China vs the US: The Battle for Oil

China vs the US: The Battle for Oil

Directed by Jean-Kristophe Klots (2012)

Film Review

The Battle for Oil is about the battle between China and the US over the world’s dwindling oil reserves. Globally China is the second biggest oil consumer – after the US. Owing to its dwindling reserves, they import two-thirds of their oil. High domestic demand for oil leads to periodic power blackouts and long queues at services stations.

China has three state-owned oil companies employing tens of thousands of workers, mainly in London, Singapore, New York. The country’s high demand for oil has led to major investment in African and South American oil producers. Rather than buying barrels of oil, China seeks investment in oil production capacity. Chad, Sudan and other African countries have granted them major oil concessions in return for major infrastructure investment in ports, railroads, telecommunication networks, schools, and clinics.

China’s ability (thanks to immense cash reserves) to invest in massive infrastructure projects gives them significant competitive advantage over western oil companies. As does China’s commitment to absolute non-interference in the host country’s political affairs. This contrasts sharply with western loans. The latter are always accompanied by demands for “democratic” and “human rights” reforms, which turn out to be camouflage for further penetration by Wall Street interests.

In 2005, China freaked out US lawmakers by attempting to take over the American oil company Unocal. Owing to their desire to preserve friendly trade relations, China dropped their Unocal takeover bid and shifted their focus to forging alliances with oil producers hostile to the US, such as Iran, Russia and Venezuela. Much of the current US animosity towards Venezuela stems from growing Chinese investment in their oil industry – a fact rarely mentioned in the mainstream media.

 

Reconciling Heathrow’s Third Runway with UK Climate Commitments

no-3rd-runway

BBC News reports the British cabinet has just approved the extremely controversial third runway at London’s Heathrow airport. It will allegedly bring billions of dollars of economic benefit to Britain’s economy and create tens of thousands of new jobs.

Oh really? Big business is always promising pie in the sky economic benefits and job creation for big infrastructure projects that seriously disadvantage the rest of us by evicting us from our homes and otherwise destroying our quality of life. Experience teaches these economic projections aren’t worth the paper they’re written on. Thanks to the growing complexity of the global economy, economists can predict what the economy will do next month – much less 20 years from now.

The inimitable George Monbiot says it all in an October 18 opinion piece in the Guardian: “In a world seeking to prevent climate breakdown, there is no remaining scope for extending infrastructure that depends on fossil fuels.”

As Monbiot rightly points out, there’s no way Prime Minister Theresa May can allow Heathrow to build a third runway and simultaneously uphold the Paris climate change agreement Britain signed last year.

Subsidizing Air Travel for the Rich

He cites last year’s Airports Commission report, which offers two possible strategies for ensuring the new runway (and extra flights) won’t conflict with the climate pledges Britain made in Paris. The first is for the rest of the economy to make extra cuts in greenhouse gases to accommodate aviation. Already the Climate Change Act imposes a legal target of 80% reductions by 2050. But if flights are to keep growing as the commission expects, those cuts would have to rise to 85%. This is fundamentally unjust. The large majority (75%) of Heathrow’s international passengers are holiday travelers. As they also have a mean income of £57,000, this option makes everyone else pay for the holidays taken by the well off.

The second option they offer is a carbon tax on aviation. An analysis by the Campaign for Better Transport suggests that the tax required to reconcile a new runway with Britain’s carbon commitments is somewhere between £270 and £850 for a return flight for a family of four to New York.

IMF Calls for Carbon Tax on Aviation

The International Monetary Fund is also calling for a carbon tax on aviation and shipping to help the industrialized world meet the carbon reduction goals it agreed to in Paris. Emissions from planes and ships, presently accounting for 4% of global emissions, are steadily increasing. Unlike other forms of transportation, it’s impossible to replace jet fuel with more carbon neutral energy sources such as electrification.

As Monbiot points out in his article, it makes absolutely no sense to spend billions of dollars on this infrastructure boondoggle and then price people out of the air travel market with a carbon tax. For this simple reason, he predicts the third runway won’t happen. The current timeline proposed by the Department of Transport is so long and convoluted, construction on a third runway couldn’t start before 2020. I suspect Monbiot is right – that it won’t happen at all.

photo credit: Liberal Democrats Brian Paddick with London Borough leaders campaigning against Heathrow expansion via photopin (license)