Found this via Mish. Interesting bits:

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.

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Voracious energy demand also helps explain why China—which gets most of its electricity from coal, the most polluting of fossil fuels—passed the U.S. in 2007 as the world’s largest emitter of carbon-dioxide emissions and other greenhouse gases.

In the past, being the world’s biggest consumer of fossil fuels went hand in hand with being its dominant economy. The question now is whether this will hold true in the future, as nations compete to develop new ways to produce more wealth with less energy. While China is No. 1 in consumption, the U.S. remains the world’s biggest economy.

Technologies for energy efficiency aren’t exclusive to the US, and efficiency initiatives could further economic growth in China. Remember that China almost produces enough oil for itself, but not quite. It switched from net exporter to net importer and kept running. China’s infrastructure expansion is currently driven by oil, not coal. Those cranes and bulldozers don’t operate off of electricity just yet. This means that China’s growth is now going to be more strongly correlated to swings in the price of oil. High oil prices will be punishing to Chinese expansion. It might also be true that if Chinese expansion slows, there could be downward pressure on the price of oil.

The US still consumes more than double the amount of oil as China. Oil in the US is part of everything. In many ways this is worse than in China. But there’s another, subtle bad way competition for oil can impact the US. Oil in the US is consumed by everyone for everything. Oil in China is predominantly consumed by certain industries. However, there is growth in the consumption of oil on a middle-class, per-capita basis: the growth in Chinese auto demand. If oil goes up in price, Chinese officials can simply choose to allocate oil to construction instead of the growing Chinese auto market. That decision would negatively impact the US automakers. There are probably a dozen similar subtle ripple effects that future Chinese energy policy could have on the US.

Let’s see how the US adapts to someone else becoming the dominant player in such a critical area of consumption.