China and the Final War for Resources Bill Ridley
February 9th, 2005
"What's coming will be more devastating to the U.S. economy than any nuclear strike..." - The Asia Times
I. Unrestricted WarUnrestricted War: China’s Master Plan to Destroy America is a treatise for world domination written in 1999 by People’s Liberation Army Colonels Qiao Liang and Wang Xiangsui. In order for China to become a dominant global power over the United States, the PLA emphasizes “The Final War over Resources”, must be won.
The Colonels state that the aggressor nation “must adjust its own financial strategy, use currency revaluation or devaluation as primary weapons, and combine means such as getting the upper hand in public opinion and changing the rules sufficiently to make financial turbulence and economic crisis appear in the targeted country or area, weakening its overall power, including its military strength. Whether it be the intrusions of hackers, a major explosion at the World Trade Center, or a bombing attack by bin Laden, all of these greatly exceed the frequency bandwidths understood by the American military..."
Can you imagine if U.S. military leaders or politicians made such threatening comments? People would be up in arms and demanding resignations and Congressional inquiries!
However, in another case where truth is stranger than fiction – for the most part the U.S. media and government officials are keeping a lid on this volatile story. As you are about to read, the Chinese have already positioned themselves to inflict major damage to the U.S. economy. For those few brave souls in Washington and the media who are talking, their words are ominous.
Writing in the Los Angeles Times, Gal Luft, executive director of the Institute for the Analysis of Global Security, said: "Without a comprehensive strategy designed to prevent China from becoming an oil consumer on par with the U.S., a superpower collision is in the cards." The New York Times has also weighed in stating that China’s actions threaten “the very stability of the global economy.”
The final war for the planet’s resources has already started. You name the commodity and China’s buying it and consuming it in HUGE quantities. Last year they consumed nearly half of the world’s cement, twice the world’s consumption of copper, and nearly a third of the world’s coal, 90% of the world’s steel plus nearly every other commodity you can think of has been in greater demand by China.
However in order to propel such furious economic growth, there is one key commodity you need above all the others. And if you can’t get enough of it, having all the other resources won’t matter. The most prized and sought after commodity which makes the world tick is oil. With out it, you have nothing. Your economy would be frozen and your military would be left inept.
As China’s Master Plan to Destroy America manifesto outlines, the multifaceted battle plan recommended by the Chinese military has taken shape..…
Financially: Using Currency as the Primary WeaponI hate to admit it, but the Chinese have done a masterful job. While America’s media is hypnotizing us with frivolous entertainment such as American Idol or The Amazing Race, they are totally ignoring the perilous economic time bomb the Chinese have placed against us. The Government of China is holding U.S. currency and Treasury notes in a $1.9 trillion Treasury bond trap. When they pull the trigger on their “primary weapon,” the dollar will crash and gold will break $600 in a heart beat and just keep going.
Political and Military Alliances China has made several deals with OPEC countries whose ideology is very much anti-American. Headlining the list is Iran who President Bush recently singled out as "the world's primary state sponsor of terror pursuing nuclear weapons while depriving its people of the freedom they seek and deserve."
Also alliances have been made with Venezuela who are threatening to cut off oil exports to the U.S. entirely while giving China as much as it wants. These new deals China is making with these and other hostile OPEC countries also involve trading oil in euros not U.S. dollars. The dumping of U.S. dollars for euros would be devastating to an already weakening dollar.
China’s plan is both brilliant and deviously well planned. New alliances with radical groups, arms for oil deals with Iran, a new military build up, major acquisitions of large western resource companies such as Noranda are just a few of the multifaceted maneuvers now taking place.
In my last issue I reviewed the fact the U.S. oil demand is soaring while domestic supplies are dwindling forcing imports to increase to 60%. However many of America’s foreign suppliers are hostile countries whose ideology and hatred have been forged over the decades and now have reached a boiling point in the Mid East.
Before we get into how the final war for resources is building momentum let’s recap the supply and demand scenarios of the U.S. and China.
II. The Growing Demand from a Dwindling SupplyAccording to the International Energy Agency (IEA), global demand for oil grew last year at its fastest pace since 1980, now averaging 88.1 million barrels a day. Out of that, about 20 million barrels of oil demand comes from the United States.
THAT'S A LOT OF OIL! And remember, once it's burned, it's gone for good!
Over the next twenty years the global demand for oil will increase sharply, hitting 120 million barrels by 2025. Asia is expected to consume 80% of that output – that is if there is that much extra supply capacity. Today production is barely keeping pace with the world’s consumption needs as it is.
What is even more concerning is that peak oil production has already hit all the world’s oil producing nations with the exception of Iran, Iraq and Saudi Arabia.
Colin Campbell, one of the world’s leading oil geologists, estimates global production will hit its peak this year. Campbell has stated that the world started using more oil then it found since 1981 and consuming from reserves of past discoveries ever since.Oil Supply Shortages Likely After 2007, New Report ShowsGlobal oil suppliers could start to have difficulty meeting growing demand after 2007, according to a study of existing and planned major oil-recovery projects published this month in Petroleum Review.
While a flood of new production is set to hit the market over the next three years, the volumes expected from anticipated new projects thereafter are likely to fall well below requirements, the report says.
"There are not enough large-scale projects in the development pipeline right now to offset declining production in mature areas and meet global demand growth beyond 2007," said Chris Skrebowski, author of the report, editor of Petroleum Review and a recently appointed Board member of the Oil Depletion Analysis Centre (ODAC) in London.Major Oil Firms Actions Reflect a Peak Oil MarketCredit Suisse First Boston reported that major oil companies are replacing dwindling reserves by acquiring other oil companies instead of exploring for new fields, a strategic shift with implications for global oil supplies, according to a recent report.
“If the actions - rather than the words - of the oil business' major players provide the best gauge of how they see the future, then ponder the following.. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.” - Mark Williams, Technology Review, February 2005
The rate of major new oil field discoveries has fallen dramatically in recent years.
There were 13 discoveries of over 500 million barrels in 2000, 6 in 2001 and just 2 in 2002, according to the industry analysts IHS Energy. For 2003, not a single new discovery over 500 million barrels has been reported.
It appears likely that from 2007, the volumes of new production will fall short of the need to replace lost capacity from depleting older fields.
Look at this imbalance: The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one…
The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.-- The Christian Science Monitor, January 20, 2005
There’s a historic oil market squeeze coming and it’s clear, not everyone on the planet will have their oil needs met. The San Francisco Chronicle predicts that a “social and economic upheaval across the globe” is coming.Consumption Statistics We are living in an age where oil demand is escalating at an unprecedented rate while global production is on the decrease. Today one barrel of oil is found for every 6 consumed. The day of reasonably priced $35 barrel oil has come to an end.
With about 5% of the world’s population, the U.S. consumes about 25% of the world’s total oil supply. It’s hard to believe that just 50 years ago, America was producing half the world’s oil and today we can’t produce even half of our own needs.
From 1970 to date, our demand has increased from 17.7 million barrels of oil per day to nearly 21 million barrels. At the same time domestic oil production is decreasing, having dropped from 10 million barrels per day in 1970 to a projected 5.58 million barrels in 2005.
As a nation, the United States depends on foreign oil for 60% of its needs and that amount will only get bigger over time.
The Department of Energy forecasts consumption demand will be 26 million barrels a day or greater by 2020, imports representing two-thirds of the supply needed.Rest of the blog at:
http://www.321energy.com/editorials/winston/winston020905.htmlTC
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