Chinese and US oil thirst, economics, and global warming

Trust me, these threads all tie together.

How?

Yesterday, the International Energy Agency reported that American oil demand grew at a higher rate in 2013 than Chinese oil demand.

It seems to be in part an American economic speed-up, primarily in the production of petrochemicals. It was the first time since 1999 that a US rate increase outstripped China. And, China's growth rate was the weakest in six years.

So, is the Chinese bubble starting to deflate? What's up there? Economists have speculated about that possibility for a full year or more, but, interestingly, I didn't see it mentioned in any news reports about the IEA story.

And, apparently some sort of slowdown is happening. A Chinese factory index has contracted for the first time in six months (which means there was a contraction in the middle of last year).

The US? This is due to increased production, not more car driving. The production is primarily in refined gasoline and diesel, more and more of it being exported, followed by petrochemicals.

It will be interesting to see how "energy security" hawks fight it out with oil producers wanting to now have the green light to export unrefined crude, even though the IEA says any surge in US production will be short lived.

Probably because, especially with naturla gas, and somewhat with oil, fracking tends to increase rate of production even more than it tends to increase overall production.

So, the world's new love affair with fracking, based on gas production increases and jobs alike, as detailed here, could have long-term climate implications.

On the natural gas side, it's guaranteed to further crowd out renewable energy as well as coal. (Even in the US, a fair chunk of the increase in renewable energy has been from hydroelectric, not solar or wind.)

And, thus, at the point when natural gas prices go back up, unless fracking delivers major, major amounts of gas, coal will become tempting again, and renewables won't have had that much more development. In short, fracking might deliver little more than 20 years of running in place on greenhouse gases.

Plus, even in the US, it's not clear if casing on wells is sealed tight enough, if valves and pipelines are built well enough, to keep gas leakage below a rate where natural gas for electricity actually becomes worse than coal-fired power plants. Since China's already demonstrated its capacity for shoddy energy, it's growing interest in fracking to replace coal should thus be little reason for huzzahs and handsprings.

That's not even to mention a fracking-based gas boom fueling a new explosion of demand for cheap plastic products.