Wednesday, July 20, 2005

All the Cars in China 

The point is not to have easy access to Iranian oil. The point is to have control of the spigots in the grim decades of transition from an oil-based economy to whatever comes next. From Robert Dreyfus of TomPaine.com:
Last week, China, Russia and four Central Asian “Stans,” including Uzbekistan, rather impolitely asked the United States to withdraw from Central Asia. That part of the world is a significant oil and gas region, and neither Moscow nor Beijing want the United States to put down roots there. But Central Asia’s oil and gas resources pale next to the Middle East, and that is where America’s imperial presence has set off alarms in Beijing . . . .

A June 24 New York Times article subtly attacked China and its CNOOC oil firm over its bid to buy Unocal, a U.S. oil company with long experience in Asia, calling the intended purchase (in its page-one headline) a “costly quest for energy control.” But if any nation “controls” energy, it is the United States. Buried in the article was this fairly explosive paragraph:
Privately, Chinese officials and analysts say oil is treated as a strategic crisis. They have sounded the alarm about Western and particularly American domination of oil supplies and influence over major oil-exporting nations, including Saudi Arabia and now Iraq, which has made China dependent on what many here refer to as American economic and military hegemony . . . .
So. We went to war in Iraq, “wiping out China’s stakes” in Iraq. And so, Chinese “officials and analysts” call the current situation an oil crisis, says the Times.

Meanwhile, neoconservatives, Bush administration officials, some members of Congress and (unfortunately) a few labor-connected liberals are making a big deal of CNOOC’s Unocal bid. For perspective, let’s recall that Unocal is the company that did more to support the Taliban than any other U.S. entity, courting those Islamic radicals in search of a pipeline, oil and gas deal in central Asia—and hiring various malleable U.S. strategists to support the Taliban on its behalf, including incoming U.S. ambassador to Iraq, Zalmay Khalilzad. It’s hard to imagine anything that China could do with Unocal that would do more damage to U.S. interests than Unocal has already done. Still, the outcry goes on, most recently during a congressional hearing at which Jim Woolsey, the former CIA director, and Frank Gaffney, the neocon-linked military strategist, railed against China. (CNOOC, by the way, is partly owned by Shell Oil, which bought a big chunk of the mostly state-owned firm when it conducted a public stock offering in 2002.)

According to the U.S. Energy Information Administration, road transportation in China will be the driving force for that country’s enormous oil appetite in the next two decades, noting that “the Chinese passenger car market grew tenfold between 1990 and 2000.” By 2025, says EIA, China’s oil demand will reach nearly 13 million barrels of oil per day. (Saudi Arabia’s entire output is only about 8 million barrels a day.) To meet such demand, China is searching everywhere, from Sudan to Venezuela to Central Asia. Iran and China are making oil deals, too. But by invading and occupying Iraq, the United States has pretty much locked up the most easily expanded source of oil in the world; Iraq, which manages to eke out about 2 million barrels a day, can produce six to eight times that much oil if it made sufficient investments in production facilities. Quite a prize, Iraq—if Washington can hold onto it. No wonder various neoconservative world hegemonists consider talk of an Iraq exit strategy to be treasonous.

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