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Good Question: How Does China’s Energy Use Affect Us?

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MINNEAPOLIS (WCCO) — Maybe you switch your light bulbs to save energy or drive a more efficient car to save fuel. Yet, 6,000 miles from Minnesota, China’s energy use is exploding. How much control does the United States really have over the costs from energy use?

“I think it’s a really good question,” said Elizabeth Wilson, a policy research fellow at the University of Minnesota’s Institute on the Environment.

For the first time in history, the United States is no longer the world’s largest energy user. Right now, according to the 2010 BP Statistical Review of World Energy,
China uses 20.3% of the world’s energy. The U.S. uses 19%.

“I got back from Shanghai yesterday,” said Wilson, “70 percent of their electricity use goes into the industrial sector, in large part, to make stuff for export that we buy here.”

So, even though China’s energy use is exploding, the United States is impacting that use, according to Wilson.

“All of my kids’ toys, my bike helmet, that’s made in China” is part of this, she said.

Bear in mind, China has more than 4 times the population of the U.S. Americans use far more energy per person, so it’s not like individual improvements here are canceled out by the growth in use in China.

Individual changes in the U.S. make more of an impact than individual changes in China, according to Wilson.

So, what’s driving the growth?

“Development,” said Wilson. “There’s this rapid industrialization.”

“There’s strong development in China. Auto sales had been on a torrid pace because they’re seeing a growing middle class,” said said Russell Price, senior economist for Ameriprise Financial.

• COAL

China uses 48 percent of the world’s coal energy. They’ve even started importing from the United States.

“We have seen some prices for coal elevated, because what’s mined in the United States is being exported to China,” said Price.

If U.S. mined coal “becomes an internationally traded commodity, I think you can expect prices to go up,” said Wilson. That could impact our rates for electricity.

• OIL

The U.S. uses twice as much as China. The U.S. uses 21 percent, China uses 10 percent of the world’s oil, but China’s use is up 10 percent compared to last year.

“I think it’s really interesting to think about and what it means for global supply and demand,” said Wilson.

“Over the past 10 years, global oil use grew at a pace of 1.6 percent. The big difference is that growth in the U.S. accounted for just 12 percent, China accounted for 50 percent of the increase,” said Price.

We may reduce use in the U.S., but as more in China exit poverty and buy cars, oil prices will likely rise, said both Price and Wilson.

“If you want to buy a car in China, you have to win a lottery. Every month, 20,000 winners are allowed to buy a car,” said Wilson, who just returned from a three-week visit to China.

• POLLUTION

As China’s energy use continues to climb (up 11 percent in 2010 compared to the U.S. energy use increase of 3.7 percent) pollution could continue to grow.

“I’ve got the cough,” said Wilson, after her visit to China.

Pollution on the West Coast of the U.S. has been traced to China. The more energy is used there, there’s a potential for more pollution to affect the entire world.

“Long-range pollutant transfer is a really big issue,” said Wilson.

• OVERALL ENERGY SUPPLY

“They probably have another 5 or 10 years of growth. Unless a new renewable energy technology pops up overnight, that is going to create additional pressures on the ability of the world to meet that demand,” said Price.

The good news is that China is also leading the world in use of renewable energy, with tremendous increases in wind energy.

“Hopefully we’ll all continue to buy more efficient vehicles, make our homes more efficient,” said Wilson.

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