China's unquenchable thirst for oil will lead to a clash of interests with the West. Confrontation and conflict are inevitable - think Cold War not 'Third World War'...
China's Citic Group recently brought the Kazakh oil assets of a Canadian oil company for $1.91 billion. Last June China agreed a $1.4 billion deal to develop Angolan oilfields. These are no isolated incidents, but part of a global drive for oil. What is going on?
China needs oil and gas to fuel its burgeoning factories and cars. Its own reserves can't meet this thirst, and the Chinese are seeking oil in the Middle East, Asia and Africa. The Chinese approach is to buy into oil resources - gaining equity, exploring for oil, and building refineries, pipelines and ports. Deal sweeteners for oil producing regimes include low interest loans and arms packages.
China is also boosting its long range naval and air forces, building strategic relationships with countries along Middle East sea lanes, and setting up naval and spy bases. This is to protect Chinese oil shipments in times of trouble, including possible conflict with the US.
The US is worried that China's thirst for oil will lead to international competition for oil, spilling over into conflict. The Americans would like China to 'play the game' by buying oil on international markets, but the Chinese are too astute to play by someone else's rules.
Long confrontation
Competition and conflict is inevitable over the next few decades. Global demand for oil is booming, oil reserves are running down, and as oil prices climb countries will be tempted to grab what they can. The US will strive to protect its access to Middle East oil, by force if necessary, and China will be equally determined to secure its fix. There's much at stake: prolonging the oil guzzling American dream, and the survival of China's totalitarian regime.
How will this competition play out? Think Cold War, not 'Third World War' - a drawn out confrontation, stretching over decades, of diplomatic arm wrestling, blockades, wars fought by proxies, and tense stand-offs between the great powers that sometimes spill over into short but violent conflicts.
If western nations were smart, they would change the game by switching to new energy sources and technologies - the way of the future - rather than fight over a rapidly declining energy source. This isn't going to happen. The west doesn't think and act strategically anymore. And western politicians are in thrall to powerful vested interests (Big Oil, car makers) who sabotage change at every turn.
Changing the game
How will smaller countries, like New Zealand, fare? Not too well. Like other western nations, oil is our lifeblood, and instability and conflict will periodically cut the flow. We don't have the military clout to secure for ourselves a share of dwindling oil reserves, and in the divvying up New Zealand will be at the end of a very long queue. Oil will over time become a very scarce and costly commodity, and this will cripple our economy and our way of life.
We need to think carefully about how the oil confrontation will play out, how it will affect our vital interests, and how we position ourselves relative to the key players. More importantly, we must change the game, by eliminating our need for foreign oil, and rebuilding our society around 'homegrown' and renewable sources of energy and the use of energy efficiency technologies.
Start now
Changing the game is not something that we should just 'think about', 'investigate', or view as 'aspirational'. It must start now - by developing and implementing a strategy, which takes a long-term and holistic view, and integrates a range of hard hitting measures.
We live in an increasingly dangerous world. Getting our energy supply sorted out will ensure New Zealand's security, stability and independence. This is not airy fairy, tree hugging, hippie wisdom. It is cold hard calculation about our future security and prosperity.
