Sizing Up the Competition –

Is China The Endgame?

by Dale Allen Pfeiffer, FTW Contributing Editor for Energy

Sept. 25, 2002, 16:00 PDT (FTW) – In the last 50 years of the United States’ quest for hegemony, it has viewed its chief antagonists either ideologically (the Soviet Union and Red China), or economically (Germany and Japan). These antagonists were either overcome or co-opted. In the last decade of the 20th century, the U.S. occupied the unparalleled position of being the world’s only superpower. Now, as we enter the 21st century, this unopposed superpower — at the peak of its military supremacy — may have an Achilles heel. It is running out of energy and so is the planet as a whole.

The 20th century was an era of technological, industrial and economic progress predicated upon the virtually unrestricted consumption of resources. But the rampant consumption of the 20 century cannot last, not on a finite planet where such consumption is dependent upon nonrenewable resources. The coming century will be an era of resource depletion, as the greed of the last century takes its toll upon the planet.

Be this as it may, the world public does not yet recognize this change. Consumer demand is ever increasing. In fact, the capitalist economy is dependent upon ever increasing consumption — without it, the economic base will stagnate and collapse. And while consumer demand for the key item of energy is expected to increase over the next couple of decades, energy production has reached a plateau and will begin an unalterable decline within the next decade. Very soon there will not be enough.

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CONCLUSIONS

If energy demand in China, India and Indonesia is allowed to grow as much as analysts say it will, then these three countries may very well crowd the rest of the world out of the energy market. Furthermore, the studies quoted here do not figure in oil production peak and beginning production decline by 2010. These studies are predicated on rising oil production until at least 2020. Even the Oil and Gas Journal is now issuing warnings that oil production will not be able to meet demand by the end of the decade. The IEA forecasts that world demand for oil will be at 119 mb/d by 2022. Yet even they offer no word about how this demand will be met.41

It is plain that growing energy demands will bring China, India and Indonesia into conflict with the developed world. The United States in particular, as the top world consumer of oil, will likely either have to curb consumption to make room for other countries or will have to find some way to curb the demands of the emerging energy consumers. Moreover, competition for diminishing oil resources could threaten the U.S. dollar hegemony over world oil transactions.

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