Oil Storms

GWB’s war in Iraq may not be going as planned. But for those who’ve stopped believing the myth that prewar Iraq represented any sort of threat to the United States, there is plenty of circumstantial evidence mounting that the real reason for the American invasion of Iraq was the most obvious one: Oil. In this case, “oil” doesn’t mean that we went to war for the commercial benefit of U.S. oil companies—and in fact, most U.S. oil firms and their executives were against the war.

But in Iraq, “oil” means the strategic commodity that is the single most important world resource. Even a novice geostrategist knows that who controls oil controls the world. And in this case, America’s rival for control of oil is, first and foremost, China.

Two weeks ago, China, Russia and four Central Asian “Stans,” including Uzbekistan, rather impolitely asked the United States to withdraw from Central Asia. That part of the world is a significant oil and gas region, and neither Moscow nor Beijing want the United States to put down roots there. But Central Asia’s oil and gas resources pale next to the Middle East, and that is where America’s imperial presence has set off alarms in Beijing.

Until recently, China's view of the global energy map focused narrowly on the Middle East, which holds roughly two-thirds of the world's oil. Special attention was directed toward one well-supplied country: Iraq. Through cultivation of Saddam Hussein's government, China sought to develop some of Iraq's more promising reserves. Beijing advocated lifting the United Nations sanctions that prevented investment in Iraq's oil patch and limited sales of its production.

Then the United States went to war in Iraq in 2003, wiping out China's stakes. The war and its aftermath have reshaped China's basic conception of the geopolitics of oil and added urgency to its mission to lessen dependence on Middle East supplies.

It has reinforced China's fears that it is locked in a zero-sum contest for energy with the world's lone superpower, prompting Beijing to intensify its search for new sources, international relations and energy experts say.
A June 24 New York Times article subtly attacked China and its CNOOC oil firm over its bid to buy Unocal, a U.S. oil company with long experience in Asia, calling the intended purchase (in its page-one headline) a “costly quest for energy control.”
But if any nation “controls” energy, it is the United States. Meanwhile, neoconservatives, Bush administration officials, some members of Congress and a few labor-connected liberals are making a big deal of CNOOC’s Unocal bid.

For perspective, let’s recall that Unocal is the company that did more to support the Taliban than any other U.S. entity, courting those Islamic radicals in search of a pipeline, oil and gas deal in central Asia—and hiring various malleable U.S. strategists to support the Taliban on its behalf, including incoming U.S. ambassador to Iraq, Zalmay Khalilzad. It’s hard to imagine anything that China could do with Unocal that would do more damage to U.S. interests than Unocal has already done.

Still, the outcry goes on, most recently during a congressional hearing at which Jim Woolsey, the former CIA director, and Frank Gaffney, the neocon-linked military strategist, railed against China. (CNOOC, btw, is partly owned by Shell Oil, which bought a big chunk of the mostly state-owned firm when it conducted a public stock offering in 2002.)

According to the U.S. Energy Information Administration, road transportation in China will be the driving force for that country’s enormous oil appetite in the next two decades, noting that “the Chinese passenger car market grew tenfold between 1990 and 2000.” By 2025, says EIA, China’s oil demand will reach nearly 13 million barrels of oil per day. (Saudi Arabia’s entire output is only about 8 million barrels a day-now!.)