Monday, September 20, 2010

Passing the Baton

In an article by Michael T. Klare about China in the passing of an interesting milestone is noted.
On July 20th, the chief economist of the International Energy Agency (IEA), Fatih Birol, told the Wall Street Journal that China had overtaken the United States to become the world’s number one energy consumer. One can read this development in many ways: as evidence of China’s continuing industrial prowess, of the lingering recession in the United States, of the growing popularity of automobiles in China, even of America’s superior energy efficiency as compared to that of China. All of these observations are valid, but all miss the main point: by becoming the world’s leading energy consumer, China will also become an ever more dominant international actor and so set the pace in shaping our global future.
In the introduction to that article, a slightly different significant event is marked:
For a whopping $60 billion -- yes, Virginia, that is “billion” -- the Saudis, according to Jim Lobe of Inter Press Service, have agreed to buy 84 F-15s and 175 helicopters as part of the largest arms deal in U.S. history. In addition, the sale, soon to be presented to Congress for approval by the White House, could end up involving a supplemental $30 billion deal “to upgrade the Saudi kingdom’s naval forces and yet another for new missile-defense systems.” (You didn’t even know that Saudi Arabia had a navy, did you?) This, Lobe writes, will “by itself exceed the value of all conventional arms transfer agreements signed worldwide by developing and developed countries alike in 2009 -- $57.5 billion.” And there’s even an added bonus for U.S. arms makers. Though this sale is theoretically aimed at Iran, the Saudi military, for all its weaponry, has shown little urge to fight, or to fight effectively. This will, however, surely mean billions more in compensatory U.S. weaponry flowing to Israel.
As regards "reputation", I would rather be known as a leader energy producer than as a major arms seller. But the US has decided to specialize in weaponry and destruction rather than in energy and construction. Odd choice.

The article points out a simple calculation of world political strategy:
According to the most recent projections from the U.S. Department of Energy (DoE), Chinese energy consumption will grow by 133% between 2007 and 2035 -- from, that is, 78 to 182 quadrillion British thermal units (BTUs). Think about it this way: the 104 quadrillion BTUs that China will somehow have to add to its energy supply over the next quarter-century equals the total energy consumption of Europe and the Middle East in 2007. Finding and funneling so much oil, natural gas, and other fuels to China is undoubtedly going to be the single greatest economic and industrial challenge facing Beijing -- and in that challenge lays the possibility of real friction and conflict.
The handwriting is already on the wall for a strategic battle over petroleum:
As recently as 1995, China only consumed about 3.4 million barrels of oil per day -- one-fifth the amount used by the United States, the world’s top consumer, and two-thirds of the amount burned by Japan, then number two. Since China pumped 2.9 million barrels per day from its domestic fields that year, its import burden was a mere 500,000 barrels per day at a time when the U.S. imported 9.4 million barrels and Japan 5.3 million barrels.

By 2009, China was in the number-two spot at 8.6 million barrels per day, which still fell far below America’s 18.7 million barrels. At 3.8 million barrels per day, however, domestic production wasn’t keeping pace -- the very problem the U.S. had faced in the Cold War era. China was already importing 4.8 million barrels per day, far more than Japan (which had actually reduced its reliance on oil) and nearly half as much as the United States. In the decades to come, these numbers are guaranteed only to get worse.

According to the DoE, China will overtake the U.S. as the world’s leading oil importer, at an estimated 10.6 million barrels per day, sometime around 2030. (Some experts believe this shift could occur far sooner.)


Especially striking has been the way Beijing has sought to undercut U.S. influence in Saudi Arabia and with other crucial Persian Gulf oil producers. In 2009, China imported more Saudi oil than the U.S. for the first time, a geopolitical shift of great significance, given the history of U.S.-Saudi relations. Although not competing with Washington when it comes to military aid, Beijing has been dispatching its top leaders to woo Riyadh, promising to support Saudi aspirations without employing the human rights or pro-democracy rhetoric usually associated with American foreign policy.

No comments: