[Marxism] China and competition over oil

Louis Proyect lnp3 at panix.com
Sat Oct 15 07:27:39 MDT 2005

Just a decade ago, in 1994, China accounted for less than 5 percent of the 
world's net petroleum consumption and produced virtually all of the oil it 
burned. True, China was already number four among the world's top oil 
consumers, after the United States, Japan and Russia, but its daily usage 
of 3 million barrels represented less than one-fifth of what the United 
States consumed on an average day. Since then, however, China has jumped to 
the number-two position (supplanting Japan in 2003), and its current 
consumption of about 6 million barrels per day is approximately one-third 
of America's usage. However, domestic oil output in China has remained 
relatively flat over this period, so it must now import half of its total 
supply. And with China's economy roaring ahead, its need for imported 
petroleum is expected to climb much higher in the years to come: According 
to the Department of Energy (DOE), Chinese oil consumption is projected to 
reach 12 million barrels per day in 2020, of which 9 million barrels will 
have to be obtained abroad. With the United States also needing more 
imports--as much as 16 million barrels per day in 2020 -- and with no 
credible research on alternative energy sources approaching conclusion, the 
stage is being set for an intense struggle over access to the world's 
petroleum supplies.

This would not be such a worrisome prospect if global petroleum output 
could expand sufficiently between now and 2020 to satisfy increased demand 
from both China and the United States--and in fact, the DOE predicts that 
sufficient oil will be available at that time. But many energy experts 
believe world oil output, now hovering at about 84 million barrels per day, 
is nearing its maximum or "peak" sustainable level, and that there is no 
way that the world will ever reach the 111 million barrels projected by the 
DOE for 2020. If this proves to be the case, or even if output continues to 
rise but still falls significantly short of the DOE projection, the 
competition between the United States and China for whatever oil remains in 
ever diminishing foreign reservoirs will become even more fierce and 

The intensifying US-Chinese struggle for oil is seen, for instance, in 
China's aggressive pursuit of supplies in such countries as Angola, Canada, 
Indonesia, Iran, Kazakhstan, Nigeria, Saudi Arabia, Sudan and Venezuela. 
Until recently China derived very little of its petroleum from these 
countries; now it has deals with all of them to secure new supplies. That 
China is competing so vigorously with the United States for access to 
foreign oil is worrisome enough to American business leaders and government 
officials, given the likelihood that this will result in higher energy 
costs leading to a slowing economy; the fact that it is seeking to siphon 
off oil from places like Canada, Nigeria, Saudi Arabia and Venezuela--which 
have long sent a large share of their supplies to America--is the source of 
even greater concern, holding as it does the potential to result in a 
permanent shift in the global flow of oil. From a strategic perspective, 
moreover, US officials worry that China's efforts to acquire more oil from 
Iran and Sudan have been accompanied by deliveries of arms and military 
aid, thus altering the balance of power in areas considered vital to 
Washington's security interests. China, whose reach not long ago seemed to 
be limited to regions on its immediate borders, has emerged as a 
significant global player in the energy sweepstakes and beyond.

Initially, discussion of China's intensifying quest for foreign oil was 
largely confined to the business press. But now, for the first time, it is 
being viewed as a national security matter--that is, as a key factor in 
shaping US military policy. This outlook was first given official 
expression in the 2005 edition of the Pentagon's report on Chinese military 
power. "China became the second largest consumer and third largest importer 
of oil in 2003," the report notes. "As China's energy and resource needs 
grow, Beijing has concluded that access to these resources requires special 
economic or foreign policy relationships in the Middle East, Africa, and 
Latin America, bringing China closer to problem countries such as Iran, 
Sudan, and Venezuela." Again, the implications of this are obvious: China's 
growing ties to "problem states" constitute a threat to strategic 
initiatives in volatile areas of particular interest to US policymakers and 
so must be met with countermoves of one sort or another.

Two trends have thus joined to propel this new swing of the pendulum: a 
drive to refocus attention on the long-term challenge posed by China and 
fresh concern over China's pursuit of oil supplies in strategic areas of 
the globe. So long as these two conditions prevail--and there is no repeat 
of 9/11--the calls for increased US military preparation for an eventual 
war with China will grow stronger. The fact that Bush has seen his 
job-approval rating plummet in the wake of Hurricane Katrina might also 
tempt the Administration to play up the China threat. While none of this is 
likely to produce an immediate rupture in US-Chinese relations--the forces 
favoring economic cooperation are too strong to allow that--we can expect 
vigorous calls for an ambitious US campaign to neutralize China's recent 
military initiatives.

This campaign will take two forms: first, a drive to offset any future 
gains in Chinese military strength through permanent US 
military-technological superiority; and second, what can only be described 
as the encirclement of China through the further acquisition of military 
bases and the establishment of American-led, anti-Chinese alliances will 
continue. None of these efforts are being described as part of an explicit, 
coherent strategy of containment, but there is no doubt from the testimony 
of US officials that such a strategy is being implemented.

full: http://www.zmag.org/content/showarticle.cfm?SectionID=103&ItemID=8927

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