Posted on 11/11/2006 11:08:48 AM PST by maui_hawaii
I. Overview – China’s “Go Out” policy for energy security
China considers its energy supplies, particularly oil and natural gas, to be increasingly insecure. While prior to 1993 it was a net oil exporter, China now has the largest annual increases in oil consumption in the world, forecast to run at a rate of around 500,000 barrels per day (bpd) in 2006 and 2007 by the US Department of Energy. This is being driven by economic growth of about 10% per year. Despite efforts to slow this runaway growth rate, China will still be the largest single driver of growth in oil consumption during the next decade. Meanwhile, its domestic oil production, while substantial at 3.8 million bpd, is forecast to remain relatively flat or decline slightly, so all incremental increases in demand will have to be satisfied by imports.
China is also developing its natural gas sector, which has historically not been a major part of its fuel mix – it currently constitutes about 3%. In June 2006, however, China became a natural gas importer for the first time with the opening of the Guangdong liquefied natural gas (LNG) import terminal, which is supplied mainly from Australia. In the future, natural gas imports are likely to grow, with additional LNG import terminals and pipelines under consideration that would link demand centers in China to supplies in Russia and Central Asia.
The Chinese leadership wants to pursue policies that will secure supplies of oil and natural gas and cement a strengthened role for the major Chinese oil and gas companies. While the governments of many Western countries, including the United States, usually take a relatively hands off approach to intervening in oil companies’ investment and purchasing decisions, there is a consensus in China that the state must use policy tools to secure ownership of foreign upstream production assets by Chinese companies. China’s strategy of investing in equity stakes to obtain control of overseas energy assets began in the early 1990s, around the time the country became a net importer of oil. It intensified as imports grew, and rose to the top of China’s foreign policy priorities following the 11 September 2001 terrorist attacks in the United States, which contributed to a perception of a less stable world and greater risks to energy production, particularly in the Middle East.
The increased reliance on imports has also given China greater impetus for improving its power-projection capabilities, including the acquisition of basing rights and port-call arrangements along key oil shipping routes in the Indian Ocean. It has also led to the use of other foreign policy tools, such as arms sales and foreign aid, to promote the competitive interests of the major Chinese oil companies in the acquisition of production assets.
It is approximately 27 pages long and provides some insights as to what China is doing.
click here for the PDF file.
It's more of a 'keep off' approach than a 'hands off' approach .... like keep off the continental shelf, keep off ANWR, keep off snail darter habitats, keep off etc., etc., etc.
The US is unique though as to ownership of natural resources.
In the US if you own the land you supposedly own the resources under it all the way to the core of the earth...
These things can and often are seperated out etc... ie... you live on the surface of the ground but you sell the mineral rights for a tidy sum to someone else and all you really need to do is give them the right to come on the property (which they pay for)...
Other countries do not in no way shape or fashion function in the same way.
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