Oil expert predicts trouble

China's voracious appetite for new energy will have a dramatic impact on the price Utahns — and all Americans — pay for gasoline, electricity and natural gas in the future.

In fact, China, the world's second largest energy consumer behind the U.S., increased its energy consumption in 2004 by 14 percent, according to Matthew Brown, energy program director for the National Conference of State Legislatures.

"China is going to double its energy consumption in about four to five years," Brown told members of a state legislative committee on Wednesday. "For the first time ever, we as a country are going to be facing competition for our energy supplies. This competition is going to affect our prices in this country."

Brown's forecast joins an array of other voices, who increasingly point to America's shrinking energy reserves and rapidly rising prices.

Andrew Weissman, founder and chairman of Energy Ventures Group LLC, based in Washington, D.C., points to a September 2003 study by the National Petroleum Council, which concluded that North America is fast approaching a time in which it will no longer be self-reliant in meeting its natural gas needs.

"I think we are heading towards an enormous problem," Weissman said. "More often than not in the next decade we will have severe shortages."

That has led to a national campaign by oil companies and the Federal Energy Regulatory Commission to move toward imports of liquefied natural gas, which is treated and cooled to minus-260 degrees Fahrenheit before being transported by ship to large terminals, which convert the liquid back into a gas before it is introduced into the pipeline grid.

Brown refers to a report by BP, the largest producer of natural gas in North America, which projects by 2020 the U.S. will be importing 30 percent of its natural gas.

Today, less than 1 percent of the U.S. natural gas supply comes from LNG, according to Weissman.

"Can we bear the risks that come with heavy reliance on imports?" Brown said. "What environmental risks and regulations are going to effect our use of energy?"

Even with more stringent fuel efficiency standards imposed on automobile manufacturers, Brown said, growth in energy oil consumption will grow dramatically.

By 2015, the U.S. is expected to import 65 percent of its oil needs.

The growing crisis has prompted the Public Utilities and Technology Interim Committee to push for a new state energy policy, defining Utah's strategy in meeting its energy needs.

The committee will spend the rest of this year working on drafting a policy that eventually could be codified.

Sen. Greg Bell, R-Fruit Heights, who is Senate chairman of the committee, said Utah is not in control of its destiny.

"We've been somewhat isolated, therefore benefited from our own supply," Bell said. "The numbers on increasing demand of India and China, it's just overwhelming."

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