China Will Likely Pay Heavily for Energy Growth


During the previous calendar year, the energy market was the stage for $30 billion worth of deals involving Chinese oil and natural gas producers. A growing population, which has been accumulating a greater level of prosperity and spending power, will be the driving force behind the growth in demand that has deemed these deals necessary. Due to the current lack of energy production relative to internal demands, China has been forced into a precarious position.

The country resembles the United States many years back when we placed our fate in the Middle East's hands. Saudi Arabia alone now ships over 1 million barrels per day to the Chinese people. Add several other OPEC nations to this equation, and China has supplanted the U.S. in the lead role of being overly dependent -- of course, our newfound production boom has helped us slip from the Middle East's grasp as well. Because China's demand is only expected to continue rising, increasing its domestic production will soon become a necessity.

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