Oil

The last “super giant” oilfield (more than 10 billion barrels) was discovered 40 years ago; the last American refinery was built 25 years ago; each successive American “driving season” guzzles more gas than the last.

“China’s growing weight in world consumption virtually assures a heavy long-term impact on energy prices, trade, and investment. In a decade, China has gone from self-sufficiency to being the most dynamic factor in the world oil market and one of the main elements in today’s $40-plus per barrel price,” said the report by Daniel Yergin and Scott Roberts.

Predicting another oil shock, analysts John Westwood Ltd., Canterbury, England, said depleting oil reserves, coupled with growing energy demand, will result in sustained oil price increases, greater capital investment in natural gas production, drastic conservation regulations, and fevered development of renewable energy substitutes funded by “windfall” profits.

There is a growing consensus that the crucial turning point in oil output will probably occur in the second half of this decade, in or around 2007. It will be an energy crisis that will dwarf anything we have ever experienced.

World oil demand will rise the most since 1988 as economic growth accelerates and consumption surges in China, said the International Energy Agency, an adviser to 26 industrialized countries on oil policy.