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China Biggest Oil Consumer in 2010: BP Report

After decades of sustained growth, China became the world’s largest energy consumer in 2010, overtaking the US, as global carbon dioxide (CO2) emissions rose at their fastest pace in four decades, according to BP, one of the world’s biggest energy companies.

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As China's economy has expanded rapidly, with an average uarterly GDP Growth was 9.31 percent between 1989 and 2010, its energy consumption has also skyrocketed.

The rebound in the global economy helped drive energy consumption around the world at a rate not seen since the aftermath of the 1973 oil price shocks.

This is not without side effects.

The impact of fossil fuel consumption on the environment has also grown.

BP falsetruefalsetruefalsetruefalsetruefalsetrue suggests that CO2 emissions from energy use rose at their fastest pace since 1969. China's CO2 emissions rose by 10.4 percent, according to the report, as the number of factories, flights, and cars grew.

The Kyoto Protocol will expire next year, and UN talks look unlikely to agree on a legally binding deal to curb emissions and fight climate change before it runs out.

Developed and developing economies both grew at above-average rates, according to the 60th annual BP Statistical Review of World Energy.

“There were both structural and cyclical factors at work,” said Bob Dudley, BP Chief Executive, who took over from Tony Hayward in the wake of the Gulf of Mexico disaster.

“The cyclical factor is reflected in the fact that industrial production rebounded very sharply as the world recovered from the global downturn. Structurally, the increase reflects the continuing rapid economic growth in the developing world.”

He added: “I was in China a couple of weeks ago and I came away with a very clear sense of how rigorously China is thinking about these issues. Growth is by no means the only game in town. They want to maintain social cohesion and they want to make their growth more sustainable. In sum, they are worried about energy security and climate change – just as we are.”

Dudley believes that to address these concerns “we can look to the markets, policy tools, technology advances and not least to the growth of renewable energies”.

“This year, we have seen that the global energy markets are resilient,” he continued. “In the face of significant disruptions to the world’s energy system in Japan and Libya, demand continues to be satisfied. Markets work and markets work best when they are open and transparent.”

The growth in energy consumption reached 5.6 percent in 2010, the highest rate since 1973, with total consumption of energy easily surpassing the pre-recession peak reached in 2008.

It increased strongly for all forms of energy and in all regions, but more strongly in developing countries.

“Economic growth was led by the non-OECD economies which had suffered least during the crisis. By year-end, economic activity for the world as a whole exceeded pre-crisis levels driven by the so-called developing world,” said Christof Rühl, BP’s group chief economist.

“Energy intensity – the amount of energy used for one unit of GDP – grew at the fastest rate since 1970. And so, when all the accounting is done, planet Earth – we all – consumed more energy in 2010 than ever before,” said Rühl.

Demand in OECD countries grew by 3.5 percent, the strongest growth rate since 1984, as the price of oil stayed in the $70-80 range for much of the year, following the record price of $147 per barrel in 2008.

Oil remains the world’s leading fuel, at 33.6 percent of global energy consumption, which should cheer the OPEC nations meeting Wednesday. It continued to lose market share for the 11th consecutive year, with natural gas and renewables making small gains.

Biofuels production grew by 13.8 percent, while renewables in power generation, such as wind, solar, geothermal energy and commercial biomass, grew by 15.5 percent. The growth in use of renewables came mainly from OECD countries, with China, the second highest consumer of renewable fuel after the US, a notable exception.