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Rowan Wolf


The oiligarchy is narrowing down to the biggest consumer and the fastest growing competitor - The United States and China. I have been watching China boom and sneak into the news, it is clear that China has entered a head to head competition with the US over resources, and particularly over global oil supplies. China is making oil deals with virtually everyone Russia, Canada, Nigeria, Australia, OPEC, Venezuela ... Where there is oil (or gas) there is China ... and ... the United States.

While it is clear that China is not masking its moves to protect its interests, those moves are generating a more public response than they have in the past. With CNOOC's bid for Unocal, they crossed a public line the US cannot ignore. Now that imaginary line is crossed, China is a daily inclusion in the US mainstream press. Mark Magnier's LA Times headline reads " China Stakes a Claim for Major Access to Oil Around the World" (7/17/05). He details some of the activities of the Chinese government:

"During the last two years, President Hu Jintao and Premier Wen Jiabao have taken oil executives on trips to oil-rich countries from Algeria to Uzbekistan to seal major deals. The government in Beijing has welcomed top officials from all 11 members of the Organization of the Petroleum Exporting Countries. A major point of a trip Hu made to Moscow this month was to secure access to Russia's vast reserves.

Chinese crews are building roads in Africa in exchange for the right to extract oil from remote regions. Viewers in Saudi Arabia, a nation that U.S. oil firms once had to themselves, now watch Chinese programs on satellite TV as China drills into Saudi sands. China is also taking advantage of tensions between the Bush administration and Venezuelan President Hugo Chavez to wrest oil from one of the largest U.S. suppliers.

To secure deals worth tens of billions of dollars, Beijing is cozying up to regimes in nations, including Iran and Sudan, that Washington labels pariahs. And it is flexing its military muscle to lay claim to contested fields in East Asia."

Little surprise that he concludes what many of us concluded long ago - "China's aggressive search is putting it in growing competition with the United States, the world's largest oil consumer. Some observers even warn of a possible showdown between the two economic giants.."

Of course, China has nicely maneuvered the United States into a ticklish situation by funding Bush's massive debt, and placing the US consumer economy right in China's hands with its success in attracting corporations to use China as an industrial base.

But why, all of the sudden, is China being so "in your face" about its oil strategy? Is it simply because China's oil and gas consumption have exceeded their domestic supplies? Is it simply the shifting forces of global economic power? Or did something happen to stimulate this surge in competition? Well, it seems entirely possible it is the latter, and that "triggering event" could well have been Iraq.

Protests of "freeing the people of Iraq" to the side, it has always been clear that the heart of US (and other nation's) interest in Iraq is oil. What has not been talked about much is China's interest in Iraq oil. This topic has breached the corporate press with Peter Goodman's July 13, 2005 Washington Post article Big Shift in China's Oil Policy - With Iraq Deal Dissolved by War, Beijing Looks Elsewhere."

"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."

He continues:

"The Iraq war substantially intensified the foreign push. Most immediately, it destroyed China's hopes of developing large assets in Iraq. China had been waiting for the end of sanctions to begin work on the Al-Ahdab field in central Iraq, under a $1.3 billion contract signed in 1997 by its largest state-owned firm, China National Petroleum Corp. The field's production potential has been estimated at 90,000 barrels a day. China was also pursuing rights to a far bigger prize -- the Halfayah field, which could produce 300,000 barrels a day. Together, those two fields might have delivered quantities equivalent to 13 percent of China's current domestic production. "

Where Goodman doesn't go, is the logical continuation of the argument - that the US invaded Iraq to block China's influence with Hussein.

With the U.S. invasion of Iraq, the oil companies effectively stood in the White House. "Regime change" opened direct access to US-based oil companies to capture the oil of Iraq - and they have. The Iraq war has been an unimaginable bonanza for the U.S. Military - Industrial Complex. Winners everywhere (except Iraqi's) and lots of money floating around to be scooped by the unscrupulous - all of the Iraq oil revenues before the CPA (Coalition Provisional Authority) went out of power, or some $20 billion plus dollars evaporated.

One could argue similar impetus in the invasion of Afghanistan and gas pipelines to Asia - now under largely US control.

It is not at all surprising that China might discern (or interpret) the moves of the United States in both Asia and the Middle East as a direct threat to its interests - or even to "friendly" competition. What started as China making resource deals with oil and gas producing nations has turned into a scramble for control - and for "allies."

The partnerships that China is making are more than resource deals. China has had joint military "games" with Pakistan, India, and Russia. It is making broader trade and relationship deals with Canada and Australia. Nations that the US has had relatively strong ties with are being pulled dramatically into China's sphere of influence, and this could cause dramatic realignments in geo-political stability. Combine this with growing US debt - and the funneling of money into militarizing space - old "friends" could end up aligned with China against the United States.

Bush labeled his aggression as a "war on terrorism" after 9/11/01 and announced that said war would go on for generations. Indeed. There is also growing pressure in the US to extricate the US military presence from Iraq. Somehow, despite rumors that there is a " Secret Plan To Quit Iraq," I seriously doubt that will happen unless there is a plan in place to secure Iraq's oil for the U.S. and Britain.

So the competition is on for an oiligarchy and it doesn't look like either China or the US are willing to share that headship. Of course, underlying all of this is the cause that dare not be mentioned - peak oil. If there were limitless oil reserves, then there wouldn't be a competition. But world leaders have known for decades that oil and gas were not limitless which has been the underpinning of many covert and proxy wars.

Rowan Wolf is a columnist for Project for the Old American Century,  
and the editor of Radical Noesis and Uncommon Thought Journal . 
Her email is [email protected]

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