Stupid Elite Could Learn From This Kid (photo: cayusa, flickr)

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Two Saturdays ago, I was walking with a friend in a park here in New York City.  It was late January, but I was dressed in a light sweater and a thin fall jacket, which I had just taken off and tied around my waist.  We were passing a strip of bare ground when suddenly we both did a double-take.  He looked at me and said, “Crocuses!”  Dumbfounded, I replied, “Yes, I see them.”  And there they were, a few clumps of telltale green shoots poking up from the all-brown ground as if it were spring.  Such a common, comforting sight, but it sent a chill through me that noticeably wasn’t in the air.  Even the flowers, I thought, are confused by our new version of weather.

Later that same week, as temperatures in the Big Apple crested 60 degrees, I was chatting on the phone with a friend in Northampton, Massachusetts.  I was telling him about the crocuses, when he suddenly said, “I’m looking out my window right now and for the first time in my memory of January, there’s not a trace of snow!”

Of course, our tales couldn’t be more minor or anecdotal, even if the temperatures that week did feel like we were on another planet.  Here’s the thing, though: after a while, even anecdotes add up — maybe we should start calling them “extreme anecdotes” — and right now there are so many of them being recounted across the planet.  How could there not be in a winter, now sometimes referred to as “Junuary,” in which, in the United States, 2,890 daily high temperature records have either been broken or tied at last count, with the numbers still rising?  Meanwhile, just to the south of us, in Mexico, extreme anecdotes abound, since parts of the country are experiencing “the worst drought on record.”  Even cacti are reportedly wilting and some towns are running out of water (as they are across the border in drought-stricken Texas).  And worst of all, the Mexican drought is expected to intensify in the months to come.

And who can doubt that in Europe, experiencing an extreme cold spell the likes of which hasn’t been seen in decades — even Rome had a rare snowfall and Venice’s canals were reported to be freezing over — there are another set of all-too-extreme anecdotes.  After all, in places like Ukraine, scores of the homeless are freezing to death, pipes are bursting, power cuts are growing, and maybe even an instant energy crisis is underway (at a moment when the European Union is getting ready to cut itself off from Iranian oil).

That’s just to begin a list.  Read the rest of this entry →

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Last week, the president made a rare appearance at the Pentagon to unveil a new strategic plan for U.S. military policy (and so spending) over the next decade.  Let’s leave the specifics to a future TomDispatch post and focus instead on a historical footnote: Obama was evidently the first president to offer remarks from a podium in the Pentagon press room.  He made the point himself — “I understand this is the first time a president has done this.  It’s a pretty nice room.  (Laughter)” — and it was duly noted in the media.  Yet no one thought to make anything of it, even though it tells us so much about our American world.

After all, when was the last time the president appeared at a podium at the Environmental Protection Agency to announce a 10-year plan for a “leaner, meaner” approach to the environment, or at the Education Department to outline the next decade of blue-skies thinking (and spending) for giving our children a leg-up in a competitive world?  Or how about at a State Department podium to describe future planning for a more peaceable planet more peaceably attained?  Unfortunately, you can’t remember such moments and neither can America’s reporters, because they just aren’t part of Washington life.  And strangest of all, no one finds this the tiniest bit odd or worth commenting on. 

Over the last decade, this country has been so strikingly militarized that no one can imagine 10 years of serious government planning or investment not connected to the military or the national security state.  It’s a dangerous world out there — so we’re regularly told by officials who don’t mention that no military is built to handle the scariest things around.  War and the sinews of war are now our business and the U.S. military is our go-to outfit of choice for anything from humanitarian action to diplomacy (even though that same military can’t do the one thing it’s theoretically built to do: win a modern war). And if you don’t believe me that the militarization of this country is a process far gone, check out the last pages of Secretary of State Hillary Clinton’s recent piece, “America’s Pacific Century,” in Foreign Policy magazine.  Then close your eyes and tell me that it wasn’t written by a secretary of defense, rather than a secretary of state — right down to the details about the “littoral combat ships” we’re planning to deploy to Singapore and the “greater American military presence” in Australia.

Of course, the irony of this American moment is that the Republicans, those supposed advocates of “small government,” are the greatest fans we have of the ever increasing oppressive powers of the biggest of governments.  In recent years, have they seen a single enhanced power they didn’t put their stamp of approval on or enhance further? Predictably, no sooner did the president’s Pentagon press briefing end than assorted Republicans began attacking Obama and his relatively modest Pentagon plan for reshuffling military funds — from House Armed Services Committee Chairman Howard P. “Buck” McKeon (“a lead from behind strategy for a left-behind America”) and Senator John McCain (“greatest peril”) to presidential candidate Mitt Romney (“inexcusable, unthinkable”) — as if it were a program for unilateral disarmament.

So when the U.S. faces a problem in the world — say, keeping the energy flowing on this planet — the first thing that’s done is to militarize the problem.  It’s the only way Washington now knows how to think.  As Michael Klare — whose upcoming book The Race for What’s Left: The Global Scramble for the World’s Last Resources will certainly be a must-read of the season — makes clear, a further militarization of oil and gas policy is underway with an eye to the Pacific, and we have another anxious year on the horizon. (To catch Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the crisis in the Strait of Hormuz, click here, or download it to your iPod here.) Tom

Danger Waters
The Three Top Hot Spots of Potential Conflict in the Geo-Energy Era
By Michael T. Klare

Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk.  With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs.  In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

Take the Strait of Hormuz, already making headlines and shaking energy markets as 2012 begins.  Connecting the Persian Gulf and the Indian Ocean, it lacks imposing geographical features like the Rock of Gibraltar or the Golden Gate Bridge.  In an energy-conscious world, however, it may possess greater strategic significance than any passageway on the planet.  Every day, according to the U.S. Department of Energy, tankers carrying some 17 million barrels of oil — representing 20% of the world’s daily supply — pass through this vital artery. 

So last month, when a senior Iranian official threatened to block the strait in response to Washington’s tough new economic sanctions, oil prices instantly soared. While the U.S. military has vowed to keep the strait open, doubts about the safety of future oil shipments and worries about a potentially unending, nerve-jangling crisis involving Washington, Tehran, and Tel Aviv have energy experts predicting high oil prices for months to come, meaning further woes for a slowing global economy.

The Strait of Hormuz is, however, only one of several hot spots where energy, politics, and geography are likely to mix in dangerous ways in 2012 and beyond.  Keep your eye as well on the East and South China Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing its sea ice.  In all of these places, countries are disputing control over the production and transportation of energy, and arguing about national boundaries and/or rights of passage.

In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map.  Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets.  More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.

You can already see this in the elaborate Defense Strategic Guidance document, “Sustaining U.S. Global Leadership,” unveiled at the Pentagon on January 5th by President Obama and Secretary of Defense Leon Panetta.  While envisioning a smaller Army and Marine Corps, it calls for increased emphasis on air and naval capabilities, especially those geared to the protection or control of international energy and trade networks.  Though it tepidly reaffirmed historic American ties to Europe and the Middle East, overwhelming emphasis was placed on bolstering U.S. power in “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.”

In the new Geo-Energy Era, the control of energy and of its transport to market will lie at the heart of recurring global crises.  This year, keep your eyes on three energy hot spots in particular: the Strait of Hormuz, the South China Sea, and the Caspian Sea basin. 

The Strait of Hormuz

A narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the strait is the sole maritime link between the oil-rich Persian Gulf region and the rest of the world.  A striking percentage of the oil produced by Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker through this passageway on a daily basis, making it (in the words of the Department of Energy) “the world’s most important oil chokepoint.”  Some analysts believe that any sustained blockage in the strait could trigger a 50% increase in the price of oil and trigger a full-scale global recession or depression.

American leaders have long viewed the Strait as a strategic fixture in their global plans that must be defended at any cost.  It was an outlook first voiced by President Jimmy Carter in January 1980, on the heels of the Soviet invasion and occupation of Afghanistan which had, he told Congress, “brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world’s oil must flow.”  The American response, he insisted, must be unequivocal: any attempt by a hostile power to block the waterway would henceforth be viewed as “an assault on the vital interests of the United States of America,” and “repelled by any means necessary, including military force.”

Much has changed in the Gulf region since Carter issued his famous decree, known since as the Carter Doctrine, and established the U.S. Central Command (CENTCOM) to guard the Strait — but not Washington’s determination to ensure the unhindered flow of oil there.  Indeed, President Obama has made it clear that, even if CENTCOM ground forces were to leave Afghanistan, as they have Iraq, there would be no reduction in the command’s air and naval presence in the greater Gulf area. 

It is conceivable that the Iranians will put Washington’s capabilities to the test.  On December 27th, Iran’s first vice president Mohammad-Reza Rahimi said, “If [the Americans] impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”  Similar statements have since been made by other senior officials (and contradicted as well by yet others).  In addition, the Iranians recently conducted elaborate naval exercises in the Arabian Sea near the eastern mouth of the strait, and more such maneuvers are said to be forthcoming.  At the same time, the commanding general of Iran’s army suggested that the USS John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return.  “The Islamic Republic of Iran,” he added ominously, “will not repeat its warning.”

Might the Iranians actually block the strait?  Many analysts believe that the statements by Rahimi and his colleagues are bluster and bluff meant to rattle Western leaders, send oil prices higher, and win future concessions if negotiations ever recommence over their country’s nuclear program.  Economic conditions in Iran are, however, becoming more desperate, and it is always possible that the country’s hard-pressed hardline leaders may feel the urge to take some dramatic action, even if it invites a powerful U.S. counterstrike.  Whatever the case, the Strait of Hormuz will remain a focus of international attention in 2012, with global oil prices closely following the rise and fall of tensions there.

The South China Sea

The South China Sea is a semi-enclosed portion of the western Pacific bounded by China to the north, Vietnam to the west, the Philippines to the east, and the island of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south.  The sea also incorporates two largely uninhabited island chains, the Paracels and the Spratlys.  Long an important fishing ground, it has also been a major avenue for commercial shipping between East Asia and Europe, the Middle East, and Africa.  More recently, it acquired significance as a potential source of oil and natural gas, large reserves of which are now believed to lie in subsea areas surrounding the Paracels and Spratlys.

With the discovery of oil and gas deposits, the South China Sea has been transformed into a cockpit of international friction.  At least some islands in this energy-rich area are claimed by every one of the surrounding countries, including China — which claims them all, and has demonstrated a willingness to use military force to assert dominance in the region.  Not surprisingly, this has put it in conflict with the other claimants, including several with close military ties to the United States.  As a result, what started out as a regional matter, involving China and various members of the Association of Southeast Asian Nations (ASEAN), has become a prospective tussle between the world’s two leading powers.

To press their claims, Brunei, Malaysia, Vietnam, and the Philippines have all sought to work collectively through ASEAN, believing a multilateral approach will give them greater negotiating clout than one-on-one dealings with China. For their part, the Chinese have insisted that all disputes must be resolved bilaterally, a situation in which they can more easily bring their economic and military power to bear.  Previously preoccupied with Iraq and Afghanistan, the United States has now entered the fray, offering full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.

Chinese Foreign Minister Yang Jiechi promptly warned the United States not to interfere.  Any such move “will only make matters worse and the resolution more difficult,” he declared.  The result was an instant war of words between Beijing and Washington.  During a visit to the Chinese capital in July 2011, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen delivered a barely concealed threat when it came to possible future military action.  “The worry, among others that I have,” he commented, “is that the ongoing incidents could spark a miscalculation, and an outbreak that no one anticipated.”  To drive the point home, the United States has conducted a series of conspicuous military exercises in the South China Sea, including some joint maneuvers with ships from Vietnam and the Philippines.  Not to be outdone, China responded with naval maneuvers of its own.  It’s a perfect formula for future “incidents” at sea.

The South China Sea has long been on the radar screens of those who follow Asian affairs, but it only attracted global attention when, in November, President Obama traveled to Australia and announced, with remarkable bluntness, a new U.S. strategy aimed at confronting Chinese power in Asia and the Pacific.  “As we plan and budget for the future,” he told members of the Australian Parliament in Canberra, “we will allocate the resources necessary to maintain our strong military presence in this region.”  A key feature of this effort would be to ensure “maritime security” in the South China Sea. 

While in Australia, President Obama also announced the establishment of a new U.S. base at Darwin on that country’s northern coast, as well as expanded military ties with Indonesia and the Philippines.  In January, the president similarly placed special emphasis on projecting U.S. power in the region when he went to the Pentagon to discuss changes in the American military posture in the world.

Beijing will undoubtedly take its own set of steps, no less belligerent, to protect its growing interests in the South China Sea.  Where this will lead remains, of course, unknown.  After the Strait of Hormuz, however, the South China Sea may be the global energy chokepoint where small mistakes or provocations could lead to bigger confrontations in 2012 and beyond. 

The Caspian Sea Basin

The Caspian Sea is an inland body of water bordered by Russia, Iran, and three former republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan.  In the immediate area as well are the former Soviet lands of Armenia, Georgia, Kyrgyzstan, and Tajikistan.  All of these old SSRs are, to one degree or another, attempting to assert their autonomy from Moscow and establish independent ties with the United States, the European Union, Iran, Turkey, and, increasingly, China.  All are wracked by internal schisms and/or involved in border disputes with their neighbors.  The region would be a hotbed of potential conflict even if the Caspian basin did not harbor some of the world’s largest undeveloped reserves of oil and natural gas, which could easily bring it to a boil.

This is not the first time that the Caspian has been viewed as a major source of oil, and so potential conflict.  In the late nineteenth century, the region around the city of Baku — then part of the Russian empire, now in Azerbaijan — was a prolific source of petroleum and so a major strategic prize.  Future Soviet dictator Joseph Stalin first gained notoriety there as a leader of militant oil workers, and Hitler sought to capture it during his ill-fated 1941 invasion of the USSR.  After World War II, however, the region lost its importance as an oil producer when Baku’s onshore fields dried up.  Now, fresh discoveries are being made in offshore areas of the Caspian itself and in previously undeveloped areas of Kazakhstan and Turkmenistan.

According to energy giant BP, the Caspian area harbors as much as 48 billion barrels of oil (mostly buried in Azerbaijan and Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest supply in Turkmenistan).  This puts the region ahead of North and South America in total gas reserves and Asia in oil reserves.  But producing all this energy and delivering it to foreign markets will be a monumental task.  The region’s energy infrastructure is woefully inadequate and the Caspian itself provides no maritime outlet to other seas, so all that oil and gas must travel by pipeline or rail.

Russia, long the dominant power in the region, is pursuing control over the transportation routes by which Caspian oil and gas will reach markets.  It is upgrading Soviet-era pipelines that link the former SSRs to Russia or building new ones and, to achieve a near monopoly over the marketing of all this energy, bringing traditional diplomacy, strong-arm tactics, and outright bribery to bear on regional leaders (many of whom once served in the Soviet bureaucracy) to ship their energy via Russia.  As recounted in my book Rising Powers, Shrinking Planet, Washington sought to thwart these efforts by sponsoring the construction of alternative pipelines that avoid Russian territory, crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its own pipelines linking the Caspian area to western China.

All of these pipelines cross through areas of ethnic unrest and pass near various contested regions like rebellious Chechnya and breakaway South Ossetia.  As a result, both China and the U.S. have wedded their pipeline operations to military assistance for countries along the routes.  Fearful of an American presence, military or otherwise, in the former territories of the Soviet Union, Russia has responded with military moves of its own, including its brief August 2008 war with Georgia, which took place along the BTC route. 

Given the magnitude of the Caspian’s oil and gas reserves, many energy firms are planning new production operations in the region, along with the pipelines needed to bring the oil and gas to market.  The European Union, for example, hopes to build a new natural gas pipeline called Nabucco from Azerbaijan through Turkey to Austria.  Russia has proposed a competing conduit called South Stream.  All of these efforts involve the geopolitical interests of major powers, ensuring that the Caspian region will remain a potential source of international crisis and conflict.

In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea, and the Caspian Basin hardly stand alone as potential energy flashpoints. The East China Sea, where China and Japan are contending for a contested undersea natural gas field, is another, as are the waters surrounding the Falkland Islands, where both Britain and Argentina hold claims to undersea oil reserves, as will be the globally warming Arctic whose resources are claimed by many countries.  One thing is certain: wherever the sparks may fly, there’s oil in the water and danger at hand in 2012.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. His newest book, The Race for What’s Left: The Global Scramble for the World’s Last Resources, will be published in March.  To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the crisis in the Strait of Hormuz, click here, or download it to your iPod here.

Copyright 2012 Michael T. Klare

Playing With Fire (Photo: iko, flickr)

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Last Friday, the U.S. military formally handed over its largest base in Iraq, the ill-named “Camp Victory,” to the government of Prime Minister Nouri al-Maliki.  The next morning, Washington Post columnist David Ignatius officially declared counterinsurgency wars in the Middle East dead in — if you don’t mind an inapt word — the water.  (He is personally in mourning.)  He quoted one unnamed official describing Secretary of Defense Leon Panetta’s planning for the new Pentagon budget in this fashion: “It’s not going to be likely that we will deploy 150,000 troops to an area the way we did in Afghanistan and Iraq.”

No indeed.  As a result, in the inter-service scramble for the biggest slice of the Defense Department’s budgetary pie, the winners, Ignatius tells us, are going to be the Air Force and the Navy.  Translated geopolitically, this means that the focus of future military planning will switch to the Pacific — with this country’s largest foreign creditor, China (not al-Qaeda), as the new enemy.

In the what’s-old-is-new category, this is priceless.  In the spring of 2001, the Bush administration was focused on a strategic review of global military policy, led by Secretary of Defense Donald Rumsfeld, which “concluded that the Pacific Ocean should now become the most important focus of U.S. military deployments, with China now perceived as the principal threat to American global dominance” and its number one enemy.  In response, the Chinese were already issuing their own threats.  (Terrorism, the Bush administration then felt, was for wusses and Democrats, which is why they paid next to no attention to Osama bin Laden and al-Qaeda, despite warnings from officials of the outgoing Clinton administration, the CIA, and others.)

September 11, 2001, of course, sent them in quite another direction that — we can only assume — left China’s leaders thanking their lucky stars, while the U.S. military bogged itself down in two disastrous wars in the Greater Middle East.  A decade later, the U.S. is economically weaker, a battered former “sole superpower” still in need of an enemy, still thinking about global energy supplies, and, if anything, more reliant than ever on a military-first policy in the world.  As always, TomDispatch regular Michael Klare, author of Rising Powers, Shrinking Planet, is ahead of the curve in grasping just what’s at stake and why we should be worried as the Obama administration pivots, readying itself for its return to the pre-9/11 Bush moment.  Sigh. (To catch Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the American military build-up in the Pacific, click here or download it to your iPod here.) Tom Read the rest of this entry →

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Back before email, a world traveler who wanted to keep in touch and couldn’t just pop into the nearest Internet café might drop you a series of postcards from one exotic locale after another. Pepe Escobar, that edgy, peripatetic globe-trotting reporter for one of my favorite on-line publications, Asia Times, has been doing just that for TomDispatch readers as he explores the geography that undergirds our civilization, the pipelines that crisscross Eurasia through which flow energy — and trouble. This, then, is his fourth "postcard" from what he likes to call Pipelineistan. The first in March 2009 began laying out a great, ongoing energy struggle across Eurasia and the Great Game of business, diplomacy, and proxy war between Russia and the U.S. that went with it.

In May of that year, he plunged eastward into tumultuous Central and South Asia and the expanding battleground that, in Washington, goes by the neologism Af-Pak (for the Afghanistan-Pakistan theater of operations).  Next, in October, he headed west toward Europe and another developing struggle, which he dubbed "Pipelineistan’s Ultimate Opera", over just how natural gas from the Caspian Sea would reach Europe.  Now, in his first stop of 2010, he heads where, it seems, anyone interested in energy – maybe anyone interested in anything at all – more or less has to head these days: China and the new Silk Road of pipelines that offer the former Middle Kingdom a partial shot at future energy security and Washington future anxieties of all sorts.  Tom

*****

China’s Pipelineistan “War” 
Anteing Up, Betting, and Bluffing in the New Great Game 
By Pepe Escobar

Future historians may well agree that the twenty-first century Silk Road first opened for business on December 14, 2009.  That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang Province in China’s far west. Hyperbole did not deter the spectacularly named Gurbanguly Berdymukhamedov, Turkmenistan’s president, from bragging, “This project has not only commercial or economic value. It is also political. China, through its wise and farsighted policy, has become one of the key guarantors of global security.”

The bottom line is that, by 2013, Shanghai, Guangzhou, and Hong Kong will be cruising to ever more dizzying economic heights courtesy of natural gas supplied by the 1,833-kilometer-long Central Asia Pipeline, then projected to be operating at full capacity. And to think that, in a few more years, China’s big cities will undoubtedly also be getting a taste of Iraq’s fabulous, barely tapped oil reserves, conservatively estimated at 115 billion barrels, but possibly closer to 143 billion barrels, which would put it ahead of Iran. When the Bush administration’s armchair generals launched their Global War on Terror, this was not exactly what they had in mind. 

China’s economy is thirsty, and so it’s drinking deeper and planning deeper yet.  It craves Iraq’s oil and Turkmenistan’s natural gas, as well as oil from Kazakhstan. Yet instead of spending more than a trillion dollars on an illegal war in Iraq or setting up military bases all over the Greater Middle East and Central Asia, China used its state oil companies to get some of the energy it needed simply by bidding for it in a perfectly legal Iraqi oil auction.

Meanwhile, in the New Great Game in Eurasia, China had the good sense not to send a soldier anywhere or get bogged down in an infinite quagmire in Afghanistan.  Instead, the Chinese simply made a direct commercial deal with Turkmenistan and, profiting from that country’s disagreements with Moscow, built itself a pipeline which will provide much of the natural gas it needs.

No wonder the Obama administration’s Eurasian energy czar Richard Morningstar was forced to admit at a congressional hearing that the U.S. simply cannot compete with China when it comes to Central Asia’s energy wealth. If only he had delivered the same message to the Pentagon.

That Iranian Equation

In Beijing, they take the matter of diversifying oil supplies very, very seriously. When oil reached $150 a barrel in 2008 — before the U.S.-unleashed global financial meltdown hit — Chinese state media had taken to calling foreign Big Oil “international petroleum crocodiles,” with the implication that the West’s hidden agenda was ultimately to stop China’s relentless development dead in its tracks.

Twenty-eight percent of what’s left of the world’s proven oil reserves are in the Arab world. China could easily gobble it all up. Few may know that China itself is actually the world’s fifth largest oil producer, at 3.7 million barrels per day (bpd), just below Iran and slightly above Mexico. In 1980, China consumed only 3% of the world’s oil. Now, its take is around 10%, making it the planet’s second largest consumer.  It has already surpassed Japan in that category, even if it’s still way behind the U.S., which eats up 27% of global oil each year. According to the International Energy Agency (IEA), China will account for over 40% of the increase in global oil demand until 2030. And that’s assuming China will grow at “only” a 6% annual rate which, based on present growth, seems unlikely.

Saudi Arabia controls 13% of world oil production. At the moment, it is the only swing producer — one, that is, that can move the amount of oil being pumped up or down at will — capable of substantially increasing output. It’s no accident, then, that, pumping 500,000 bpd, it has become one of Beijing’s major oil suppliers.  The top three, according to China’s Ministry of Commerce, are Saudi Arabia, Iran, and Angola.  By 2013-2014, if all goes well, the Chinese expect to add Iraq to that list in a big way, but first that troubled country’s oil production needs to start cranking up. In the meantime, it’s the Iranian part of the Eurasian energy equation that’s really nerve-racking for China’s leaders.

Chinese companies have invested a staggering $120 billion in Iran’s energy sector over the past five years. Already Iran is China’s number two oil supplier, accounting for up to 14% of its imports; and the Chinese energy giant Sinopec has committed an additional $6.5 billion to building oil refineries there.  Due to harsh U.N.-imposed and American sanctions and years of economic mismanagement, however, the country lacks the high-tech know-how to provide for itself, and its industrial structure is in a shambles.  The head of the National Iranian Oil Company, Ahmad Ghalebani, has publicly admitted that machinery and parts used in Iran’s oil production still have to be imported from China.

Sanctions can be a killer, slowing investment, increasing the cost of trade by over 20%, and severely constricting Tehran’s ability to borrow in global markets. Nonetheless, trade between China and Iran grew by 35% in 2009 to $27 billion. So while the West has been slamming Iran with sanctions, embargos, and blockades, Iran has been slowly evolving as a crucial trade corridor for China — as well as Russia and energy-poor India. Unlike the West, they are all investing like crazy there because it’s easy to get concessions from the government; it’s easy and relatively cheap to build infrastructure; and being on the inside when it comes to Iranian energy reserves is a necessity for any country that wants to be a crucial player in Pipelineistan, that contested chessboard of crucial energy pipelines over which much of the New Great Game in Eurasia takes place. Undoubtedly, the leaders of all three countries are offering thanks to whatever gods they care to worship that Washington continues to make it so easy (and lucrative) for them.

Few in the U.S. may know that last year Saudi Arabia — now (re)arming to the teeth, courtesy of Washington, and little short of paranoid about the Iranian nuclear program — offered to supply the Chinese with the same amount of oil the country currently imports from Iran at a much cheaper price. But Beijing, for whom Iran is a key long-term strategic ally, scotched the deal.

As if Iran’s structural problems weren’t enough, the country has done little to diversify its economy beyond oil and natural gas exports in the past 30 years; inflation’s running at more than 20%; unemployment at more than 20%; and young, well educated people are fleeing abroad, a major brain drain for that embattled land. And don’t think that’s the end of its litany of problems. It would like to be a full member of the Shanghai Cooperation Organization (SCO) — the multi-layered economic/military cooperation union that is a sort of Asian response to NATO — but is only an official SCO observer because the group does not admit any country under U.N. sanctions.  Tehran, in other words, would like some great power protection against the possibility of an attack from the U.S. or Israel.  As much as Iran may be on the verge of becoming a far more influential player in the Central Asian energy game thanks to Russian and Chinese investment, it’s extremely unlikely that either of those countries would actually risk war against the U.S. to “save” the Iranian regime. 

The Great Escape

From Beijing’s point of view, the title of the movie version of the intractable U.S. v. Iran conflict and a simmering U.S. v. China strategic competition in Pipelineistan could be: “Escape from Hormuz and Malacca.”

The Strait of Hormuz is the definition of a potential strategic bottleneck.  It is, after all, the only entryway to the Persian Gulf and through it now flow roughly 20% of China’s oil imports.  At its narrowest, it is only 36 kilometers wide, with Iran to the north and Oman to the south. China’s leaders fret about the constant presence of U.S. aircraft carrier battle groups on station and patrolling nearby.

With Singapore to the North and Indonesia to the south, the Strait of Malacca is another potential bottleneck if ever there was one — and through it flow as much as 80% of China’s oil imports.  At its narrowest, it is only 54 kilometers wide and like the Strait of Hormuz, its security is also of the made-in-USA variety.  In a future face-off with Washington, both straits could quickly be closed or controlled by the U.S. Navy.

Hence, China’s increasing emphasis on developing a land-based Central Asian energy strategy could be summed up as: bye-bye, Hormuz! Bye-bye, Malacca! And a hearty welcome to a pipeline-driven new Silk Road from the Caspian Sea to China’s Far West in Xinjiang.

Kazakhstan has 3% of the world’s proven oil reserves, but its largest oil fields are not far from the Chinese border. China sees that country as a key alternative oil supplier via future pipelines that would link the Kazakh oil fields to Chinese oil refineries in its far west. In fact, China’s first transnational Pipelineistan adventure is already in place: the 2005 China-Kazakhstan oil project, financed by Chinese energy giant CNPC.

Much more is to come, and Chinese leaders expect energy-rich Russia to play a significant part in China’s escape-hatch planning as well. Strategically, this represents a crucial step in regional energy integration, tightening the Russia/China partnership inside the SCO as well as at the U.N. Security Council.

When it comes to oil, the name of the game is the immense Eastern Siberia-Pacific Ocean (ESPO) pipeline. Last August, a 4,000-kilometer-long Russian section from Taishet in eastern Siberia to Nakhodka, still inside Russian territory, was begun.  Russian Premier Vladimir Putin hailed ESPO as “a really comprehensive project that has strengthened our energy cooperation.”  And in late September, the Russians and the Chinese inaugurated a 999-kilometer-long pipeline from Skovorodino in Russia’s Amur region to the petrochemical hub Daqing in northeast China.

Russia is currently delivering up to 130 million tons of Russian oil a year to Europe. Soon, no less than 50 million tons may be heading to China and the Pacific region as well. 

There are, however, hidden tensions between the Russians and the Chinese when it comes to energy matters.  The Russian leadership is understandably wary of China’s startling strides in Central Asia, the former Soviet Union’s former “near abroad.”  After all, as the Chinese have been doing in Africa in their search for energy, in Central Asia, too, the Chinese are building railways and introducing high-tech trains, among other modern wonders, in exchange for oil and gas concessions.

Despite the simmering tensions between China, Russia, and the U.S., it’s too early to be sure just who is likely to emerge as the victor in the new Great Game in Central Asia, but one thing is clear enough. The Central Asian “stans” are becoming ever more powerful poker players in their own right as Russia tries not to lose its hegemony there, Washington places all its chips on pipelines meant to bypass Russia (including the Baku-Tbilisi-Ceyhan (BTC) pipeline that pumps oil from Azerbaijan to Turkey via Georgia) and China antes up big time for its Central Asian future.  Whoever loses, this is a game that the “stans” cannot but profit from.

Recently, our man Gurbanguly, the Turkmen leader, chose China as his go-to country for an extra $4.18 billion loan for the development of South Yolotan, his country’s largest gas field. (The Chinese had already shelled out $3 billion to help develop it.) Energy bureaucrats in Brussels were devastated.  With estimated reserves of up to 14 trillion cubic meters of natural gas, the field has the potential to flood the energy-starved European Union with gas for more than 20 years.  Goodbye to all that?

In 2009, Turkmenistan’s proven gas reserves were estimated at a staggering 8.1 trillion cubic meters, fourth largest in the world after Russia, Iran, and Qatar.  Not surprisingly, from the point of view of Ashgabat, the country’s capital, it invariably seems to be raining gas.  Nonetheless, experts doubt that the landlocked, idiosyncratic Central Asian republic actually has enough blue gold to supply Russia (which absorbed 70% of Turkmenistan’s supply before the pipeline to China opened), China, Western Europe and Iran, all at the same time. 

Currently, Turkmenistan sells its gas to: China via the world’s largest gas pipeline, 7,000 kilometers long and designed for a capacity of 40 billion cubic meters per year, Russia (10 billion cubic meters per year, down from 30 billion per year until 2008), and Iran (14 billion cubic meters per year). Iranian President Mahmoud Ahmadinejad always gets a red-carpet welcome from Gurbanguly, and the Russian energy giant Gazprom, thanks to an improved pricing policy, is treated as a preferred customer. 

At present, however, the Chinese are atop the heap, and more generally, whatever happens, there can be little question that Central Asia will be China’s major foreign supplier of natural gas. On the other hand, the fact that Turkmenistan has, in practice, committed its entire future gas exports to China, Russia, and Iran means the virtual death of various trans-Caspian Sea pipeline plans long favored by Washington and the European Union.

IPI vs. TAPI All Over Again

On the oil front, even if all the “stans” sold China every barrel of oil they currently pump, less than half of China’s daily import needs would be met.  Ultimately, only the Middle East can quench China’s thirst for oil. According to the International Energy Agency, China’s overall oil needs will rise to 11.3 million barrels per day by 2015, even with domestic production peaking at 4.0 million bpd.  Compare that to what some of China’s alternative suppliers are now producing: Angola, 1.4 million bpd; Kazakhstan, 1.4 million as well; and Sudan, 400,000.

On the other hand, Saudi Arabia produces 10.9 million bpd, Iran around 4.0 million, the United Arab Emirates (UAE) 3.0 million, Kuwait 2.7 million — and then there’s Iraq, presently at 2.5 million and likely to reach at least 4.0 million by 2015. Still, Beijing has yet to be fully convinced that this is a safe supply, especially given all those U.S. “forward operating sites” in the UAE, Bahrain, Kuwait, Qatar, and Oman, plus those roaming naval battle groups in the Persian Gulf.

On the gas front, China definitely counts on a South Asian game changer. Beijing has already spent $200 million on the first phase in the construction of a deepwater port at Gwadar in Pakistan’s Balochistan Province. It wanted, and got from Islamabad, “sovereign guarantees to the port’s facilities.” Gwadar is only 400 kilometers from Hormuz. With Gwadar, the Chinese Navy would have a homeport that would easily allow it to monitor traffic in the strait and someday perhaps even thwart the U.S. Navy’s expansionist designs in the Indian Ocean.

But Gwadar has another infinitely juicier future role.  It could prove the pivot in a competition between two long-discussed pipelines: TAPI and IPI. TAPI stands for the Turkmenistan-Afghanistan-Pakistan-India pipeline, which can never be built as long as U.S. and NATO occupation forces are fighting the resistance umbrella conveniently labeled “Taliban” in Afghanistan. IPI, however, is the Iran-Pakistan-India pipeline, also known as the “peace pipeline” (which, of course, would make TAPI the “war pipeline”). To Washington’s immeasurable distress, last June, Iran and Pakistan finally closed the deal to build the “IP” part of IPI, with Pakistan assuring Iran that either India or China could later be brought into the project.

Whether it’s IP, IPI, or IPC, Gwadar will be a key node. If, under pressure from Washington, which treats Tehran like the plague, India is forced to pull out of the project, China already has made it clear that it wants in.  The Chinese would then build a Pipelineistan link from Gwadar along the Karakorum highway in Pakistan to China via the Khunjerab Pass — another overland corridor that would prove immune to U.S. interference.  It would have the added benefit of radically cutting down the 20,000-kilometer-long tanker route around the southern rim of Asia.

Arguably, for the Indians it would be a strategically sound move to align with IPI, trumping a deep suspicion that the Chinese will move to outflank them in the search for foreign energy with a “string of pearls” strategy: the setting up of a series of “home ports” along its key oil supply routes from Pakistan to Myanmar. In that case, Gwadar would no longer simply be a “Chinese” port.

As for Washington, it still believes that if TAPI is built, it will help keep India from fully breaking the U.S.-enforced embargo on Iran. Energy-starved Pakistan obviously prefers its “all-weather” ally China, which might commit itself to building all sorts of energy infrastructure within that flood-devastated country. In a nutshell, if the unprecedented energy cooperation between Iran, Pakistan, and China goes forward, it will signal a major defeat for Washington in the New Great Game in Eurasia, with enormous geopolitical and geo-economic repercussions.

For the moment, Beijing’s strategic priority has been to carefully develop a remarkably diverse set of energy-suppliers — a flow of energy that covers Russia, the South China Sea, Central Asia, the East China Sea, the Middle East, Africa, and South America. (China’s forays into Africa and South America will be dealt with in a future installment of our TomDispatch tour of the globe’s energy hotspots.)  If China has so far proven masterly in the way it has played its cards in its Pipelineistan “war”, the U.S. hand — bypass Russia, elbow out China, isolate Iran — may soon be called for what it is: a bluff.

Pepe Escobar is the roving correspondent for Asia Times.  His latest book is Obama Does Globalistan.  He may be reached at pepeasia@yahoo.com.

Copyright 2010 Pepe Escobar

This story originally appeared at TomDispatch.com.

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The year 2009 was a bad one for the United States. And no, I’m not talking about unemployment, or poverty, or home foreclosures, or banks too-big-to-fail, or any of the other normal bad news. I’m talking about something serious. As the world’s leading maker of things that go bang in the night (and I don’t mean Hollywood films), we took a hit last year. A big one. The planet’s leading arms-maker and dealer — that’s us by a country mile — with a 68.4% cut of the global market in 2008, had the value of its arms deals drop by almost $16 billion in the gloomy economic times of 2009. Consider it a blow to one of the few things Americans do well these days. Fortunately, there was a simpatico country rich enough to bail us out. I’m referring to Saudi Arabia, which is now doing for U.S. arms what the Chinese have long done for U.S. Treasury bills.

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. (And keep in mind that, after years of disastrous war and occupation unleashed by the Bush administration’s 2003 invasion, the American-built Iraqi military may soon offer U.S. arms-makers thanks in the form of major new tank and plane orders.)

Consider it then a rescue package in tight times, part of a spectacle in which the U.S. and some American jobs are being saved from the brink by client states. Consider it part of a larger spectacle of American decline, barely acknowledged in official Washington, something energy expert Michael Klare, author most recently of the invaluable book Rising Powers, Shrinking Planet, has been following for a while. So it’s only appropriate that TomDispatch launches a “Decline of America” week with him writing the first article on the subject. Watch for pieces by Dilip Hiro and me later in the week, and if you have a moment, catch Klare discussing China’s energy superpowerdom on Timothy MacBain’s latest TomCast audio interview by clicking here or, to download it to your iPod, here. Tom

*****

Twenty-First Century Energy Superpower
China, Energy, and Global Power
By Michael T. Klare

If you want to know which way the global wind is blowing (or the sun shining or the coal burning), watch China. That’s the news for our energy future and for the future of great-power politics on planet Earth. Washington is already watching — with anxiety.

Rarely has a simple press interview said more about the global power shifts taking place in our world. 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.

Because energy is tied to so many aspects of the global economy, and because doubts are growing about the future availability of oil and other vital fuels, the decisions China makes regarding its energy portfolio will have far-reaching consequences. As the leading player in the global energy market, China will significantly determine not only the prices we will be paying for critical fuels but also the type of energy systems we will come to rely on. More importantly, China’s decisions on energy preferences will largely determine whether China and the United States can avoid becoming embroiled in a global struggle over imported oil and whether the world will escape catastrophic climate change.

How to Rise to Global Preeminence

You can’t really appreciate the significance of China’s newfound energy prominence if you don’t first grasp the role of energy in America’s rise to global preeminence.

That the northeastern region of the young United States was richly endowed with waterpower and coal deposits was critical to the country’s early industrialization as well as to the North’s eventual victory in the Civil War. It was the discovery of oil in western Pennsylvania in 1859, however, that would turn the U.S. into the decisive actor on the global stage. Oil extraction and exports fueled American prosperity in the early twentieth century — a time when the country was the planet’s leading producer — while nurturing the rise of its giant corporations.

It should never be forgotten that the world’s first great transnational corporation — John D. Rockefeller’s Standard Oil Company — was founded on the exploitation and export of American petroleum. Anti-trust legislation would break up Standard Oil in 1911, but two of its largest descendants, Standard Oil of New York and Standard Oil of New Jersey, were later fused into what is now the world’s wealthiest publicly traded enterprise, ExxonMobil. Another descendant, Standard Oil of California, became Chevron — today, the third richest American corporation.

Oil also played a key role in the rise of the United States as the world’s preeminent military power. This country supplied most of the oil consumed by Allied forces in both World War I and World War II. Among the great powers of the time, the U.S. alone was self-sufficient in oil, which meant it could deploy massive armies to Europe and Asia and overpower the well-equipped (but oil-starved) German and Japanese militaries. Few realize this today, but for the architects of America’s victory in the Second World War, including President Roosevelt, it was the nation’s superior endowment of petroleum, not the atom bomb, that proved decisive.

Having created an economy and military establishment based on oil, American leaders were compelled to employ ever more costly and desperate measures to ensure that both always had an adequate supply of energy. After World War II, with domestic reserves already beginning to shrink, a succession of presidents fashioned a global strategy based on ensuring American access to overseas petroleum.

As a start, Saudi Arabia and the other Persian Gulf kingdoms were chosen to serve as overseas “filling stations” for U.S. refiners and military forces. American oil companies, especially the descendants of Standard Oil, were aided and abetted in establishing a major presence in these countries. To a considerable extent, in fact, the great postwar strategic pronouncements — the Truman Doctrine, the Eisenhower Doctrine, the Nixon Doctrine, and especially the Carter Doctrine — were all tied to the protection of these “filling stations.”

Today, too, oil plays a critical role in Washington’s global plans and actions. The Department of State, for example, still maintains an elaborate, costly, and deeply entrenched military capability in the Persian Gulf to ensure the “safety” and “security” of oil exports from the region. It has also extended its military reach to such key oil-producing regions as the Caspian Sea basin and western Africa. The need to retain friendly ties and military relationships with key suppliers like Kuwait, Nigeria, and Saudi Arabia continues to dominate U.S. foreign policy. Similarly, in a globally warming world, a growing American interest in the melting Arctic is being propelled by a desire to exploit the polar region’s untapped hydrocarbon reserves.

Planet Coal?

The fact that China has now overtaken the United States as the world’s leading energy consumer is bound to radically alter its global policies, just as energy predominance once did America’s. No doubt this will, in turn, alter the course of Sino-American relations, not to speak of world affairs. With the American experience in mind, what can we expect from China?

As a start, no one reading newspaper business pages could have any doubt that Chinese leaders view energy as a — possibly the — major concern of the country and have been devoting substantial resources and planning to the procurement of adequate future supplies. In addressing this task, Chinese leaders face two fundamental challenges: securing sufficient energy to meet ever-rising demand and deciding which fuels to rely on in satisfying these requirements. How China responds to these challenges will have striking implications on the global stage.

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.

Although most of the country’s energy funds are still expended domestically, what it spends on imported fuels (oil, coal, natural gas, and uranium) and energy equipment (oil refineries, power plants, and nuclear reactors) will significantly determine the global price of these items — a role that, until now, has been largely filled by the United States. More important, however, will be the decisions China makes about the types of energy it will come to rely on.

If Chinese leaders were to follow their natural inclinations, they would undoubtedly avoid relying on imported fuels altogether, given how vulnerable foreign-energy dependence can make a country to overseas supply disruptions or, in China’s case, a possible U.S. naval blockade (in the event, say, of a prolonged conflict over Taiwan). Li Junfeng, a senior Chinese energy official, was recently quoted as saying, “Energy supply should be where you can plant your foot on it” — that is, from domestic sources.

China does possess one kind of fuel in abundance: coal. According to the most recent DoE projections, coal will make up an estimated 62% of China’s net energy supply in 2035, only slightly less than at present. A heavy reliance on coal, however, will exacerbate the country’s environmental problems, dragging down its economy as health-care costs mount. In addition, thanks to coal, China is now the world’s leading emitter of climate-altering carbon dioxide. According to the DoE, China’s share of global carbon-dioxide emissions will jump from 19.6% in 2005, when it barely trailed the U.S. at 21.1%, to 31.4% in 2035, when it will tower over all other countries in net emissions.

As long as Beijing refuses to significantly reduce its reliance on coal, ignore its rhetoric on global-warming negotiations. It simply won’t be able to take truly meaningful steps to address climate change. In this way, too, it will alter the face of the planet.

Recently, the country’s leaders seem to have become far more sensitive to the risks of excessive reliance on coal. Massive emphasis is now being placed on the development of renewable energy systems, especially wind and solar power. Already, China has become the world’s leading producer of wind turbines and solar panels, and has already begun exporting its technology to the United States. (Some economists and labor unions, in fact, claim that China is unfairly subsidizing its renewable-energy exports in violation of World Trade Organization rules.)

China’s growing emphasis on renewable energy would be good news, if it resulted in substantial reductions in coal use. At the same time, the country’s drive to excel at these techniques could push it into the forefront of a technological revolution, just as early American dominance of petroleum technology propelled it to the front ranks of world powers in the twentieth century. If the United States fails to keep pace, it could find the pace of its decline as a world power quickening.

Whose Saudis Are They?

China’s thirst for added energy could also lead quickly enough to friction and conflict with the United States, especially in the global competition for increasingly scarce supplies of imported petroleum. As its energy use ramps ever upward, China is using more oil, which can only lead to greater political economic, political, and someday possibly even military involvement in the oil-producing regions — areas long viewed in Washington as constituting America’s private offshore energy preserves.

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.) Whatever the year, China’s leaders are already enmeshed in the same power “predicament” long faced by their American counterparts, dependent as they are on a vital substance that can only be acquired from a handful of unreliable producers in areas of chronic crisis and conflict.

At present, China obtains most of its imported oil from Saudi Arabia, Iran, Angola, Oman, Sudan, Kuwait, Russia, Kazakhstan, Libya, and Venezuela. Eager to ensure the reliability of the oil flow from these countries, Beijing has established close ties with their leaders, in some cases providing them with significant economic and military assistance. This is exactly the path once taken by Washington — and with some of the same countries.

China’s state-controlled energy firms have also forged “strategic partnerships” with counterpart enterprises in these countries and in some cases acquired the right to develop major oil deposits as well. 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.

Much of this should sound exceedingly familiar. After all, the United States once wooed the Saudis in a similar way when Washington first began viewing the kingdom as its overseas filling station and turned it into an unofficial military protectorate. In 1945, while World War II still raged, President Roosevelt made a special trip to meet with King Abdul Aziz of Saudi Arabia and establish a protection-for-oil arrangement that persists to this day. Not surprisingly, American leaders don’t see (or care to recognize) the analogy; instead, top officials look askance at the way China is poaching on U.S. turf in Saudi Arabia and other petro-states, portraying such moves as antagonistic.

As China’s reliance on these overseas suppliers grows, it is likely to bolster its ties with their leaders, producing further strains in the international political environment. Already, Beijing’s reluctance to jeopardize its vital energy links with Iran has frustrated U.S. efforts to impose tough new economic sanctions on that country as a way of forcing it to abandon its uranium-enrichment activities. Likewise, China’s recent loan of $20 billion to the Venezuelan oil industry has boosted the status of President Hugo Chávez at a time when his domestic popularity, and so his ability to counter U.S. policies, was slipping. The Chinese have also retained friendly ties with President Omar Hassan Ahmad al-Bashir of Sudan, despite U.S. efforts to paint him as an international pariah because of his alleged role in overseeing the massacres in Darfur.

Arms-for-Oil Diplomacy on a Dangerous Planet

Already, China’s efforts to bolster its ties with its foreign-oil providers have produced geopolitical friction with the United States. There is a risk of far more serious Sino-American conflict as we enter the “tough oil” era and the world supply of easily accessible petroleum rapidly shrinks. According to the DoE, the global supply of oil and other petroleum liquids in 2035 will be 110.6 million barrels per day – precisely enough to meet anticipated world demand at that time. Many oil geologists believe, however, that global oil output will reach a peak level of output well below 100 million barrels per day by 2015, and begin declining after that. In addition, the oil that remains will increasingly be found in difficult places to reach or in highly unstable regions. If these predictions prove accurate, the United States and China — the world’s two leading oil importers — could become trapped in a zero-sum great-power contest for access to diminishing supplies of exportable petroleum.

What will happen under these circumstances is, of course, impossible to predict, especially since the potential for conflict abounds. If both countries continue on their current path — arming favored suppliers in a desperate bid to secure long-term advantage — the heavily armed petro-states may also become ever more fearful of, or covetous of, their (equally well-equipped) neighbors. With both the U.S. and China deploying growing numbers of military advisers and instructors to such countries, the stage could be set for mutual involvement in local wars and border conflicts. Neither Beijing nor Washington may seek such involvement, but the logic of arms-for-oil diplomacy makes this an unavoidable risk.

It is not hard, then, to picture a future moment when the United States and China are locked in a global struggle over the world’s remaining supplies of oil. Indeed, many in official Washington believe that such a collision is nearly inevitable. “China’s near-term focus on preparing for contingencies in the Taiwan Strait… is an important driver of its [military] modernization,” the Department of Defense noted in the 2008 edition of its annual report, The Military Power of the People’s Republic of China. “However, analysis of China’s military acquisitions and strategic thinking suggests Beijing is also developing capabilities for use in other contingencies, such as a conflict over resources…”

Conflict over planetary oil reserves is not, however, the only path that China’s new energy status could open. It is possible to imagine a future in which China and the United States cooperate in pursuing oil alternatives that would obviate the need to funnel massive sums into naval and military arms races. President Obama and his Chinese counterpart, Hu Jintao, seemed to glimpse such a possibility when they agreed last November, during an economic summit in Beijing, to collaborate in the development of alternative fuels and transportation systems.

At this point, only one thing is clear: the greater China’s reliance on imported petroleum, the greater the risk of friction and conflict with the United States, which relies on the same increasingly problematic suppliers of energy. The greater its reliance on coal, the less comfortable our planet will become. The greater its emphasis on alternative fuels, the more likely it may make the twenty-first century China’s domain. At this point, how China will apportion its energy needs among the various candidate fuels remains unknown. Whatever its choices, however, China’s energy decisions will shake the world.

Michael T. Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of Rising Powers, Shrinking Planet. His previous book, Blood and Oil, was made into a documentary film and is available at bloodandoilmovie.com. To catch Klare discussing China’s energy superpowerdom on Timothy MacBain’s latest TomCast audio interview, click here or, to download it to your iPod, here.

Copyright 2010 Michael T. Klare