(Dow Jones) China has passed the U.S. to become the world's biggest energy consumer, according to new data from the International Energy Agency, a milestone that reflects both China's decades-long burst of economic growth and its rapidly expanding clout as an industrial giant.
China's ascent marks "a new age in the history of energy," IEA chief economist Fatih Birol said in an interview. The country's surging appetite has transformed global energy markets and propped up prices of oil and coal in recent years, and its continued growth stands to have long-term implications for U.S. energy security.
The Paris-based IEA, energy advisor to most of the world's biggest economies, said China consumed 2.252 billion tons of oil equivalent last year, about 4% more than the U.S., which burned through 2.170 billion tons of oil equivalent. The oil-equivalent metric represents all forms of energy consumed, including crude oil, nuclear power, coal, natural gas and renewable sources such as hydropower.
The U.S. had been the globe's biggest overall energy user since the early 1900s, Birol said.
China overtook it at breakneck pace. China's total energy consumption was just half that of the U.S. 10 years ago, but in many of the years since, China saw annual double-digit growth rates. It had been expected to pass the U.S. about five years from now, but took the top position earlier because the global recession hit the U.S. more severely, slowing American industrial activity and energy use.
China's economic rise has required enormous amounts of energy-especially since much of the past decade's growth was fueled not by consumer demand, as in the U.S., but from energy-intense heavy industry and infrastructure building.
China's growing energy demands will present new challenges to U.S. foreign policy, as well as to international efforts to reduce emissions of greenhouse gases linked to climate change. China National Petroleum Co., the country's biggest oil company, is pushing forward with oil and gas projects in Iran, despite U.S. efforts to enforce sanctions against the Tehran government.
Beijing has refused to agree to cap its overall growth in its consumption of fossil fuels, or reduce its emissions of carbon dioxide and other greenhouse gases. That frustrated President Barack Obama's efforts to forge an international climate agreement at a United Nations summit in Copenhagen last December.
China instead set a target to reduce emissions intensity -- the amount of carbon dioxide emitted per unit of gross domestic product -- by 40% to 45% from 2005 levels by 2020. That meant China was agreeing to make its economy more energy efficient -- boosting its competitiveness -- but not to consume less energy overall.
China's growth has transformed global energy markets and sustained higher prices for everything from oil to uranium and other natural resources that the country has been consuming. Once, China was a major exporter of both oil and coal. Its increasing reliance on imports has sustained higher energy prices worldwide and underpinned a natural-resource boom in Africa, the Middle East and Australia.