How Obama’s Environmental Policies Create Tension with China
A new study suggests that President Barack Obama’s oil policy could be responsible for China escalating its rhetoric and squaring off with the U.S. in the South China Sea.
The United States can now reduce the global supply of energy, hurting Beijing. This ability stems largely from America’s increased production of oil and natural gas derived from hydraulic fracturing. China, on its end, interprets Obama’s attempts to prevent American oil from being internationally exported as American hostility disguised as environmental policy. China trusted the United States more when both nations sought increases in global oil production — a mutually-shared objective before domestic production reduced U.S. oil import dependency.
Most of China’s foreign policy centers on attempts to acquire new energy resources, particularly oil, at a time when its own dependence on imported oil is increasing. The crisis in the South China Sea stems from China’s prospects for offshore and its desire to control the global energy trade.
Chinese officials believe the shale revolution has increased U.S. immunity to global oil problems resulting from military conflict, political instability and international sanctions. This makes Washington a less reliable partner in managing world energy markets.
“Reduced dependence on foreign oil will make the US more hawkish in advancing its agenda,”claims the state-run newspaper China Daily.
China is largely unable to have its own shale revolution because its shale reserves, though large, would be prohibitively expensive and technically difficult to process. Chinese shale oil is estimated to be economically recoverable at $345 a barrel — more than triple the price of American oil shale.
China surpassed the United States as the world’s largest net importer of petroleum in 2013. Within the next few decades, it is expected to buy roughly 70 percent of its oil from foreign sources, largely from states known for instability. Sudan alone provides 7 percent of China’s oil imports, and over one-third of Chinese oil imports come from Sub-Saharan Africa. Some of China’s largest oil suppliers are Angola, Sudan, Nigeria and Equatorial Guinea, which are all known for political instability.
The two largest suppliers of Chinese oil, Russia and Saudi Arabia, are more politically stable but are involved in Middle Eastern conflicts. China prefers to avoid being drawn into such confrontations, especially given recent tensions with its own Muslim minorities.
From the Chinese point of view, the American situation on energy resources dangerously outclasses its own. America controls the world’s largest untapped oil reserve — the Green River Formation in Colorado. This formation alone contains up to 3 trillion barrels of untapped oil shale, half of which may be recoverable. That’s five and a half times the proven reserves of Saudi Arabia. This single geologic formation could contain more oil than the rest of the world’s proven reserves combined, and American oil production in 2014 was 80 percent higher than production in 2008.
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