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High-Tech Boost
China's energy needs are huge. That is neither surprising nor new—everyone knows it. Just as everyone knows her stunning growth has caused oil prices to skyrocket: China, which produced 5 percent of the world’s gross domestic product, accounted for 50 percent of the growth in oil consumption over the last several years. Most of the world expects that her growing needs will pressure oil prices—and those of most other commodities—for years to come.
So why write about China and energy? Or better yet, why read about it? Why spend time on something when the conclusions are so apparent? Why not just acknowledge the obvious and try to use less of the stuff? These are reasonable questions—and most of the energy industry has a logical answer: coal and nuclear. Gas and oil are indeed problematic. Other solutions are too expensive. Coal and nuclear, of course, are not problem free: Climate issues for coal, and nuclear opponents who fear accidents, terrorist strikes, and nuclear waste. But look at the alternatives. Sure, wind is growing rapidly, but it is intermittent. “Renewables” (whatever that means) are expensive, small scale, hard to integrate, and in general, favored only for niche markets. Energy conservation and more energy efficiency are good and necessary but not sufficient: They need subsidies to be economic, and they are too difficult to integrate into the grid. Most people think big iron is the answer.
But maybe, just maybe, China will prove them wrong.
In China Shakes the World: A Titan’s Rise and Troubled Future—and the Challenge for America (New York: Houghton Mifflin Co., 2006), James Kynge wrote, “In the 1990s, the question was ‘How would the world affect China?’ Now the real question is: How will China affect the world?”
I spent time in China in the mid-1990s, and it was fascinating, but that last comment is well taken. Back then, China didn’t really affect the rest of the world. Those who were not rushing to do business in China went about their daily lives, except perhaps to marvel at the increasing quality and quantity of goods that it was exporting—and how cheap they were. And maybe in passing some wondered if their own local manufacturing might be affected, perhaps cutting into energy demand growth.
But the power required by all the cheap electronics China exported offset any real concerns about demand growth, and plans for new power plants to supply all that demand ramped up into a major new building cycle.
Read the entire article.
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