America and China in Hot Oil
It�s been a busy week for energy news in the United States. First, the average price of a gallon of unleaded gas in the United States topped $2.60. Then, a barrel of oil flirted with $68, yet another record. And Bush Transportation Secretary Norm Mineta announced minor revisions to the federal CAFE fuel efficiency standards for some light trucks and SUVs.
But the most important development for the long-term health of the American energy market came from China. On Monday, the China National Petroleum Corporation (CNPC) announced it was buying the Canadian firm Petro Kazakhstan for $4.18 billion. Already the number two consumer of oil worldwide, China is on a clear path to compete with the United States for access to supplies in a post-peak oil production environment.
The Chinese move in Central Asia is part of an aggressive global strategy to secure oil and natural gas resources for Beijing�s exploding economy. Beijing has committed $850 million to build oil pipeline, due to open in December, capable of moving 400,000 barrels of crude a day from Kazakhstan to China. In addition, Chinese interests have secured a 60 per cent stake of another major Kazakh oil producer. In Uzbekistan, where the United States will soon be vacating a major air base, CNPC inked a $600-million oil joint venture. The Chinese have also extended $900 million in loans to countries in the Shanghai Cooperation Organization � which includes China, Kazakhstan, Kyrgystan, Russia, Tajikistan and Uzbekistan.
The competition for access to oil is fierce and the stakes are high. As Paul Roberts noted in his book, The End of Oil, competition and conflict over oil resources will become greater still, as the U.S., China, Japan, Western Europe and other nations battle to secure reserves, especially in non-OPEC states (and including U.S. companies like UnoCal). Nothing less than economic growth, prosperity and maintenance of living standards is at stake. And as the Washington Times reported, the Chinese are playing for keeps:
The difficulty for U.S. and other companies is that Chinese firms are willing to overpay for foreign assets, if those purchases will bolster China's clout abroad and help it secure energy resources. In that regard, the companies serve as a platform for Beijing's foreign policy goals, while U.S. firms consider market factors.
Welcome to the future of oil politics. As Kazakhstan's Foreign Minister Kasymzhomart Tokayev put it, "It's very difficult to compete with the Chinese."
The End of Oil is a really important book. It really shows how irrelevant the Bush energy plan is.
This is the first time I can remember this site actually making sense. Maybe you're not just a bunch of hopeless moonbats after all.
the nexus between china, oil and darfur is even more disturbing. with the added cruel irony of having condi and powell as scretry of states, we still stand idly by.
The Darfur situation is a metaphor for the continuing strategy of extremists to reestablish the Caliphate. I've noticed a tendency to write off the president as stupid - While I might joke that he is the antichrist, the following nexus is troubling, the 3 stans used by the US to stage its move into Afganistan and later park in Iraq, are now being courted by the Chinese, and the heavy shift of capital flows to China while Americans cry foul over being made redundant, and why did no Senator stand with Congressional Negro legislators to contest the 2000 election, and how have we been made into sheep slaves to dirty air, dirty water, denuded parks, oil spills - If we are not in charge who are?