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| Subject: | [socialcredit] "Chinese appetite for oil/gas energy" CITS Debt/Capital Watch (Part I) | | Date: | Wednesday, March 2, 2005 17:44:11 (-0500) | | From: | W. Curtiss Priest <bmslib @...edu>
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W. Curtiss Priest, Ph.D.
Center for Information, Technology & Society
466 Pleasant Street Melrose, MA 02176
E-mail: BMSLIB@MIT.EDU, Voice: 781-662-4044, FAX: 781-662-6882
March 2, 2005
Public Issue #:120
CITS Debt/Capital Watch
"Chinese appetite for oil/gas energy"
Commentary by Dr. W. Curtiss Priest, Director:
I refer to an article, "China fuels energy cold war." This
can be read at:
http://www.atimes.com/atimes/China/GC02Ad07.html
As I find that web articles come and go, I paste in a text
copy of the article (below).
Last night I watched a Christian broadcast about why we are
in Iraq. This broadcast did not mention oil, but, rather,
it saw "the West" in a struggle with the values associated
with many middle-east countries.
Yes, I have read materials that suggest that Christianity
is more advanced, and a better set of values.
This editor would like everyone to sit down "at a table" and
discuss why and how their values are better suited to a more
modern, civilized set of cultures. Am I mesmerized by the
magic of "democracies?" No. Why? I sincerely believe that
every religion has something to impart to each member of each
culture. And, depending on the differences between cultures,
I do not believe that "democracy" 'fits all.' Yet, I enjoy
the freedoms that the US democracy has afforded me, and so
I will speak out in favor of it.
We do not have to turn to "hot spots" such as Iraq. Indeed,
our own country is harbor to dozens of different religions.
For example, Judiasm differs from Christianity. We know that,
we accept that. So when I hear that our US administration
wishes to imbue all countries that we have trouble with, with
democracy, I see a hidden agenda -- we only wish to do this,
primarily, with places that provide us natural resources --
yes, mainly oil and gas.
That we do this selectively, based on our needs for feeding
our needs for fuel, is quite selfserving. Europe has coped
with fuel supply by taxing oil and gas at high levels. As
a result, the occupants run small, energy-efficient cars.
When the US National Highway Traffic Safety Administration (NHTSA)
asked MIT why was it that Europe and Japan were so quick to
provide the US with fuel economic cars in the 70's, the answer
was quite simple. Much higher gasoline taxes encouraged the
production of efficient cars and bolstered the use of public
transportation. Now we hear that the US may not even be able
to afford their subsidy to AMTRAK. And over half the vehicle
sales in the US are for cars or trucks that get around 15 mpg. --
far, far less than what NHTSA instituted for "passenger cars"
and the "CAFE" standard.
So, yes, not only do some families protect themselves with
a mass of steel 2-3 times heavier than a car they may hit, they
do so by causing the US to gobble up oil and gas. Believe
me. No one in 1974 imagined that the CAFE standard could be
so completely and utterly circumvented. Now vehicles get
fewer miles per gallon than most vehicles on the road in 1972 --
prior to the energy crisis.
More recently, because these are "hulking" vehicles, we hear
that parents are tired of running over their children, when
backing up, and want further technology to make up for the
fact that they vehicles are simply too large for anyone to
see around or through.
But, while many eyes of America are focussed on this tinsy
little country called Iraq, we have a much larger looming
problem, not with N. Korean armaments, but with the fact that
China now is the second largest consumer of oil, behind the
US. And, yes, you can ask yourself, how can a tinsy little
country like ours at 280 million folk, be outconsuming China
with nearly 2 billion folk, and when China is providing ever
increasing manufactured goods to the US and others.
So, as China is clearly on the road to full industralization,
it is struggling to maintain a flow of oil and gas.
The Asian Times describes the many territorial conflicts that
this demand has created, and the increased tensions between
China and Japan. It describes how China taps into many oil
sources that are to the detriment of flows to the US -- from
Iraq to Russia.
So while I and others have been impressed with China's ability
to vastly undersell products to the US (despite the shipping
costs), we are not impressed that to do so pushes China into
oil gulping.
As Hubbert's curve:
http:/www.hubbertpeak.com
clearly shows, we are on the downward slope of fossil fuel
availability.
Hydrogen? Well, many folk just make that out of a fossil
fuel. Many more nuclear plants? Currently, electricity is
considered a "high class" source of energy. It cost more, and
generation costs either creat acid rain in New England, or
problems disposing of "spent fuel rods."
A colleague said, just to heat his home in Maine, he needs
10 acres of land to grow the trees, to turn into logs.
Where is "steady-state?" I don't know but I know it has
nothing to do with oil tankers and LNG tankers.
Regards,
W. Curtiss Priest, Ph.D.
Editor, CITS Debt Watch
Director, Center for Information, Technology & Society
Research Affiliate, MIT, Comparative Media Studies
***
For prior issues of the CITS Debt Watch:
http://groups.google.com/groups?hl=en&lr=&ie=ISO-8859-1&scoring=d&q=%22cits+debt+watch%22+%22debt-financed%22
[please rejoin this address if it splits]
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Greater China Mar 2, 2005
China fuels energy cold war By Chietigj Bajpaee
HONG KONG - A notable feature of 2004 was the volatility in oil prices
- New York light sweet crude prices reached a peak of US$55.67 on
October 25, ending the year up 33.6% at $43.45 per barrel. While a
number of supply-side and supply-chain factors have contributed to
this situation, the most significant long-term factor contributing to
rising oil prices is an increase in Asian demand, most notably from
China. China's unprecedented growth not only makes it a driver of a
long-term increase in energy prices, but also the most vulnerable to
rising oil prices.
China, which has been a net oil importer since 1993, is the world's
number two oil consumer after the US and has accounted for 40% of the
world's crude oil demand growth since 2000. China's proven oil
reserves stand at 18 trillion barrels, and oil imports account for
one-third of its crude oil consumption.
China has initiated numerous policies to cope with its increasing
energy needs, including stepping up exploration activities within its
own borders, diversifying beyond oil to access other energy resources,
such as nuclear power, coal, natural gas and renewable energy
resources, promoting energy conservation and encouraging investment
into energy-friendly technologies such as hydrogen-powered fuel cells
and coal gasification.
China has also joined the United States and Japan in developing
strategic petroleum reserves, with the creation of 75 days of
emergency reserves in four locations in Zhejiang, Shandong and
Liaoning provinces.
Nevertheless, in the face of sporadic power shortages, growing car
ownership and air travel across China and the importance of energy to
strategically important and growing industries such as agriculture,
construction, and steel and cement manufacturing, pressure is going to
mount on China to access energy resources on the world stage.
As a result, energy security has become an area of vital importance to
China's stability and security. China is stepping up efforts to secure
sea lanes and transport routes that are vital for oil shipments, and
diversifying beyond the volatile Middle East to find energy resources
in other regions, such as Africa, the Caspian, Russia, the Americas
and the East and South China Sea region.
However, just as China has for centuries engaged in competition for
leadership of Asia, the developing world and status on the world
stage, so the need for energy security has now raised the possibility
of further competition and confrontation in the energy sphere.
This competition has so far been limited to the economic sphere
through state-owned oil and gas companies such as China Petroleum &
Chemical Corporation (Sinopec), China National Petroleum Corporation
(CNPC), its subsidiary PetroChina and China National Offshore Oil
Corporation. However, as oil prices rise and China imports an
increasing amount of its energy needs, the competition is likely to
spill over into the political and military spheres. There are already
indications of this.
China's quest for energy resources on the world stage is creating a
destabilizing effect on international and regional security. Fueled by
the lack of a coherent multilateral approach to energy security in
Asia and by China's already tense relations with neighboring states,
the competition for energy resources may prove to be the spark for
regional and international conflict. In many cases, China is vying for
energy resources in some of the most unstable parts of the world. Its
involvement in regions with raging conflicts could potentially draw it
into the disputes, escalating a regional conflict into an
international conflict.
Sino-Japanese energy competition While Sino-Japanese trade has reached
unprecedented levels in recent years, the economic progress could be
unraveled by political and military confrontation, and by energy
competition. China continues to have tense relations with Japan as a
result of a number of issues. These issues include, but are not
limited to, Chinese opposition to a Japanese permanent seat on the
United Nations Security Council, former Taiwanese president Lee Teng
Hui's visit to Japan at the end of 2004, and Japanese Prime Minister
Junichiro Koizumi's annual visits to the Yasukuni Shrine that honors
Japan's war dead, including 14 Class A war criminals.
There has also been discussion in Japan about cutting its overseas
development assistance to China in the presence of China's improving
standard of living, high growth levels and confrontational relations
with Japan. These tensions are likely to be further enflamed by both
states' quest for energy security. Both states are net oil importers,
with Japan importing as much as 80% of its oil needs.
In an attempt to access energy resources closer to home and
diversifying beyond the Middle East, Japan and China have been
actively lobbying Moscow for an oil pipeline. Beijing is pushing for a
2,400 kilometer route from Angarsk in Siberia to Daqing in China's
northeast Heilongjiang province, while Tokyo favors a 4,000 kilometer
pipeline from Taishet to the Pacific port of Nakhodka.
The Japanese-backed proposal was announced the winner at the end of
2004. However, with the sometimes tense relations between Japan and
Russia, as seen most recently over Koizumi's sail around the disputed
Northern Territories/ Southern Kurils on September 2, and Japan and
Russia not having signed a formal peace treaty ending the hostilities
of World War II, the construction of the pipeline may still experience
several delays. Furthermore, China is not yet out of the picture as
there are still discussions to build a branch from the Japanese
pipeline to China by 2020.
Closer to home, a territorial dispute between China and Japan in the
East China Sea, which both sides claim as their exclusive economic
zone (EEZ), is being further fueled by reports of vast supplies of oil
and gas in the region. The disputed territory includes the Diaoyu or
Senkaku islands and the Chunxiao gas field northeast of Taiwan, which,
according to a 1999 Japanese survey, holds 200 billion cubic meters of
gas. Japan regards the median line as its border, while China claims
jurisdiction over the entire continental shelf. In 2003, China began
drilling in the area after the Japanese rejected a Chinese proposal to
develop the field jointly. Although the Chunxiao gas field is on the
Chinese side of the median line, Japan claims that China may be
siphoning energy resources on the Japanese side.
The competition recently took the form of a military confrontation
following the incursion of a Chinese nuclear-powered submarine into
Japanese waters off the Okinawa islands on November 10 last year. The
intrusion was followed by a two-day chase across the East China Sea.
While China offered a swift apology for the incursion, this was soon
followed by the intrusion of a Chinese research vessel into Japanese
waters near the island of Okinotori. The vessel is believed to have
been surveying the seabed for oil and gas drilling purposes. This was
the 34th maritime research exercise by Chinese vessels within Japan's
EEZ in 2004, up from eight in 2003, with China not giving prior
notification in 21 of the 34 cases.
Adding to these tensions is Japan's shift from its post-war pacifist
and defensive posture toward a more active military role in the
region, as seen with the current deployment of its Self Defense Forces
to Iraq. Furthermore, Japan has for the first time identified China as
a potential security threat in its National Defense Program Outline
released in December 2004. Three issues have been identified that
could spark a conflict between China and Japan: natural resources in
the disputed East China Sea, the disputed status of the Senkaku or
Diaoyu islands and Japanese support for the US in a conflict with
China over Taiwan. Mistrust and animosities rooted in Japanese
atrocities during World War II combined with a confrontation over
tangible issues, such as territory and energy resources, and a more
active role by both states on the world stage create a recipe for a
volatile situation.
Securing sea lanes To China's south, another long-standing maritime
territorial dispute in the South China Sea over the Spratly and
Paracel islands threatens to be further enflamed by China's quest for
energy security. The 130 islands making up the Paracel islands, which
have been occupied by China since 1974, are also claimed by Vietnam
and Taiwan. The 400 islands of the Spratly islands are claimed
partially by the Philippines, Brunei and Indonesia, and are fully
claimed by Vietnam, Taiwan and China.
--
W. Curtiss Priest, Director, CITS
Research Affiliate, Comparative Media Studies, MIT
Center for Information, Technology & Society
466 Pleasant St., Melrose, MA 02176
781-662-4044 BMSLIB@MIT.EDU http://Cybertrails.org
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