UNITED NATIONS – With the price of oil down to about $50 a barrel from the $146 peak in June 2008, China has gone on a worldwide oil-buying spree that dims the Obama administration’s hope of achieving a realistic global cap on the consumption of carbon-based fuels at the upcoming United Nations Climate Change Conference in Paris, Nov. 30 through Dec. 11.
Consider the recent moves China has made to increase its oil imports:
- Last Saturday, in a disclosure to the Shanghai Stock Exchange, Yantai Xinchao Industry Co. Ltd., a Chinese oil production company, announced signing a letter of intent with Ningbo Dingliang Huitong Equity Investment Center, a limited liability partnership, to purchase oil fields in Texas for $1.3 billion. The transaction with Moss Creek Resources LLC, a Ningbo Dingliang subsidiary, was approved by the Committee on Foreign Investment in the United States, CFIUS, an inter-agency committee managed by the Treasury Department and authorized to review transactions that could result in control of a U.S. business by a foreign entity.
- Reports first appearing in 2013 indicated China was emerging as the leading purchaser of oil produced in Iraq. China then was purchasing half of the nearly 1.5 billion barrels of oil a day produced in Iraq, eliminating any hope the U.S.-led Iraq war would open up Iraqi oil reserves to American firms to help offset the enormous cost of the war to the U.S. taxpayer.
- In 2014, China increased its oil stake in Iraq when PetroChina, one of China’s four state-owned energy giants, purchased a stake from Exxon in the southern Iraq oil field West Qurna, a development that led to 10,000 Chinese oil workers relocating to Iraq.
- Under China’s relaxed rules for oil importing, China’s Ministry of Commerce announced July 23 that refiners or petrochemical companies that have at least one crude distillation unit with minimum yearly processing capacity of 2 million tons, oil storage capacity of 300,000 tons and an available credit line of $1 billion from commercial banks, among other criteria, would be eligible to apply for a license to import crude oil. It’s a reversal of a previous requirement that relaxed import rules only for petrochemical companies with two years’ experience in importing oil. The requirement effectively ruled out many private refiners. According to Department of Energy’s Energy Information Agency statistics, China became the largest global energy consumer in 2011, and it passed the United States this summer to become the world’s biggest crude oil importer.
China agrees to future goals
On Sept. 25, during his summit in Washington with President Obama, Chinese President Xi Jinping made China’s usual promises to reduce in the future carbon dioxide emissions.
In a joint communiqué on climate change, China pledged to lower carbon dioxide emissions per unit of GDP by 60 percent to 65 percent from the 2005 level by 2030.
Critics quickly noted that 2030 is when China’s CO2 pollution is expected to peak, as China remains dependent upon coal to provide more than 70 percent of the energy China consumes. Hundreds of new coal-burning power plants account for how China surpassed the United States in the last decade to become the world’s largest emitter of greenhouse gasses.
Meanwhile, skeptics worldwide continue to question the accuracy of statistics used as evidence of the theory of anthropomorphic global warming/climate change, with the Mathematical Calculation Society based in Paris issuing last week a 195-page report calling the battle against global warming “an absurd, costly, and pointless crusade.”
“We are fighting for a cause (reducing CO2 emissions) that serves absolutely no purpose, in which we alone believe, and which we can do nothing about,” the report issued by the Mathematical Calculation Society said. “You would probably have to go quite a long way back in human history to find such a mad obsession.”
Solar and wind energy lag
The EIA has reported the three major carbon-based fuels – petroleum, natural gas and coal – that have “dominated the U.S. energy mix for more than 100 years” continue to dominate the U.S. energy mix, with natural gas accounting for 31 percent of the U.S. energy production in 2014, petroleum 26 percent, coal 24 percent and renewable energy, including hydroelectric energy, wind and solar energy, only 11 percent.
The EIA website poses the question, “Why don’t we use more renewable energy?”
“Renewable resources are often located in remote areas, and it can be expensive to build power lines to the cities where the electricity produced from renewable energy is needed,” the EIA website answers.
“The use of renewable sources is also limited by the fact that they are not always available – cloudy days reduce electricity generated from solar installations; days without wind reduce electricity from wind farms;and droughts reduce the water available for hydropower,” the EIA website continues.
Still, the EIA remains optimistic about the future of renewable energy sources.
“The use of renewable fuels is expected to continue to grow over the next 25 years,” the EIA website on renewable energy notes. “The U.S. Energy Information Administration (EIA) projects that the United States will use nonrenewable fuels to meet most of its energy needs through 2040.”
Over the past few years, the Pew Charitable Trust’s report on clean energy investment and development show that while global investment in renewable energies has fallen some 10 percent per year since a peak of $318 billion invested worldwide in 2011, China tops the list, ahead of the other G-20 nations.
Yet, the percentage of energy generated in China through renewable sources still lags behind the United States, despite the greater investment measured in absolute dollar expenditures that China makes.
In the climate deal China and the U.S. reached in 2014, both countries pledged to what was called “historic emission reduction targets.” However, at the time, renewable and nuclear energy contributed to less than 10 percent of China’s energy needs, despite a five-year plan that called for China to reach 11.4 percent renewables by 2015 and a long-term goal calling for China to double the percentage, to over 20 percent renewable energy, by 2030.