Tuesday, March 3, 2009

China Snapping Up Energy Resources

Other, more solvent, nations are taking advantage of America's current financial crisis and lack of liquidity, as well as the current slump in oil and gas prices, to snap up energy resources all over the world at fire sale prices. A recent article in Terra Express (title link) states:

" Resource-hungry China has seized upon the financial crisis to sign billions of dollars in deals in a buying spree that is set to pick up pace and reshape the global economic landscape, analysts say.

From Calgary to Caracas, China has hammered out an unprecedented series of agreements over the past month as plummeting energy and commodity prices have left once mighty producers over-extended and short on funds.

I hope our leaders are taking notice of this development. I believe that Obama is aware of our predicament regarding energy security, but the financial crisis and economic morass have stolen attention from almost all other matters, including energy; while the temporary drop in energy prices has lulled us into complacency regarding the fossil fuel situation.

Our oil-dependent lifestyle and financial mismanagement have placed us at an incredible disadvantage in procuring the oil imports we need to fuel our car-centric lifestyle. In the meantime, worldwide oil production has dropped, and drilling and recovery projects in Calgary and everywhere else have been canceled because they cannot be profitable at the current prices of oil and gas. What this all means is that we will get caught in a massive supply crunch, which will overtake us very quickly, while more countries compete for smaller supplies of indispensable fossil fuels. Chinese leaders know what is coming and are making provisions accordingly, using the wealth this country has handed it to acquire a steep advantage over other nations in the contest for what remains of the planet's fossil fuel supplies.

We need to get very scared, very fast, and start making provisions for ourselves, against the time when we have only 90%, or 70%, or less, of the fuel available that we have now. Right now, we're doing next to nothing, either as a nation, or as individuals. We are still allocating more money to the construction of highways, airports, and sports venues than we are to rail or public transit, and we are still encouraging the construction of suburban sprawl. Team Obama has done good, on one hand, by steeply reducing the subsidies to oil-dependent agribusiness, but offsets it by throwing money at our failing auto makers and at ever more highways and airport expansions.


Anonymous said...

It's frustrating how little the average American understands the direness of our energy situation. I'm afraid it's going to take fuel rationing (which could occur in the not too distant future as the dollar looses it's value making oil prohibitively expensive to import) to wake people up and give Obama the political space needed to to push forward the fundamental changes needed for long term viability.

The North Coast said...

If the dollar continues to lose value against other currencies, it's a sure bet that the worst will happen, which is that oil will cease to be denominated in the dollar.

I really have to be surprised this hasn't already happened, given that we're the world's largest DEBTOR nation. We decided to commit suicide as an economy and as a country by outsourcing our manufacturing and building up a huge trade imbalance, pretty well placing ourselves at the mercy not only of the OPEC nations but of countries still possessing manufacturing capacity as well.

Now we are bankrupt with trillions in debt that is unrepayable, and we're piling up more public debt and endangering our currency, while doing completely nothing to make the arrangements that will be necessary to sustain civilized life in this country when we no longer can obtain the liquid fuels necessary to run the economy and our lives as they are currently structured.