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OIL CRUNCH TIED TO NEW COMPETITORS

Soaring demand for crude oil in China, India and other developing nations has set off a scramble to secure future energy supplies that could undermine the economic and national security of the United States.

The United States, Europe and Japan increasingly will be forced to compete with developing nations, especially China and India, the world's two fastest growing major economies, which have more than a third of the world's population.

"The center of gravity in world oil is shifting," said Daniel Yergin, chairman of Cambridge Energy Research Associates and an author of "The Prize," an award-winning history of oil.

"Last year, Asia consumed more oil than North America," he said.

He predicts an oil supply shift, too, as Africa, Russia and former Soviet republics compete with the Middle East to fill the growing demand for oil.

The developing world's growing appetite for oil is one reason gasoline prices have shot up for Americans. Over time, these emerging economies will also shape not just global oil flows and prices but also world events, said Anne Korin, co-director of the Washington-based Institute for the Analysis of Global Security.

"A third of humanity doesn't want to ride bikes anymore," she said. "That has profound geopolitical implications."

China and India already have moved aggressively to strengthen their relations with two oil-rich countries -- Sudan and Iran -- undermining U.S. sanctions against Sudan's regime and undercutting U.S. efforts to halt Iran's nuclear ambitions.

"We are in a situation right now where the energy consumption of the developing world is having an impact on the foreign policy options of the United States," Korin said.

For now, the United States remains well positioned, at least when it comes to energy supplies. Iraq, where the United States has established a beachhead, has proven oil reserves of between 78 billion and 112 billion barrels.

But political instability, increased terrorism and the spread of fundamentalist Islam make it unlikely that today's oil-production map will look the same 20 years from now.

What's clearly changing is demand. The Paris-based International Energy Agency, a research arm of the world's most developed nations, projected last year that oil demand will grow by 45 million barrels a day to 120 million barrels a day by 2030. More than $3 trillion will be invested to find and produce that oil, and more than half of that investment will serve emerging economies.

The scramble to find and develop new oil fields and natural gas wells will occur in places such as eastern Siberia in Russia and West Africa, as oil-hungry nations hedge their bets if leading producers such as Saudi Arabia or Iraq falter.

"You need energy to develop an economy, so there's a great strategic value in securing energy assets," said Antoine Halff, an oil expert with the risk-management company Eurasia Group.

One likely winner is Russia, along with some of the now independent states that formerly made up the Soviet Union. They have proven reserves of 78 billion barrels, but the U.S. Geological Survey estimates that there may be 171 billion barrels of undiscovered oil in the region.

"Russia is virtually unexplored. Their potential is enormous," said Gary Swindell, an independent petroleum engineer in Dallas.

Africa is another winner. It has 87 billion barrels of proven reserves and estimated undiscovered reserves of 125 billion, mainly in West Africa. Central and South America have roughly the same, but as in Russia, many of the reserves are in prohibitively remote areas.

Elsewhere in the Western Hemisphere, Canada and Mexico should remain the second and third largest U.S. oil suppliers.

In Venezuela, the fourth largest U.S. oil supplier, President Hugo Chavez, a self-described protege of Cuban dictator Fidel Castro, is trying to rewrite concessions to U.S. oil companies and has invited China and India to participate in oil exploration. Ecuador and Colombia are negotiating oil deals with China, too.

China is making heavy diplomatic and energy investments in Africa. It needs to: China is projected to consume within 20 years what the U.S. consumes today -- 21 million barrels a day.

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