China, the USA and the world’s oil and gas

China’s oil imports. Click to enlarge.

The other day I read that China has overtaken the USA as the world’s largest oil importer.  Earlier I read that China has overtaken the USA as the world’s largest market for automobiles.  As the world uses up easy-to-get oil, there will be conflict between the USA and China to get what’s left.

China needs access to the world’s oil and gas if it is to raise the material standard of living of its people.  But the USA needs access to the world’s oil and gas if it is to maintain what we call the American standard of living.

What this means is that, unlike with the situation between the USA and Russia, there is a real conflict of interest between the Chinese people and the American people.  The world may not have enough fossil fuels to satisfy the desires of both.

China has one of the world’s largest reserves of coal and one of the world’s largest coal industries.  It is a leader in developing solar energy technology, although this as yet serves only a tiny fraction of its energy needs.  China has extended pipelines into central Asia, and recently signed an agreement to build a new oil and gas pipeline into Russia.

The quest for energy explains China’s disputes with Japan, the Philippines, Vietnam, Malaysia and other countries over control of islands in the East China Sea and South China Sea.  Control of these islands not only gives China control over offshore oil and gas.  It enables China to protect its shipping from the Persian Gulf.

Access to oil is a vital interest of the USA.  The Carter Doctrine, back in 1980, said that access to the Persian Gulf was a vital interest of the United States, meaning the U.S. would go to war if necessary to protect it.  The first President Bush said in 1991 was the Gulf War was about “jobs, jobs, jobs,” which meant “oil, oil, oil.”

In recent years, the United States has increased domestic energy production, with fracking and offshore oil drilling (both of which President Obama strongly supports).   But this doesn’t mean the USA doesn’t need imports.  Seeming inconsistencies in current U.S. policy in the Middle East make sense if you think of U.S. policy as a quest for oil rather than a quest for democracy.

The world’s easy-to-get oil and gas have been used up and competition for the rest of the world’s oil is bound to become more intense.  The European Union, in its need for oil and gas, may find itself in conflict with both the USA and China.

I don’t see any obvious way to resolve this.  It would be good if the world’s energy-importing countries could reach an agreement based on compromise.  It would be good if the world could switch to renewable energy.  But I don’t see either one happening anytime soon, and to the extent that either compromise or renewables are feasible, it might entail a more frugal way of life than most North Americans (myself included) would be willing to accept.

LINK

 Whose Oil Will Quench China’s Thirst? by Chris Dalby for Oil Price and Naked Capitalism.

Tags: China, China's Energy Needs, China-US Relationship, East China Sea, Oil and Gas, South China Sea