Energy as a weapon

There were a couple articles I stumbled across in the last week that piqued my interest, and involve two countries who are or were among our biggest enemies. But both have some long-term ramifications for us and our Western allies.

The first article was about the China National Offshore Oil Corporation (CNOOC), more specifically a publicly traded subsidiary that wanted additional rights to purchase overseas assets and compete with its non-public parent company. While it sounds like just another international business deal gone sour, bear in mind that CNOOC was the company who offered over $18 billion to buy out Unocal and enter the United States gasoline market. (After heavy political opposition here, Chevron eventually bought Unocal.)If the deal had gone through though, all the Union 76 stations in the country (there weren’t many but they existed) would have been owned by a country who aims nuclear missiles at us.

Personally, I don’t see this stockholder revolt as much more than a temporary setback to the expansionist dreams of CNOOC, who already partners with Royal Dutch Shell on a $4 billion petrochemical project. A large reason that our oil prices have risen to previously unimagined heights is the continuing demand by China on supplies. Recently China supplanted Italy as the 6th-largest economy in the world, and I think within the decade they’ll pass the three largest Europeans (Great Britain, France, and Germany.) That would place them with us and Japan in the top 3.

Europe has trouble of a different sort to its east. With the Russian bear being a large natural gas supplier to these countries, a spat involving Russia and Ukraine over natural gas prices spilled over to affect Western countries. As of January 1st, Russia enacted a nearly fivefold increase in their price to supply Ukraine. The Ukrainians allegedly countered by siphoning natural gas off pipelines through their territory intended for points west like Hungary, Poland, and Serbia.

So, in the midst of winter, several European nations had a temporary natural gas supply shortage. With some of these countries being onetime Soviet satellites who are still in the early stages of democracy, it’s not out of the question that the Putin regime could certainly extract major concessions from these governments for them to maintain this energy link to their former masters. In the case of the Ukraine, their government has fallen out of favor with their Russian neighbors as they look to Westernize more. With the parliamentary elections in Ukraine occurring this coming spring, some saw this move as a play to prop up opponents of Ukraine president Viktor Yushchenko. He defeated a Russian-backed contender in Ukraine’s 2004 election, a vote claimed by some to be tainted with fraud.

This is another reason that I think the U.S. should be heavily investing in finding their own energy supplies. Having these two incidents occur so close together timewise serves as a reminder that when our economy becomes too dependent on others, one hardly-noticed incident can grow to become a wrecking ball to our economy.

Instead of more regulation and red tape, the federal government needs to step aside and let our energy companies (at least the ones that remain ours) do their work to find energy sources within our borders. Are you listening, opponents of ANWR oil exploration?

Author: Michael

It's me from my laptop computer.

5 thoughts on “Energy as a weapon”

  1. One thing that has piqued my interest lately (in light of the recent WV coal mine explosion) has been coal mining. The research I’ve done has told me that coal is resurfacing as a leading fuel in many parts of the United States. Many utility companies are turning to coal to create electricity, because gas and oil are becoming so expensive. One statistic said that 55% of U.S. utility companies use coal to create electricity. Most statistics agree that there is a lot of coal remaining underneath the United States – something like 13,000 tons or 13,000 cubic feet or maybe 13 million cubic feet, I don’t remember.

    The problem with this, though, is that mining coal is such a dangerous occupation. It pays well enough, but more and more young people are realizing that they can earn as much money in safer occupations. So coal mining companies are having an awfully difficult time maintaining their workforce, as more miners retire and fewer miners enter the workforce.

    So I’m interested in what the future holds for coal mining. Will the government get into the situation and make it safer for coal miners? Can the government make it safer for coal miners? Or will we return to overseas oil forces?

  2. Mining is a relatively dangerous occupation, but not the most dangerous one. Any occupation involving tunneling underground carries risks.

    The bigger problem with coal, particularly Appalachian coal as I recall, is the high sulfur content, which supposedly contributes to acid rain. Maryland is a state with several old coal-burning power plants that they are trying to clean up through more regulation.

    But a very thoughtful comment as usual. Refreshing.

  3. Oh boy, Toilet Bowl has become a regular… bet you’re happy.

    Hey Swartz, you challenged me to say where the Constitution address the right of freedom.

    The Fourth Amendment to the U.S. Constitution says “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause…”

    Damned unAmerican political hack. It’s a shame that you will downplay our personal freedom, just to justify your illegitimate hack president. You should REALLY be ashamed of yourself and your anti-American sentiment.

  4. Michael, I’m willing to bet that another reason that makes coal mining an unattractive occupation (as opposed to the other occupations listed in the CNN article you linked) is the immense amount of publicity given to every coal mining disaster. For example, think of the 2002 Quecreek disaster in Pennsylvania, where nine miners miraculously survived a flood and mine collapse. Not as much attention was given to the September 2001 Jim Walter Resources #5 explosion in Alabama, killing 13 miners, just because of the timing (so soon after 9/11). But the recent Sago mine explosion has and is still receiving immense amounts of media coverage.

    Compare that to, for example, truck driving, taxi driving, or chaffeuring. They kill at least as many people as coal mining, but (not trying to sound morbid) those occupations kill one or two people, in one accident at a time. The most media coverage given to those accidents is a tiny blurb on the local evening news.

    I think the same thing pretty much applies to the other occupations. In Missouri, I rarely if ever hear about the deaths of loggers, fishermen, ironworkers, and so on. I only hear about it if, on some rare occassion, there is an explosion that kills enough people to make the national news, or a freak accident that is weird enough to make the national news.

    The exception would be aircraft pilots. Usually plane crashes (even small planes) make the national news, especially if someone dies. However, in school I was bathed in the belief that “flying is safer than driving”. In high school, the counselors told us that some aircraft pilots earn mucho dinero. And there’s a certain respect for pilots – I know I wouldn’t know what to do with all those knobs and buttons and gizmos.

    What do you think?

  5. TB, here is an article you may be interested in. But your point is well taken about most occupations. Like you say, since they get picked off one at a time, it’s not a big national news item in most cases.

    The rare exceptions are police officers or firemen killed in the line of duty if their sacrifice was deemed heroic (like if the cop broke up an armed robbery and fatally shot the robber or if the fireman got 6 trapped kids out and dies looking for number 7.)

    On the other hand, the partisan media celebrates every last soldier killed in Iraq and Afghanistan as their “body count” mounts.

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