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.
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