China's oil use is changing world energy markets

[charrison]

Linkage

With its factories working overtime, and its consumers on course to buy almost two million cars this year, China is developing a world-class thirst for oil. And its hunt for steady supplies is reshaping the global energy scene.

China this year surpassed Japan as the No. 2 petroleum user after the United States. It is increasing its oil purchases even faster than it is pumping up its brawny economy. Imports for the first 10 months of 2003 were up 30 percent from year-earlier levels. The International Energy Agency expects imports to double to some four million barrels a day by 2010. By 2030, China is expected to be importing about 10 million barrels a day, roughly what the United States does now. Domestic oil output, meanwhile, is flat.

From Houston to London to Moscow, oil companies are looking to secure market share in China, as China roams the world looking for oil fields to develop. And strategists are struggling to predict what China's rise as a super-buyer will mean for the oil market, the environment, and world politics. Some fear that China, which doesn't have large strategic reserves of fuel, might grow so desperate for oil that it would battle the United States for influence in the Middle East or even trade weapons technology to alleged terrorist states. Others are more optimistic, and think China will realize it has a vital interest in keeping the region stable.

"China is having an incredible influence on energy flows, not just in Asia but on a world-wide basis," Peter Davies, chief economist at BP PLC, told reporters on a recent trip to Russia, from where BP hopes to supply China with Siberian gas. "The whole center of gravity of the world energy market is changing."

Looks like that brown cloud around china is only going to get worse. Good thing Kyoto wants nothing to do with china.

 

[dmcowen674]

But the War is not for Oil, the U.S. has no interest there.

 

[XMan]

A more pertinent question is, does China start to seek out oil resources of its own? The Spratly's are just around the corner, and there's a some historical significance to those islands within their culture.

 

[Martin]

I wonder how long before china claims Indonesia has WMDs and invades.

 

[Dari]

Originally posted by: MartyTheManiak
I wonder how long before china claims Indonesia has WMDs and invades.

Whatever. The regime change in Iraq, stabilization of Central Asia, democratic reform in Russia, and democratic reform in Iran and her arab neighbors all bode well for energy security for the new century.

 

[Ldir]

Originally posted by: Dari

Originally posted by: MartyTheManiak
I wonder how long before china claims Indonesia has WMDs and invades.

Whatever. The regime change in Iraq, stabilization of Central Asia, democratic reform in Russia, and democratic reform in Iran and her arab neighbors all bode well for energy security for the new century.

This message authorized by the Bush Apologists of America (BAA). Pulling the wool over America's eyes since 1980.

You left out American. "bode well for energy security for the New American Century." BAA BAA BAA

 

[Witling]

Dari, how is that Middle East stabilization going? Looks more uncertain and chaotic to me. And you know Bush has said we're going to start rapping the hands of countries that aren't toeing the democratic line. The part I found more interesting in the full article was.

" Last year, the Pentagon reviewed a report on what it would mean for U.S. national security if the Chinese and Saudis grew closer. Saudi Arabia, the world's largest exporter, is negotiating to build a huge refinery in China with ExxonMobil Corp. The desert kingdom even has begun giving Chinese-language lessons to its oil officials."

The fact that 19 of the hijackers were Saudis and the Bush statement about democracy (a worthy and overdue statement in my opinion) mean that the Saudis will be looking around for new friends. They are strengthening ties with Iran too.

 

[Dari]

Originally posted by: Whitling
Dari, how is that Middle East stabilization going? Looks more uncertain and chaotic to me. And you know Bush has said we're going to start rapping the hands of countries that aren't toeing the democratic line. The part I found more interesting in the full article was.

" Last year, the Pentagon reviewed a report on what it would mean for U.S. national security if the Chinese and Saudis grew closer. Saudi Arabia, the world's largest exporter, is negotiating to build a huge refinery in China with ExxonMobil Corp. The desert kingdom even has begun giving Chinese-language lessons to its oil officials."

The fact that 19 of the hijackers were Saudis and the Bush statement about democracy (a worthy and overdue statement in my opinion) mean that the Saudis will be looking around for new friends. They are strengthening ties with Iran too.

My answer is simple: Which would you like?
Transformation
Transplacement or
Replacement

At the moment, we have a delicate transplacement going on. It's delicate because outside forces are pressuring the locals to go through some dramatic changes. Replacement would be too strong of a medicine, unless it is in dire need (Iraq is a primary example)
Transformation would've been a top-down approach that would've also disturbed the energy markets.

IMHO, so long as the arabs (who are in good standing with the international community) bring about reform within a timeframe that is acceptable to their constituents, then I'm satisfied.

As for China, so long as she plays by the rules, then there's no reason for anyone to get their panties in a bunch.

 

[Dari]

Originally posted by: Ldir

Originally posted by: Dari

Originally posted by: MartyTheManiak
I wonder how long before china claims Indonesia has WMDs and invades.

Whatever. The regime change in Iraq, stabilization of Central Asia, democratic reform in Russia, and democratic reform in Iran and her arab neighbors all bode well for energy security for the new century.

This message authorized by the Bush Apologists of America (BAA). Pulling the wool over America's eyes since 1980.

You left out American. "bode well for energy security for the New American Century." BAA BAA BAA

You make it sound like what I said is a bad thing. Odd, the pinkos will bitch when the country is aligned with despotic dictators. They'll also bitch if you want democratic reform in those countries. What a bunch of stupid and frustrated hypocrites.

 

[Witling]

Dari, when you say, "The answer is simple." and then give three alternatives, the answer is not simple. Simple is one choice.

 

[Dari]

Originally posted by: Whitling
Dari, when you say, "The answer is simple." and then give three alternatives, the answer is not simple. Simple is one choice.

well, I give you three stark options to your take of the current mid-east situation. when you claimed that things were going badly, I asked what options you'd preferred: from outright revolution to a smooth transition, despite the bombings?

In essence, you were bitching. To calm you, I showed you the alternatives.

 

[Witling]

OK, Dari. You answer my question with a question. I'll see you and raise you. I don't think I understand what you mean by

Transformation
Transplacement or
Replacement

You mention that there's a transformation going on. I don't know wht you mean by that. A little (and I'm sure that's all there will be) explnation of the three terms might help me choose.

 

[charrison]

Originally posted by: Whitling
OK, Dari. You answer my question with a question. I'll see you and raise you. I don't think I understand what you mean by

Transformation
Transplacement or
Replacement

You mention that there's a transformation going on. I don't know wht you mean by that. A little (and I'm sure that's all there will be) explnation of the three terms might help me choose.

He means political reform(transformation) is happening now.

 

[Witling]

And transplacement and replacement mean?

 

[Dari]

Originally posted by: Whitling
OK, Dari. You answer my question with a question. I'll see you and raise you. I don't think I understand what you mean by

Transformation
Transplacement or
Replacement

You mention that there's a transformation going on. I don't know wht you mean by that. A little (and I'm sure that's all there will be) explnation of the three terms might help me choose.

Transformation: when the old regime controls the speed and character of the change
Transplacement: when a strong opposition compels a regime to accept fundamental changes in the political system
Replacement: where an opposition is strong enough to sweep the old regime from power

Replacement is more radical than Transplacement which is more radical than Transformation

 

[MadRat]

A quarter million soldiers in the region says that U.S. interests are well protected.

 

[GrGr]

China has been looking for a pipeline to the Caspian/Mid East region for quite some time now. US troops in Afghanistan is not going to make it easier for them to get the oil.

Also note that the US supported the regime change in Georgia.

Another thing to keep in mind when it comes to the overall picture of oil is that Putin had Khodorkovsky arrested. Khodorkovsky was the head of Yukos, the most western friendly oilcompany in Russia. Putin is just as much, if not more, in the pocket of BigOil (the Russian BigOil, of course) as Bush is in the pocket of US BigOil.

 

[rchiu]

Originally posted by: Dari

Originally posted by: Whitling
Dari, how is that Middle East stabilization going? Looks more uncertain and chaotic to me. And you know Bush has said we're going to start rapping the hands of countries that aren't toeing the democratic line. The part I found more interesting in the full article was.

" Last year, the Pentagon reviewed a report on what it would mean for U.S. national security if the Chinese and Saudis grew closer. Saudi Arabia, the world's largest exporter, is negotiating to build a huge refinery in China with ExxonMobil Corp. The desert kingdom even has begun giving Chinese-language lessons to its oil officials."

The fact that 19 of the hijackers were Saudis and the Bush statement about democracy (a worthy and overdue statement in my opinion) mean that the Saudis will be looking around for new friends. They are strengthening ties with Iran too.

My answer is simple: Which would you like?
Transformation
Transplacement or
Replacement

At the moment, we have a delicate transplacement going on. It's delicate because outside forces are pressuring the locals to go through some dramatic changes. Replacement would be too strong of a medicine, unless it is in dire need (Iraq is a primary example)
Transformation would've been a top-down approach that would've also disturbed the energy markets.

IMHO, so long as the arabs (who are in good standing with the international community) bring about reform within a timeframe that is acceptable to their constituents, then I'm satisfied.

As for China, so long as she plays by the rules, then there's no reason for anyone to get their panties in a bunch.

What rules are you talking about, like invading a soverign country and force a regime change because it fits your national (economic, security or whatever) interest?

I mean what is stopping China from claiming Iran's nuclear weapon represents a clear and present danger to them and invade them to establish a friendly government that will sell them oil cheaply after the fine example set by the American?

 

[MadRat]

Originally posted by: rchiu
I mean what is stopping China from claiming Iran's nuclear weapon represents a clear and present danger to them and invade them to establish a friendly government that will sell them oil cheaply after the fine example set by the American?

Its lack of strategic military capacity.

 

[Dari]

Originally posted by: rchiu

Originally posted by: Dari

Originally posted by: Whitling
Dari, how is that Middle East stabilization going? Looks more uncertain and chaotic to me. And you know Bush has said we're going to start rapping the hands of countries that aren't toeing the democratic line. The part I found more interesting in the full article was.

" Last year, the Pentagon reviewed a report on what it would mean for U.S. national security if the Chinese and Saudis grew closer. Saudi Arabia, the world's largest exporter, is negotiating to build a huge refinery in China with ExxonMobil Corp. The desert kingdom even has begun giving Chinese-language lessons to its oil officials."

The fact that 19 of the hijackers were Saudis and the Bush statement about democracy (a worthy and overdue statement in my opinion) mean that the Saudis will be looking around for new friends. They are strengthening ties with Iran too.

My answer is simple: Which would you like?
Transformation
Transplacement or
Replacement

At the moment, we have a delicate transplacement going on. It's delicate because outside forces are pressuring the locals to go through some dramatic changes. Replacement would be too strong of a medicine, unless it is in dire need (Iraq is a primary example)
Transformation would've been a top-down approach that would've also disturbed the energy markets.

IMHO, so long as the arabs (who are in good standing with the international community) bring about reform within a timeframe that is acceptable to their constituents, then I'm satisfied.

As for China, so long as she plays by the rules, then there's no reason for anyone to get their panties in a bunch.

What rules are you talking about, like invading a soverign country and force a regime change because it fits your national (economic, security or whatever) interest?

I mean what is stopping China from claiming Iran's nuclear weapon represents a clear and present danger to them and invade them to establish a friendly government that will sell them oil cheaply after the fine example set by the American?

I'm talking about international law. Iraq broke it and she was firmly dealt with. Iran, too, is breaking international law. But China can't handle her. Plus, Western nations won't accept Chinese soldiers so close to home. And she doesn't even have the capacity. Watching the Iranians fight the Chinese without any international support would be an absolute slaughterhouse...for the chinese.

 

[rjain]

Originally posted by: GrGr

Another thing to keep in mind when it comes to the overall picture of oil is that Putin had Khodorkovsky arrested. Khodorkovsky was the head of Yukos, the most western friendly oilcompany in Russia.

This is not necessarily true. Many analysts see that this move was an attempt to show the US that Russia is committed to being an unrestricted supplier of oil to the US, free from collusion with the rest of OPEC. I can't find the article where I read this, tho... I have a feeling it was on realmoney.com or thestreet.com...

 

[tnitsuj]

Rumor has it that China is pressing Russia to tie its oil exports to the Euro rather than the dollar. Similar pressure is being exerted in OPEC, but that is much less likely to happen.

 

[Dari]

Originally posted by: tnitsuj
Rumor has it that China is pressing Russia to tie its oil exports to the Euro rather than the dollar. Similar pressure is being exerted in OPEC, but that is much less likely to happen.

That wouldn't make any sense since the chinese currency is loosely tied to the dollar. If the russians succumbed to the chinese, their oil prices would fluctuate much more.

 

[Witling]

Boy, for a guy who remembers when China was pretty much a client state of the Soviet Union, a statement like "Rumor has it that China is pressing Russia to tie its oil exports to the Euro rather than the dollar." is an astonishing statement -- although I think it is modern reality.

Dari posted the definitions for Transformation, Transplacement, and Replacement. Thank you! I was unaware of these terms but the do seem useful in analyzing large changes in political positions.

 

[rjain]

Whitling: But, as Dari just said, the Yuan is tied to the Dollar. If it's in our favor to price oil in Dollars, it's in China's favor, too.