In 1993 China became a net oil importer, and has since then probed the globe in a frenetic quest to draw sufficient of it to fuel its ever thirsty industrialisation programme, which aims to pull the majority of Chinese out of poverty. Fuel, therefore, is the only brake that will be applied to this accelerating vehicle, not CO2 emissions nor any other political rhetoric, which may be perceived as a prerogative of the rich, e.g. Kyoto. However, China's search for oil has rubbed Washington up the wrong way, in particular its preparedness to deal with perceived rogue regimes, such as Iran and Sudan, simply because it wants their oil. Iran it should be remembered is the world's third largest oil producer, after Saudi and Russia. Now, China may be about to bring angst closer to the U.S. homeland, by training its sights on a new oil domain, namely the western hemisphere.
Recently, Chinese state owned oil companies have been exploring extensive oil deals with Canada, who are now the main supplier of oil to the U.S. One of China's largest oil companies, Sinopec, wants to buy stakes in the Alberta oilsands, and the Canadian giant Enbridge is forging ahead with a plan to construct a pipeline at a cost of $2.5 billion to bring oil from Alberta to the coast of British Columbia, where it can be shipped across the Pacific to China. Although these putative deals remain on the drawing board, it must be a source of concern to Washington
that, as world oil supplies dwindle and tar-sand oil becomes economically viable, the U.S. will not keep a monopoly hold on such an increasingly precious resource. One might wonder in this oil-drying world why SUV's (4 by 4's we call them over here) that only do 4 miles to the gallon are so popular in the U.S. It doesn't make sense, but perhaps while Washington are concerned, at least for the future, while there is money to be made now, nothing will change very much.
Another hammer blow on the warning gong came recently from Venezuela, who are America's fourth largest oil provider. In his visit to Beijing, President Hugo Chavez signed new agreements that will allow Chinese companies to explore for oil and gas in Venezuela, and to set up refineries to process anything they do find there. This is a deliberate policy, as President Chavez has stated that he wishes to reduce his country's dependence on selling oil to the U.S., as he put it: "We have been producing and exporting oil for more than 100 years but they have been years of dependence on the United States. Now we are free and we make our resources available to the great country of China".
Now this is not good news in terms of world stability. As U.S. oil imports are expected to surge by 70% over the next 20 years in consequence of a combination of reduced domestic oil production (U.S. oil "peaked" in about 1970) and rising demand, the U.S. really can't afford to lose resource from these two countries, Canada and Venezuela, which together supply about a third of its imported oil. More saliently, China is even considering bidding for U.S. oil companies: according to the Financial Times, China National Offshore Oil Corp., which is the country's third largest oil and gas dealer, is looking at making a $13 billion bid on Unocal, America's ninth largest oil company. As this could be the thin end of the wedge, I envisage some governmental constraints being imposed "back home" in the U.S., as surely no elected leadership would want to see its country run out of gas in short order. Unless they think that any shortfall might be met by oil supplies from elsewhere in the world, when the time is necessary?
Thus the U.S. will become increasingly reliant on imports from politically tumultuous regions notably the unfurling Middle East, along with west Africa and the Caspian regions, presumably the latter in competition with Russia, e.g Azerbaijan and Kazakhstan. This is in contradistinction to President Bush's pledge to make the U.S. less dependent on "countries that don't particularly like us". many in Canada and Venezuela are of the opinion that the U.S. has taken them for granted and that a bit of competition from China might be a good thing, and could provide some political leverage over Washington in such issues as trade disputes over lumber and beef in Canada, and economic sanctions for human trafficking in Venezuela.
Until recently, China had concentrated on the Middle East, especially on Iraq. However, the arranged chess-board was wiped clear of pieces by the 2003 war, as a consequence of which China lost its stakes in Iraqui oil. This above all has changed China's view and sent its scouts further afield to look for alternative sources. It is estimated that by 2020 China will need 600 million tonnes of oil per year (triple the current consumption) to fuel the rise in numbers of cars, office and apartment blocks, and other symbols of industrial growth. Frankly, I doubt that meeting this demand is possible, but will in any case prove a tug-of-war with the rest of the world, and particularly the U.S. Now we are a net oil importer, I wonder how these islands of the U.K. will stand-up in the contest?
Under the rule of Mao Zedong, China industrialised rapidly, but within a philosophy of sustainability. That China should be self-contained and independent of the outside world, in terms of oil from its own production in the northeast of the country, near the city of Daqing. That was then. Now the government's quest to secure foreign oil fields is fuelled by the fear that one day there will be insufficient oil to satisfy worldwide demands, i.e "Peak Oil", and that China will be left high and dry. In international relations expert at Fuadan University said: "If the world oil stocks were exceeded by growth, who would provide energy to China? America would protect its own energy supply. The U.S. is China's major competitor".
All of these considerations are undoubtedly true. Self evident, one might say. There are a lot of us on the planet, with widely disparate qualities of life in terms of economic wealth (and indeed other measures of wealth, beyond just material possessions and a bank balance). However, the driver to industrialisation in countries like China, India and Brazil is an aspiration to a "western" lifestyle, which in truth even the west can no longer afford. The current industrial expansion is clearly unsustainable, since it is not possible to extract sufficient resources from the Earth to provide 6.5 billion people (9 billion by 2050, so it is estimated) with the material "comfort" that we in the west pretty much take for granted. If the west can't carry on in this way, then what hope for the "developing" nations.
I can envisage a day when the world is far less oil and energy intensive, simply because there are insufficient resources remaining to permit undue profligacy in these matters. Perhaps by that stage it might be a fairer, more "even" world with less materialistic values. Maybe. Maybe not. But even if we do get there, I think we are in for a pretty bumpy road along the way.