USA, China Clash over Peak Oil May Endanger World Peace - 8/30/07

Peak Oil may have put the United States on a collision course with China as the two nations compete for African oil reserves. "Peak Oil" refers to the fact that worldwide, per capita petroleum production peaked in 2000 or so. Owing to population growth, even though more actual barrels of oil per day are extracted, the amount of oil pumped per person continues to drop.

American companies helped create the situation, but seem unconcerned over the prospect of facing off with China over oil. In the late 1990s, one of GM's annual reports focused on that company's efforts to open the Chinese market to US-made cars. The report stated that GM intended to bring personal transportation to 1 billion Chinese. Investors and oil companies loved the idea of practically limitless profits, and GM continues its commitment to personal mobility in heavily populated Asian nations today.

In the United States,auto makers, encouraged by weakened environmental standards, produced and marketed gas-guzzlers like turbo-charged pickups, SUVs, and Hummers, which Americans bought in droves. After the bombing of the World Trade Centers, Americans were barraged with advertisements for vehicles with low- and zero-interest loans. These promotions were almost exclusively for high-consumption vehicles. There were efficient vehicles being produced. Toyota introduced both the Echo, a four-cylinder wonder that got 40 mph and the Prius, a gas-electric hybrid during this time, but the vehicles went nearly un-promoted.

Soon after WTC, the U.S. military deployed to countries where oil production was the major business, coincidentally destabilizing governments and the oil markets, and causing gasoline prices to first double, and at times, triple. Transportation is not the only oil-dependent industry in the US. Prices of agricultural products are beginning to rise with production costs, and as the demand for agriculturally produced fuels places upward pressures on the price of corn.

Meanwhile, auto makers are creating a Chinese version of the American dream, with a car in every driveway, and the Chinese are faced with a rapidly growing demand for gasoline that has already outstripped domestic production.

At present, the U.S. military is present in Afghanistan and Iraq, and the current administration is eyeing Iran. Meanwhile, Chinese companies are busy in Africa attempting to stake their claims to that region's black gold. Not to be outdone, the United States Department of Defense is preparing AFRICOM for operations beginning in October. In a Defense Department report, officials downplayed the military aspect of the operation, stressing its economic and diplomatic aims, but the organization is responsible for security, a primarily military objective, and is headed by General William E. Ward.

Meanwhile, US and Chinese citizens burn as much gasoline as they can comfortably afford. Hybrid cars are expensive and still consume gasoline. Petroleum resources are finite. The Chinese want oil, and lots of it. What remains to be seen is what they or the United States are willing to do to get it.

Learn More about Peak Oil

Back to the Resources Page