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Report: Growing China may threaten U.S. oil supply

SPECIAL TO WORLD TRIBUNE.COM Wednesday, February 21, 2001 WASHINGTON China could pose a future threat to Gulf oil currently supplied to the United States, warns a report by a Washington-based think tank.

The Center for Strategic and International Studies report projected that rapid economic growth will turn China into a major oil importer over the next 20 years.

This development could result in competition between China and the United States for Gulf oil, the report said. One scenario described the prospect that Beijing would form military ties with Gulf states to ensure that China is a priority for Arab and Iranian oil exports.

"The rising dependence of China on Persian Gulf oil could well alter political relationships within and outside the region," the CSIS report warned the Bush administration.

"For example, China might seek to build military ties with energy exporters in the Persian Gulf in ways that would be of concern to the United States and its allies."

The United States regards China as a major proliferator of missile technology and components to such countries as Iran, Libya and Syria. Earlier this month, CIA director George Tenet expressed skepticism of any immediate change in Beijing's proliferation policy despite a Chinese pledge to the Clinton administration last year to end such exports.

U.S. officials said Chinese nationals helped upgrade Iraqi air defense batteries around Baghdad. The officials said the Chinese helped install underground fiber-optic cables to significantly improve the anti-aircraft batteries.

The CSIS report is the first to characterize Beijing's threat to Gulf oil supplies. Until now, Beijing's geopolitical threat has been portrayed in reference to Taiwan and in opposition to the U.S. presence in East Asia.

Based on a dispatch from Middle East Newsline

Wednesday, February 21, 2001

-- Martin Thompson (, February 21, 2001


The chinese are already way ahead in the oil game. The following from the archives. On one of the Networks last night was a story about chinese laying fiber optic lines in Iraq.

Sunday 27 August 2000 China puts '700,000 troops' on Sudan alert By Christina Lamb, Diplomatic Correspondent

TENS of thousands of Chinese troops and prisoners forced to work as security guards have been moved into Sudan. Col Johnny Garang: the SPLA has recently advanced to within 10 miles of the oilfields in the Upper Nile region They have been sent in preparation for a big offensive against southern rebels to try to bring to an end one of Africa's longest-running conflicts, according to Western counter- terrorism officials.The Chinese have been brought in by aircraft and ship, ostensibly to guard Sudan's increasingly productive oilfields in which the China National Petroleum Corporation is a leading partner.


-- Martin Thompson (, February 21, 2001.

China denies Iraq defense link

February 21, 2001 Web posted at: 3:45 AM EST (0845 GMT)

BEIJING, China (CNN) -- China has denied the Pentagon's allegations that the country is helping Iraq upgrade its air defenses.

Pentagon sources say Friday's joint U.S.-Britain air strikes on Baghdad were prompted by China's move to upgrade Iraqi military telecommunications system which would dramatically increase Iraq's threat to U.S. and British planes patrolling the southern no-fly zone.

Sources say Chinese technical experts have been building a fiber optic system to link Iraq's long-range radars, to give better targeting information to Iraqi gunners.

In Beijing, Foreign Ministry spokesman Zhu Bangzao said he had no knowledge of Chinese military and civilian experts supposedly helping Iraq's military install the cables.

'Complying with resolutions'

The Chinese embassy in Baghdad denied the Pentagon claims. "Do you think we would do that?" an embassy official asked CNN. "We are complying with U.N. resolutions."

He said most of China's telecommunications contracts had been held up or blocked by the U.N. sanctions committee. And work had not started on any of the telecommunications projects previously approved by the U.N.

A senior Pentagon official told CNN the attacks on five air-defense sites were timed on Friday to avoid killing or injuring Chinese civilian and military workers who were laying the underground cables.

"On a Friday you have the lowest number of people present -- both Iraqis and Chinese," the senior official said, speaking on condition of anonymity. "The goal wasn't to kill people; the goal was to bust up stuff."

The official said some portion of the fiber-optic network already was operating at the time of the bombing.

Tense relations

Sources say the Pentagon exercised extra care in Friday's strikes, attacking on the Muslim Sabbath to minimize the chance of killing Chinese or Iraqis, given the tense U.S.-China relations followed the 1999 NATO bombing of the Chinese embassy in Belgrade.

The Pentagon, denying the China allegations, says Iraq's Early Warning Radar System was "moderately disrupted", while the communication links between the radars were "significantly disrupted".

China, a security council member which has called for an end to sanctions against Iraq, receives a large share of contracts for Iraq under the U.N.'s oil-for-food program. tml

-- Martin Thompson (, February 21, 2001.


WASHINGTON [MENL] -- The Bush administration is being warned that China could present a threat to Gulf oil supplies to the United States.

The warning came in a report by the Washington-based Center for Strategic and International Studies. The report said that rapid economic growth by Beijing will turn China into a major oil importer over the next 20 years.

This development could result in competition between China and the United States for Gulf oil, the report said. One scenario envisaged is that Beijing will form military ties with Gulf states to ensure that China is a priority for Arab and Iranian oil exports.

"The rising dependence of China on Persian Gulf oil could well alter political relationships within and outside the region," the center said. "For example, China might seek to build military ties with energy exporters in the Persian Gulf in ways that would be of concern to the United States and its allies."

-- Martin Thompson (, February 21, 2001. 470.stm

Wednesday, 21 February, 2001, 14:23 GMT Iraq denies China air defence link

The Iraqi authorities have dismissed American reports that Chinese workers are helping to install fibre-optic cables to improve Iraq's air defence, in violation of United Nations sanctions.

Pentagon officials said earlier this week that last week's air strikes in the Baghdad area were staged on a Friday partly to avoid casualties among workers, including Chinese workers.

Beijing has said such allegations about Chinese assistance to Iraq in breach of sanctions are an attempt to divert opinion from the air strikes -- which Iraq said killed two people and wounded twenty.

From the newsroom of the BBC World Service

-- Martin Thompson (, February 21, 2001.

News headers at the People's Daily

People's Daily

-- spider (, February 21, 2001.

Fears rise that Asia's energy demands could fuel war

By Jim Lobe

WASHINGTON - Asia's growing energy needs over the next 20 years are likely to have profound geopolitical consequences, according to a three-year study by a bipartisan commission released this week by the Center for Strategic and International Studies (CSIS).

Competition for existing reserves in the Asia region could boil over into armed conflict between states, while increased dependence by China on Mideast oil may prompt Beijing to forge military relationships with countries there which "would be of concern to the United States and its allies", according to the three-volume report.

Due to its own growing reliance on foreign energy supplies, the US itself will be vulnerable to any major disruption in either global supply or demand, it says. As a result, Washington should avoid using unilateral sanctions against key oil-suppliers, such as those which currently apply to Iran, Iraq, and Libya; stop blocking pipeline construction from the Caspian region and Central Asia through Russia and Iran; and promote investment in energy-producing countries, according to the report.

Regional energy integration through the construction of electricity grids or pipelines between consumers and producers could also produce new political alignments that could help maintain stability among key power blocs. As a major energy producer, Russia may become more closely linked with both the European Union and China; while Central Asia is likely to find itself in a similar position with China; and Bangladesh with India, according to the commission's findings.

The increased importance of Middle Eastern oil in global energy supplies over the next 20 years will also require the US to maintain a strong military presence in both the Gulf and near critical "choke points" through which oil tankers will travel on their way to Asian markets, according to the report, The Geopolitics of Energy into the 21st Century. That will create "opportunities for cooperation - and for tension - with both exporters and importers", it says.

The report, released as President George W Bush is still making appointments to key policy posts, reflects the views of a number of different interests which already enjoy influence in the new administration, already referred to by some as an "oilagarchy" due to the past ties of Bush, Vice President Dick Cheney and National Security Adviser Condoleeza Rice to the oil industry.

The commission was co-chaired by former Democratic Senator Sam Nunn, who hails from the pro-defense, conservative wing of his party, and James Schlesinger, who has served as secretary of defense and energy under Republican presidents. Congressional co-chairs included Senator Joe Lieberman, another conservative Democrat who ran as the party's vice presidential candidate in last November's election, and Senator Frank Murkowski, a Republican who has long championed opening the Arctic National Wildlife Refuge to drilling by US oil companies in order to reduce US dependence on foreign oil and sell Alaskan oil to energy-hungry Japan.

Other participants included senior energy officials in the US government and executives from major oil companies, such as Aramco Services Co, Haliburton Company, Exxon Mobil, Texaco, Arco, Shell International, and British Petroleum. The CSIS, one of Washington's more prominent foreign policy think tanks, receives strong financial support from the corporate sector, particularly from multinational oil companies and big military contractors.

Global demand for energy, according to the report, is projected to rise by more than 50 percent over the next 20 years, but most of the increase will take place in the developing world, especially in Asia. In order to keep up with demand, producers will have to substantially increase supplies over the period. "Central to the geopolitics of energy during 2000-2020," according to the report, "is the fact that energy demand will be met in essentially the same ways it was met at the end of the 20th Century, with fossil fuels - oil, gas, and coal". These will account for 88 percent of the global share in 2020, up from 86 percent in 2000. The major difference will be the increasing share of that claimed by natural gas at the expense of oil and coal.

Development of oil and gas reserves is considered sufficient to keep up with demand until well after 2020, the report says, stressing, however, that a key policy objective on the part of all major actors is to assure a steady, reliable supply. This may not be easy, however, because all but a few of the major oil-exporting countries, especially those in the Gulf, Africa, and Latin America "exhibit characteristics that could make [them] vulnerable to domestic political instability severe enough to cause [their] oil production to be diminished substantially".

While the US can and should, with European and Asian financial assistance, patrol the sea lanes to protect oil supplies, new international agreements are needed to protect pipeline systems and electrical grids. "Governments must find ways to work with the private sector to minimize the vulnerability of all energy infrastructures to sabotage or terrorist attack," the report says.

As the world's most important producer of oil, the Gulf, and especially Saudi Arabia, will be the cornerstone of successful efforts to ensure a reliable oil supply. The region, in fact, must expand oil production almost 80 percent over the 20 years, as the relative share of global production currently held by North America and Europe drops. In pursuit of that target, Iran and Iraq - against which Washington currently has far-reaching oil-related sanctions - must also increase their production, according to the report. If US companies hope to participate in that expansion, sanctions against the two countries, as well as Libya, should be dropped, the report suggests.

At the same time, the share of global oil production by the countries of the former Soviet Union is likely to increase from 9 percent last year to almost 12 percent. While Caspian oil will be an important addition to the total production, it will not be pivotal. Europe and Asia will be the biggest consumers of Gulf oil, while Europe's need for natural gas will be covered mostly by Russia, setting up what the report calls a "worrisome dependence".

The study stresses that neither nuclear power nor renewable sources of energy are likely to claim a greater share of world energy supplies than they do now by 2020. Industrialized countries should provide cleaner and more efficient technologies to developing countries in order to reduce consumption and greenhouse-gas emissions which contribute to global warming.

-- Martin Thompson (, February 22, 2001.

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