While we are strangling ourselves. See post below.

China poised to top U.S. as top oil buyer; increased car sales spur jump

China appears to be at a tipping point where surging domestic auto sales will soon drive it past the U.S. and turn it into the world's biggest oil importer, taking a title that distinguished -- and some might say hobbled -- the U.S. for decades.

China already has drawn even with the U.S. on oil imports, with both nations reporting net imports of 6 million barrels a day of crude in December, according to the latest data from the U.S. Energy Information Administration.

"The trend of falling U.S. oil imports and rising Chinese oil demand is moving China closer to passing the United States," said agency head Adam Sieminski, who recently has been closely chronicling China's remarkable rise in world energy markets.

China passed a milestone last year by surpassing the United States as the top oil importer from the Middle East, but oil is not the only fuel China is voraciously consuming these days. The Asian economic giant in recent years became the world's biggest energy consumer overall, taking all sources of fuel into account, and it soon will use more coal than the rest of the world combined, the agency estimates.

China's oil consumption is burgeoning as the result of millions more Chinese acquiring cars each year in what is now the world's biggest and fastest-growing market for automobiles. Chinese auto production reached 16 million units last year, compared with 14.5 million in the U.S., the second-largest auto producer.

With 1.5 billion upwardly mobile citizens, some predict the Chinese market will surge to 25 million vehicles within a short three years.

"It's right at the takeoff stage" as millions of Chinese citizens rise into the middle class and can afford cars, Ford Motor Co. CEO Alan Mulally said last year as he visited Beijing, where Ford and other U.S. automakers have been expanding production. "People really do value the mobility" in China, as everywhere else, he said.

General Motors Co. was one of the first Western automakers to jump into the Chinese market and has been profiting handsomely from its early connections to become the largest foreign automaker there.

"We're taking a longer view of the market and preparing for an industry that should grow to more than 30 million units by the end of the decade," GM CEO Dan Akerson said last year.

Oil demand in China hit a record 10.6 million barrels a day in December and is now more than half the U.S. consumption rate, according to the industry monitoring firm Platts. With predictions of a doubling in auto sales, that could prove to be only the tip of the iceberg for world oil markets, analysts say. Currently only 44 out of 1,000 Chinese citizens owns a car, compared with about 6 out of 10 in the U.S.

Besides having a huge emerging class of first-time drivers, China's factories are also heavy users of oil.

"The evolution of China's energy sector is one of the critical determinants of global energy markets and future greenhouse gas emissions," said Frank V. Maisano, energy specialist at Bracewell & Giuliani. That is why China's rapid ascent is being closely watched by global geostrategists, commodity market analysts and economists alike.

In the meantime, the increasing energy self-sufficiency of the U.S. is due to a combination of persistently high gasoline prices and increasingly strict fuel economy regulations that have cut fuel consumption by about 10 percent since 2005, even as U.S. oil production last year soared to the highest levels in decades in the wake of the shale revolution.

"Higher U.S. oil production means America will need less imported oil," Mr. Sieminski said. His agency is projecting that U.S. imports will fall from a high of 60 percent of consumption in 2005 to 32 percent next year -- the lowest level since 1985. The agency expects U.S. production to keep increasing rapidly through the end of the decade as oil companies exploit lucrative shale plays in North Dakota and Texas, but then fall off as the most prolific fields are depleted.

The flood of fresh crude oil coming out of Midwestern shale projects has depressed the price of crude locally and left refineries in Texas and the Gulf Coast so flush with oil that they can't sell it all in the U.S. They have started exporting some gasoline and other products derived from the crude to South American markets. That also has served to lower U.S. net imports of oil and petroleum products.

The rapid rise in U.S. production is not doing much at present to hold down global crude and gasoline prices, however, which are set on world commodity exchanges in London and New York. The soaring demand for oil in China and other emerging nations is keeping a floor under premium crude prices at about $100 a barrel in London, as supplies remain tight in much of the rest of the world.

Pump prices in the U.S. hit a record for February two weeks ago before declining to $3.71 a gallon on average. The energy agency is predicting that pump prices will stay in the current range through the spring as U.S. refiners gear up for the peak summer driving season, before falling crude prices start to draw gas prices back down again. The agency expects gas prices to average $3.50 in the second half of the year.