufacturing back to America and we could once again become the envy of the world rathter than the laughing stock we have become

August 30 2011 at 7:48 AM Report abuse rate up rate down Reply
John

The U S exports more oil than we import,,,,The Alaskan pipeline, built with taxpayer dollars, was never inteded to be used for U S consumption, it was built for Japan and China. We could very quickly get ourselves out of trouble by shutting off the valves going out of the country,and tell the Arab cartel's to keep their oil. If anyone remembers back in the 50's i think it was that the arab cartels nationalized the oil companies? Which is a nice way of saying they STOLE them from the US. We did nothing about it then, and we do nothing about it now, because its all about money. As is always, if you want to know where the root of the problem is? " follow the money"

August 30 2011 at 7:44 AM Report abuse +1 rate up rate down Reply
1 reply to John's comment
Oceana6695

The oil that is pumped out of the ground in Alaska is to costly for us to refine without modernizing our refineries. It's one reason why it gets sold to Japan.

August 30 2011 at 8:52 AM Report abuse rate up rate down Reply
prettyeyes640

Why is it when another country faces a downfall, the U.S. always follow with the words like "it can cause a major problem on us, or it can really hurt the U.S.?" Why is it their downfall always become Our downfall? Can someone please, seriously explain this to me, because it makes no logical sense most of the time. I can understand on some issues, but not all.

August 30 2011 at 3:47 AM Report abuse +1 rate up rate down Reply
Blackledge's

We will probably drill here in on American soil at some point in the future. Not for American cosumption of coarse, but for China's. With all of our debt they have taken on they will want some sort of compensation since our currency is no longer worth what is once was.

August 30 2011 at 2:51 AM Report abuse +3 rate up rate down Reply
1 reply to Blackledge's's comment
oakspondman

Since the US has more oil than all countries combined. When everyone else is depleted, they will have to buy from the US. The government is not telling us the truth about all of the oil this country is sitting on. The government's own surveys prove it. But you will never be told it. Too much money is to be made by not telling the truth to Americans.

August 30 2011 at 6:51 AM Report abuse rate up rate down Reply
Johan

The US relies less on imported oil because of demand destruction caused by the economic downturn, not increases in domestic oil production. US oil production peaked back in the 70s and has been declining ever since.

August 30 2011 at 2:39 AM Report abuse +1 rate up rate down Reply
qaqs9000

Multi-National companies are just not American. They really do not care about America. They might have started here but they only care about profit and could care less where they get their profit. The process of outsourcing to foreign countries is still the norm. Jobs are being created by the thousands by these once American based companies. Those jobs just happen to be far away. America is being flushed and no one wants to stop it or no one has the guts or clout to tackle the issue. There is a cure. Our country has been bought and it is time to put strict laws in place regulating those who buy and sell our senators and congressmen. Stop the corruption or the country will die.

August 30 2011 at 2:27 AM Report abuse +1 rate up rate down Reply
1 reply to qaqs9000's comment
Oceana6695

It's too late...Why should any multi-national company care about 300 million American consumers when they have 3 billion up and coming consumer class in China and India? People yearn for the old days when people had to struggle or die to survive in this land, well, we're here, only there are 300 million of us now, all fighting for the same jobs, resources. True capitalizm has failed.

August 30 2011 at 8:57 AM Report abuse rate up rate down Reply
tony

If the AMERICAN people & the ceo`s of the companys had enough brains & LOYALTY to the USA, We would`nt be even having this conversation. The ceo`s sold us out, they closed plants here and exported our jobs to china. All so they could keep making 40 mill a year. & the so called American people just kept going to wally mart & buying crap. Wake up people, it`s almost too late. THE end is near.

August 30 2011 at 1:31 AM Report abuse +3 rate up rate down Reply
willowowl22

Now are you going to let some water out of the dam you created that changed the worlds axis? Did you offend YOUR mighty maker?

August 30 2011 at 1:17 AM Report abuse rate up rate down Reply