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China’s Search for Energy Security: Implications for U.S. Policy

Kenneth Lieberthal and Mikkal E. Herberg


China is rapidly emerging as a major force in both world energy markets and global energy geopolitics. This emergence reflects the scale of China’s rising oil demand and Beijing’s increasingly active strategic diplomacy designed to secure future energy supplies. Now the second largest oil consumer in the world and the third largest oil importer, China has experienced oil demand growth that has accounted for nearly one–third of the world’s total oil demand growth during the past decade, and is adding the equivalent of a medium–size country to world oil demand each year. In the course of less than a decade, China’s three national oil companies (NOC) have become significant new players on the global oil industry scene, with increasing investment stakes in the Persian Gulf, Central Asia, Africa, and the western hemisphere. China is now an important factor that impacts world oil demand and prices, production prospects in key energy–exporting countries, and the competitive rules of the game for the world’s international oil companies. Moreover, energy investments abroad are expanding China’s diplomatic role in key energy–producing regions, most importantly the Persian Gulf, Central Asia, Africa, and Russia. Additionally, China’s efforts to secure energy supplies and transport routes in Asia are increasingly affecting the shape and tenor of China’s diplomatic ties, as well as rivalries, in Northeast and Southeast Asia.

The United States, on the other hand, is the reigning "superpower" of global energy and, therefore, China’s energy "rise" potentially holds major implications for U.S. power and influence. The United States imports nearly thirteen million barrels per day (MMBD) (almost twice the total oil consumption of China, the world’s second largest oil consumer) and accounts for one–quarter of the world’s daily oil consumption. The United States is the third largest oil producer in the world after Saudi Arabia and Russia. As the dominant geopolitical power in the Middle East and Persian Gulf, the United States has thrice in the past two decades put its military might behind securing access to Persian Gulf oil supplies. [1] In the wake of September 11, that power and influence are also being extended into Central Asia. The U.S. Navy controls the sea lines of communication (SLOC) in all the key energy transit bottlenecks, including the Straits of Hormuz, the Malacca Straits, and the Southeast Asian sea lanes. The United States is also a dominant power in global energy institutions such as the International Energy Agency (IEA)...

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[1] These include military interventions in Iraq both in 2003 and in 1990–91 and the Persian Gulf "tanker war” in the mid-1980s.