[lbo-talk] Saudis Waging an Oil War on Iran?

Yoshie Furuhashi critical.montages at gmail.com
Fri Jan 26 07:36:53 PST 2007


On 1/26/07, John Gulick <john_gulick at hotmail.com> wrote:
> Marv Gandall posted:
>
> "High Prices Prod Developed World To Curb Oil Use; Data Show First Drop In
> Two Decades in West;
> Crude Dips Below $50"
>
> Gulick sez:
>
> I wonder how much the following dynamic of cause and effect enters the
> equation, or could enter the equation in future:
>
> much higher petroleum prices -> somewhat higher energy resource prices in
> general -> accelerated shifting of energy-intensive industrial production
> from high-wage OECD to low-wage China -> energy-intensive Chinese industrial
> producers substitute domestic coal for foreign oil as an indirect source of
> motive power (what with those 100's of coal fired power plants coming on
> line)
>
> I guess I could make some headway with this hypothesis by checking out
> year-on-year Chinese coal extraction and burning stats, but I do recall
> reading somewhere that this accounted for the serious tapering of Chinese
> oil consumption growth.
>
> In essence, the short-term impact of OECD countries gobbling slightly less
> oil is China gobbling a lot more (dirty brown) coal. Having been to Beijing
> recently, you'd better damn believe that local and national notables are
> hoping that the wind is blowing the right way when the world's eyes are on
> the town in Summer 2008... I guess I also read somewhere about the CCP
> adding cloud-seeding experiments to their smoke and mirrors arsenal.

"On a worldwide basis coal's share of industrial sector energy use increases, mostly because of the substantial growth projected for coal consumption in China's industrial sector. In the IEO2006 reference case, industrial energy use in China more than triples from 2003 to 2030 as a result of the country's abundant coal reserves, its limited reserves of oil and natural gas, and its leading position in world steel production," says the EIA ("International Energy Outlook 2006," <http://www.eia.doe.gov/oiaf/ieo/highlights.html>).

Coal can substitute for oil to a certain extent mainly in the industrial and electricity generation sectors. However, the main driver for oil consumption in China and much of the rest of the world is the transportation sector: "Energy use for transportation in China is projected to grow by 5 percent per year between now and 2025. Virtually all of the projected increase is for petroleum products; about two-thirds of that is expected to be for transportation. Personal travel in China has soared in the past two decades, with passenger miles traveled increasing fivefold. China had 14.5 million registered vehicles (including passenger cars, trucks and buses) at the end of 2001. According to forecasts conducted by the International Energy Agency, this number could climb to 130 million by 2030" (E. Anthony Wayne, Assistant Secretary for Economic and Business Affairs, "Energy Trends in China and India and Their Implications for the United States," Testimony Before the Committee of Foreign Relations, U.S. Senate, 26 July 2005, <http://www.state.gov/e/eb/rls/rm/2005/66574.htm>).


> And on a related note, isn't the stateside biofuels and ethanol craze going
> to put huge pressure on North American natural gas supplies?

Upward pressures on food prices, which have big political implications, may be a more immediate result.

<http://english.people.com.cn/200701/26/eng20070126_344936.html> China to replace a quarter of refined oil with liquid biofuels font size ZoomIn ZoomOut

The Chinese government aims to develop liquid biofuels like ethanol and bio-diesel in rural areas to cut usage of refined oil by 10 million tons, or more than a quarter, by 2020, senior official said on Thursday.

The development of biofuels would solve the country's energy shortage and ensure national energy security, said Shi Yanquan, deputy director of the Ministry of Agriculture's department of science, technology and education.

As the world's third largest oil importer after the United State and Japan, China imported record-high 36.38 million tons of refined oil last year, 15.7 percent up on 2005, to fuel an estimated annual economic growth of 10.7 percent. -- Yoshie <http://montages.blogspot.com/> <http://mrzine.org> <http://monthlyreview.org/>



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