Friday, May 19, 2006

Red Scare or Red Herring?

With the energy crisis that is rapidly speeding towards America, indeed the whole world, there is a rush to politicize fossil fuels, as well as mounting international competition for those resources. Energy security and energy politics are the new buzzwords for governments everywhere. Russia was recently accused by Vice President Cheney of using their energy reserves as “tools of manipulation or blackmail.” Evo Morales, Bolivia’s new President, decided to nationalize their natural gas reserves, calling it, “a historic day in which Bolivia retakes absolute control of [Bolivia’s] natural resources.” For the United States, however, there is a single, primary competitor in the world of energy resources. The world’s largest fossil fuel user, it seems, is entering a direct confrontation with China, the world’s fastest-growing fossil fuel user. This competition is setting the stage for energy policies for decades to come, and unfortunately there exists a blindness associated with this duel that makes for bad politics, grandstanding, and a deflection from some of the real issues and solutions. Politicians have used China’s recent energy-gathering measures as a kind of new scare of Communist domination, when 1) China is merely playing the US’s game, and winning; and 2) there are more important solutions to be focused upon for our energy issues.

The first salvo fired in the energy wars between the two behemoths occurred last year, when the Chinese firm CNOOC Ltd. put in a bid for an American oil company, Unocal Corp. The bid, in good capitalist fashion, beat out a competitive offer from Chevron Corp. by over $2 billion. However, the deal was squashed. Why? Pressure from American politicians, worrying about the implications that China may be consolidating oil futures for itself, construed the take-over bid as a hostile maneuver against American national security. It drew immediate fire from politicians of all sorts, even prompting a threat of an investigation by the Committee on Foreign Investment in the United States (CFIUS), a secretive committee designed to investigate whether or not foreign takeovers and investments constitutes a threat to our national security. This would have been the first time CFIUS would be reviewing a natural resource company. Skeptics wondered about the true threat the bid posed. James Lewis, a technology transfer expert at the Center for Strategic and International Studies, said “From a security perspective, it’s as much of a threat as when the Japanese purchased [New York’s] Rockefeller Center.” There was nothing untoward about the deal from the Chinese company (which was ultimately withdrawn in the face of such pressure). In reality, it was just good capitalism that was squashed by protective political maneuvers. This is not such new news for the United States, as protectivism has been documented in this administration towards the Vietnamese fishing industry, international steel industry, and others.

The rhetoric escalated this past week when Cuba announced that it was opening up a portion of its territory on the Florida Straits to offshore drilling – with China being one of the main bidders to attract the contract. China was not the only country negotiating the leases to drill off of Cuba’s coast; India, Spain, and Canada were also represented in the company’s agreements. This land is thought to hold a fair amount of oil and natural gas, commodities that are undoubtedly important given the instability in the Middle East, decreased American domestic production of oil, and rising demand worldwide. Politicians in the United States were quick to jump on the anti-China protectionist bandwagon. Senator Larry E. Craig, R-ID, even made a compliment which smacks of Cold War fear-mongering, saying “Red China should not be left to drill for oil within spitting distance of our own shores without competition from US industries.” Red China? Excuse me? Are we still stuck in the 70s here?

The rising concerns over energy, its availability and its pricing, has led politicians to use this as a new weapon to attack other governments, especially China. Yet nothing that China is doing is so unlike what other nations, the United States included, has done in the past to secure energy futures. Britain spent decades trying to subvert efforts for Iran to become a free nation with U.S. assistance. The companies of the United States hold oil development land rights across the globe, including Libya (not exactly the most U.S.-friendly nation), Venezuela, Australia, and more. China is asserting itself on the global scale now; they are stepping up and trying to secure their energy to ensure their future development. To use such trite phrases to intimidate them, or to spur anti-competitive action, is childish at best.

No, these observations are inherently counterproductive to developing a cohesive national energy policy. The anti-competitive statements merely prejudice our public and shift their attention away from viable solutions, of which protectivism is not one. Trying to bully China away from drilling in Cuba will not save the US from our energy woes either. Indeed, trying to form some anti-Chinese competition by drilling our own Florida Straits region is an equally undesirable answer. There is not enough oil residing there to last the U.S. more than 15 years, most likely in the range of a dozen; are we willing to allow their political grandstanding to set us back a decade or more in energy development and management, at which time we will have no reserves left and an even larger energy demand?

Fostering these sentiments and creating this antagonism is very easy politically for it requires no major input or sacrifice by the public, merely stirring up protectivist and nationalistic fervor among the public. But it doesn’t solve the underlying issues at hand. To achieve that, America needs to look at the more difficult, but entirely plausible, solutions of alternative fuels, conservation, and higher efficiency. These solutions are available to us; look at the new GM plan of the E85 standard, which uses a blend of 85% ethanol with 15% regular gasoline. Imagine cutting our transportation fuel usage by 85%. The world would be dumbstruck. Or the hybrid line of fuels which is gaining in popularity. Another efficient, gas and cost saving measure. CAFE standards are another option, used by Carter in the 70s to great positive effect, could be resurrected to help force the changes we all want to see. Smarter urban planning which allows for improved public transportation (or even non-motorized transportations, like walking or biking [gasp!]). These options are here for us to utilize, if only the politicians, our leaders, would get behind them and breathe life into them for a truly positive change in this country. The benefits are beyond comprehension. Instead, they seem to be focused merely on blowing a lot of hot air around. I hope there’s a change in the winds soon.

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