OIL & the World's Energy Future --- Part One: "CHINA, the U.S., those smaller 'demand-nations' & ' a diminishing supply-side.'"

Posted in Other | 27-Sep-04 | Author: Marvin Leibstone| Source: Global Security & Trade Journal

CHINA's annual Gross Domestic Product growth-rate has been increasing steadily above seven percent. If this continues, China will come close to equaling the economic wealth of the U.S. and surely impacting the rest of the world and 'tomorrow,' case in point: 'China and petroleum access, and that our planet's oil-availability will likely peak before 2020 and begin an irreversible fuel-depletion era as demand for oil increases substantially.'

ACCORDING to recent coverage by National Geographic Magazine writer, Tim Appenzeller, China had less than 30,000 automobiles in the latter years of the Cold War, and now has more than two million largely from a greater than 65 percent increase in vehicle ownership since 2002. With its GDP still rising, there will be many more millions of gasoline-powered land vehicles in China 16 years from now. As inferred from Appenzeller's report, by comparing today's U.S. figure of (a) three gallons of fuel used daily by each of around 240 million Americans, with (b) the same number of gallons consumed daily by each of more than one billion Chinese in 2020, reflected is a small and thirsty lone eagle next to a gathering of dehydrating pandas at a water-hole where it no longer rains. And, U.S. fuel dependency is forecasted for nearly 52 percent growth between now and 2020, without any projected significant increases in gas mileage for most privately owned vehicles. Too, China's increasingly wealthy population will soon have many more homes needing fuel for heat.

WHERE, then, will China and the U.S. keep getting their oil? Right now, Beijing diplomats are seeking an answer in the Middle East. It isn't only from a belief system that Beijing had been against an anti-Iraq invasion in 2003 and has kept a low profile regarding Israeli and Palestinian differences, also conducting arms sales to Iran and Syria. Like the U.S., Beijing is seeking future oil in the Middle East and other locations where within a decade the availability of such will flow with many stark reminders of 'the law of entropy.'

THE China/Middle East example is one of many. According to analysts, there will be oil shortages for nations everywhere before the most advanced R&D for alternative energy sources could intervene and cause the problem to go away easily. As author Appenzeller points out, oil thirst has made the U.S. today's number one petroleum-costumer, paying nearly half for it per gallon than the rest of the world because of a large volume of purchases (more than 25 percent of deliverable 'crude'). Appenzeller's report implies that the U.S. could be paying less for oil if the world's second largest and non-Middle East oil supplier, Russia, were to oversupply at prices cheaper than exist today, which would hasten the decline of oil reserves world-wide via competition, and which, since Russia has less in the ground than Saudi Arabia, would eventually force customers back into dependency on Saudi Arabia for its 'crude,' again paying higher prices for the only game in town. Another worry---nearly all major oil-supplying territories are, by any standard, politically unstable, e.g., the Middle East/Persian Gulf region, Africa, Venezuela. One has to ask, "Would a democratic Iraq managing its oil reserves responsibly be a boon to the U.S. and its allies, and to China?" Certainly, argue most oil experts, for Iraq has potential for remaining among the world's top three oil providers.

THE oil deficiency problem won't be going away unless the U.S. and other major end-users and providers think of ways to champion development of a comprehensive world energy policy that combines intensified international explorations for new petroleum sources with searches for alternative energy forms (fuel-cell; clean coal; wind; solar, et. al), equally with enhanced energy conservation and with more fair and better-regulated global energy distribution means.

SO, a good way to begin is with a more serious examination by the White House and the U.S. Congress of proposals for a global energy policy offered by the Washington-D.C.-based 'U.S. Energy Association (USEA).'

(Part Two, 'USEA's Global Energy Policy Proposals,' November 2004 issue of GS&TJ). END/ml

This article has been taken from "Global Security & Trade Journal".