China and Energy

[cloneman]

The final solution for energy crisis: The fusion energy

China shows strong resolve to develop clean energy: ITER

Link China shows strong resolve to develop clean energy: ITER

PARIS, July 28 (Xinhua) -- China had shown its commitment to developing clean energy through its strong support for an international alternative energy program, the head of the program's China office said Wednesday.

The program, known as the International Thermonuclear Experimental Reactor or ITER, aims to emulate the power of the sun to provide limitless clean energy, Luo Delong told Xinhua during a telephone interview.

"China's active participation in the international nuclear fusion project reflects the country's determination to promote the development of clean energy," Luo said.

"It is also in line with China's long-term energy strategy," Luo said.

In a bid to solve the energy shortage and maintain sustainable development, China is working to develop fossil energy and fission energy while vigorously seeking alternative energy sources, according to Luo.

Now it seemed ITER might be a reliable answer to the problem of energy in the long run, he said.

"I can give you an example: after ITER nuclear fusion, the deuterium extracted from one liter of sea water can produce as much energy as that of 300 liters of gasoline," and fusion energy had huge potential, "because it uses the inexhaustible sea water as material," he said.

Moreover, the ITER process won't produce greenhouse gases or cause any pollutants such as high-radiation uranium waste, which made it an ideal energy source for both environmental protection and security, Luo said.

China had devoted a lot of effort and funds to the project, he said.

Luo said China had made great efforts in helping establish the organization and the country would inject about 10 billion yuan (1.4 billion dollars) to the project, about 10 percent of its total cost.

China would also undertake nearly 10 percent of the project, producing various components and transporting them to Cadarache, southern France, where the ITER's reactor units would be constructed, he said.

On Wednesday, the ITER Council, the governing body of the ITER Organization, approved the baseline of overall schedule and costs for the project.

Representatives of the seven ITER members -- China, the European Union, India, Japan, South Korea, Russia and the United States, attended the meeting in Cadarache.

The council said in a statement the ITER project, with a designed capacity to produce 500 megawatts (MW) of fusion power, had fixed a goal to achieve the first plasma in November 2019.

The ITER project was proposed in 1985 and research assessment and design work for an experimental reactor were begun in 1988.

A related ITER Agreement was signed in Paris in November 2006 by ministers from the seven ITER members, officially launching the project.

According to the ITER Agreement, the ITER project will last 35 years and require a total investment of up to 10 billion euros.

It is the second largest international science and engineering project behind the International Space Station, and is also the biggest international science and technology cooperation in which China has taken part so far.

 

[cloneman]

Africa's oil exports to China only account for 13% of total


link:Africa's oil exports to China only account for 13% of total
Africa's oil exports to China accounted for only 13 percent of its total oil exports, lower than the amounts exported to Europe and the US, which both surpassed 30 percent, China's Foreign Minister Yang Jiechi said during a news conference at the ongoing Third Session of the National People's Congress on Sunday, xinhuanet.com reported.

Yang also said China's investment in Africa's oil sector accounted for only 1/16 of the world's total investment in African oil, which is also much less than the amount invested by either Europe or the US.

China's relations with African countries entail more than just cooperation in matters of energy, Yang said, and China always encourages any other country to cooperate with African countries in the energy sector based on the principle of mutual benefit.

Yang went on to point out that most of the eight measures proposed by President Hu Jintao in the Beijing Summit of 2006 have been successfully completed, which has promoted cooperation between China and the countries of Africa. Premier Wen Jiabao announced eight new measures put forward by the Chinese government at the ministerial meeting of the Forum on China-Africa Cooperation in Egypt last November.

Relations between China and African countries have entered a stage of "sound development" and will be more "fruitful" in the future, Yang said.

 

[cloneman]

China Doubles Wind Capacity
Link China Doubles Wind Capacity, Global Energy Consumption Declines

In 2009 China’s installed wind capacity more than doubled to 25.9 gigawatts and overtook Germany (25.8 gigawatts) for second place in terms of total wind installed capacity. The U.S., with 35.15 gigawatts, is in first place.

Last year China added 13,732 megawatts in new wind capacity. The U.S. added 9,922 megawatts and Germany 1,880 megawatts.
Despite the economic recession, global wind generation grew by 31 percent, adding 160 gigawatts. Over the next decade BP’s Statistical Review of World Energy, published Wednesday, predicts wind capacity will grow by 28 percent.

Europe, with 77 gigawatts in installed capacity, remains the largest wind market.

Solar power capacity grew by 47 percent in 2009 to 23 gigawatts. This was slower than 2008 when capacity grew by a record 70 percent. Gobal solar capacity at the end of 2009 is twice as high as it was at the end of 2007.
Germany added 3,800 megawatts in new solar capacity in 2009 to 9.7 gigawatts. Solar installations could slow down in 2010 because of subsidy cuts, which are slated to start next month. In Spain solar installations reached 3.4 gigawatts. Japan added 484 megawatts. U.S. solar capacity grew 7.2 percent to 1.6 gigawatts.

France’s (364.7 megawatts) and Canada’s (102.7 megawatts) solar capacity surged 102.9 percent and 214.1 percent, respectively. Fueling Canada’s growth is Ontario’s investor-friendly green regulation, including its province-wide feed-in tariff.

Geothermal was the slowest growing renewable energy in 2009, adding 397 negawatts. Global capacity reached 10.7 gigawatts, with Indonesia and the U.S. accounting for about 79 percent of that.

In an introductory note to the Statistical Review, BP CEO Tony Hayward first provided an updated on the clean up operations in the Gulf of Mexico, “we are throwing everything we have at mitigating this disaster,” he writes.

 

[cloneman]

China winning renewable energy race

link China's renewable energy edge - Sep. 22, 2010
NEW YORK (CNNMoney.com) -- Five miles off the coast of Shanghai, the Chinese recently completed the country's first offshore wind farm.

The project was completed before construction on the first American offshore wind farm has even begun.

The Shanghai project is not just another wind farm. It's the next generation in wind power technology and the latest example of how China is jumping ahead of the United States.

Earlier this month, the accounting firm Ernst & Young named China the most attractive place to invest in renewables, knocking the United States out of the top position.

The study ranked countries on such things as regulatory risk, access to finance, grid connection and tax climate. It cited the lack of a clear policy promoting demand for renewables in the United States -- a product of Congress' failure to pass an energy bill -- as one of the main factors for the dethroning.

China has already surpassed the United States in the amount of wind turbines and solar panels that it makes. China is also gaining on the United States when it comes to how much of their energy comes from renewable energy sources.

The country that leads in the renewable energy industry, is opening the door to more home-grown jobs.

Cash is pouring in: From an investment point of view, the trend is clear.

In 2009, nearly $35 billion in private money flowed into Chinese renewable energy projects, including factories that make wind turbines and solar panels, according to the research firm Bloomberg New Energy Finance. The United States attracted under $19 billion.

"Within the past 18 months, China has become the undisputed global leader in attracting new investment dollars," Ethan Zindler, head of policy analysis at New Energy Finance, recently told a congressional committee.

Zindler said the money came from not only the Chinese government and banks, but also Western private equity funds and individual investors buying publicly-traded Chinese stocks.

Jobs growth, for China: The result of all this investment money is jobs.

In wind power, China-based companies are on track to make 39% of the turbines sold worldwide in 2010, according to New Energy Finance. U.S.-based companies will make just 12%.

In solar, China-based firms will make 43% of the panels. U.S. firms will make 9%.

Countries that make the most investments will create the most jobs," said Chris Lafakis, an economist at Moody's Analytics, an economic consultancy.

Lafakis, citing a Pew Charitable Trusts study, noted that the overall "green" economy is still pretty small - in the U.S. it employees 770,000 people. But It's growing rapidly - three times as fast as the overall economy.

"It's important to invest in this sector because the jobs of tomorrow will be created here," he said.

Why China: Most analysts feel the investment money is flowing to China because that country has stable policies that encourage the construction of renewable energy power projects.

"China is really taking clean energy to be part of their national strategy," said Gil Forer, one of the analysts at Ernst & Young that ranked China the best place to invest. "They are trying to create a competitive advantage in what many believe will be the industry of tomorrow."

China has instituted a policy that requires a modest 3% of its electric power to come from renewable resources by 2020. This stimulates demand for renewable energy.

In the United Sates, about half the states have such a goal, often with more ambitious targets. But a federal standard has been held up, largely by lawmakers in the Southeast, where wind energy isn't as available.

On Tuesday a new bill with just such a standard was introduced in the Senate with bipartisan support, but analysts say the Senate's busy schedule means the bill has a slim chance of passing this year.

China also requires utilities to buy renewable power at a higher rate than conventional power, a system known as feed-in tariffs.

The United States, by contrast, has a patchwork system of state and federal tax incentives for renewable energy production, which need to be renewed every few years. This is often confusing for businesses in the sector, and does nothing to stimulate demand.

"What we have today is uncertainty, and that is not good," said Forer. "We need to look at this as a strategic decision."

Not buying it: While China may be increasing wind turbine and solar panel manufacturing to grow its economy, some people feel that it isn't as interested in applying the more expensive technology at home.

"It is impossible to tell why they are investing anything at all in [wind farms and solar power plants], which are not competitive with coal," said Myron Ebell, an energy analyst at the Competitive Enterprise Institute, a conservative research and advocacy group. "My guess is that it's window dressing for the West."

Ebell said China is excelling at making renewable energy parts for the same reason they are excelling at making all sorts of other things: low cost, high skilled labor; weak environmental laws; and cheap energy.

The Chinese, Ebell believes, are simply using the West's fascination with wind and solar as a chance to sell it products.

Indeed, while China has surpassed the United States when it comes to making the equipment, it has not yet caught it in terms of renewable energy production.

In 2009 China could produce 25 gigawatts of wind power and under 1 gigawatt of solar, according to Ernst & Young. The United States could produce 35 gigawatts of wind and 2 gigawatts of solar.

One gigawatt can power 780,000 U.S. homes. The world used 4,428 gigawatts of electricity in 2007, according to the U.S. Energy Information Administration.

China isn't expected to produce more renewable power than the United Sates until sometime between 2020 and 2025, according to EIA.

We're No. 2: In talking about Chinese renewable energy, almost all analysts wanted to make two things clear:

One, it's not really a game of the United Sates verses China. Each solar panel or wind turbine contains parts from all over the world, and an expanded market and lower costs benefit everyone.

And two, despite losing the number one spot, the United Sates is still a pretty good place to invest.

"You can't forget that the United States is still No. 2," said Forer.

 

[cloneman]

The U.S. and China - Advancing Clean Energy Research Through Cooperation
link The U.S. and China - Advancing Clean Energy Research Through Cooperation | The White House
Posted by David Sandalow on September 03, 2010 at 10:55 AM EDT
What two countries lead the world in energy consumption, energy production and greenhouse gas emissions? The United States and China. Can our two countries work together to help lead the world in a transition to clean energy? A recent announcement by U.S. Energy Secretary Steven Chu is an important step in that direction.

Yesterday, Secretary Chu announced that the University of Michigan and West Virginia University will each lead consortia under the U.S.-China Clean Energy Research Center. The two consortia will receive $25 million in total funding from the U.S. Department of Energy for this work. These amounts will be matched by the grantees, for a total of $50 million in U.S. funding. The Chinese side will contribute an additional $50 million, for a total of $100 million for this innovative project.

What can we accomplish with this program? First, advances in clean vehicles (the focus of the University of Michigan program). Our two countries are the world’s largest auto markets and largest consumers of petroleum – what we do makes a difference. Second, advances in clean coal, including carbon capture and storage (the focus at West Virginia University). Both the U.S. and China have abundant coal resources – but neither country can afford to burn coal in the 21st century using 20th century technologies.

This announcement is just a start. In the months ahead, the Department of Energy will announce funding for an energy-efficient buildings program under the U.S.-China Clean Energy Research Center, and the Chinese government will announce entities participating on the Chinese side. (Under this program, each country funds its own participants – U.S. funds pay for U.S. institutions and individuals only.)

Two generations ago, citizens of the United States and China were not able to visit the other country. Today we have a vibrant and dynamic U.S.-China relationship in which people from all parts of government and society interact on a daily basis. While the United States and China have differences on important issues, we have a common interest in a clean energy future. Working together, we can accomplish more than acting alone.

David Sandalow is Assistant Secretary for Policy and International Affairs at the Department of Energy

 

[cloneman]

The Booming Economies of Latin America
Written by David Caploe PhD

The Booming Economies of Latin America | Oil Price.com

While the United States and Europe fret over huge deficits and threats to a so-called recovery, this region has a surprise in store.
Latin America, beset in the past by debt defaults, currency devaluations and the need for bailouts from rich countries, is experiencing robust economic growth that is the envy of its northern counterparts.

Strong demand in Asia for commodities like iron ore, tin and gold, combined with policies in several Latin American economies that help control deficits and keep inflation low, are encouraging investment and fueling much of the growth.

The World Bank forecasts that the region’s economy will grow 4.5 percent this year.
Recent growth spurts around Latin America have surpassed the expectations of many governments themselves.

Brazil, the region’s rising power, is leading the regional recovery from the downturn of 2009, growing 9 percent in the first quarter from the same period last year.
Brazil’s central bank said growth for 2010 could reach 7.3 percent, the nation’s fastest expansion in 24 years.

After a sharp contraction last year, Mexico’s economy grew 4.3 percent in the first quarter and may reach 5 percent this year, the Mexican government has said, possibly outpacing the economy in the United States.

Smaller countries are also growing fast.

In Peru, where memories are still raw of an economy in tatters from hyperinflation and a brutal, two-decade war against Maoist rebels that left almost 70,000 people dead, gross domestic product surged 9.3 percent in April from the same month of last year.

“We’re witnessing what are probably the best economic conditions in Peru in my lifetime,” said Mario Zamora, 70, who owns six pharmacies in Los Olivos, a bustling working-class district of northern Lima where thousands of poor migrants from Peru’s highlands have settled.

Vibrancy mixes with grit around his pharmacies.

A Domino’s Pizza vies for customers with Peruvian-Chinese restaurants called chifas. Motorcycle taxis deliver passengers to nightclubs.
Competition, in the form of a newly arrived Chilean pharmacy chain, looms around the corner from his main store.
Los Olivos offers a glimpse into the growth lifting parts of Latin America out of poverty, but big exceptions persist.

In Venezuela, electricity shortages and fears of expropriations caused gross domestic product to shrink 5.8 percent in the first quarter.
But Venezuela, and to a lesser extent Ecuador, another oil-dependent country that lags behind its neighbours in growth, seem to be exceptions to a broader trend.

Even small countries ideologically aligned with Venezuela have adopted pragmatic policies and are faring well.

While Europe was gripped by fears of contagion from Greece’s debt crisis, the credit rating agency Standard & Poor’s upgraded Bolivia in May, citing its sound public finances.

Latin America’s growth largely reflects a deepening engagement with Asia, where China and other countries are also growing fast.
China surpassed the United States last year as Brazil’s top trading partner, and is the second largest trading partner in countries like Venezuela and Colombia, Washington’s top ally in the region.

Some scholars of Latin America’s economic history of ups and downs say the robust recovery may be too good to last, pointing to volatile politics in some places, excessive reliance on commodity exports and the risks of sharply increasing trade with China.

Michael Pettis, a specialist at Peking University in Beijing on China’s financial links with developing countries, said the region was especially exposed to Chinese policies that had driven up global demand for commodities, including what appears to be Chinese stockpiling of commodities.

“Within China there is a ferocious debate over the sustainability of this investment-driven growth,” Mr. Pettis said.

“I’m worried that too few policy makers in Latin America are aware of the debate and of the vulnerability this creates in Latin America.”
Other economists, including Nicolás Eyzaguirre, director of the Western Hemisphere department of the International Monetary Fund, suggest that low international interest rates, another factor supporting Latin America’s growth, will not last much longer.

Even so, they applaud home-grown policies that are supporting growth.

Chile, for instance, saved revenues from copper exports when commodities prices climbed, allowing it to enact a stimulus plan last year and rebound from the February earthquake.
Chile’s economy grew 8.2 percent in April from the previous month, its biggest increase since 1996.

“This time around, the positive shock is probably even better, since some countries saved at least part of their windfall from the good years,” Mr. Eyzaguirre said.

Within the IMF itself, Latin America’s recovery is translating into new political sway, particularly for Brazil, which has paid its debt to the fund and is seeking to enhance its voting stake in it.

As Brazil posts China-level growth, President Luiz Inácio Lula da Silva is nurturing soft-power ambitions, with ventures like a state television station that will broadcast to African nations.

David Rothkopf, a former Commerce Department official in the Clinton administration, pointed to the dozens of embassies and consulates that Mr. da Silva has opened around the world.

“Like other Latin American countries, Brazil needs to improve its infrastructure and train more engineers,” Mr. Rothkopf said, “but it embodies the rise of emerging powers, one of the great themes of this century.”

According to this article in the New York Times, Peru – whose economic growth is expected to rival or outstrip Brazil’s over the next several years – exemplifies the challenges remaining in a sizzling economy.

The country boasts nimble companies like Ajegroup, founded during the chaos of the 1980s.
Now the company’s soft drinks compete with giants like Coca-Cola, not just in Peru but in other Latin American countries as well.

Foreign investment has flowed into Peru, largely in mining. But this investment reveals both weaknesses and strengths. Mining accounts for about 8 percent of economic activity, but about half of tax revenues, creating problems if commodities prices fall, said Pedro Pablo Kuczynski, a former finance minister here.

Deep inequalities also persist, especially between the capital, Lima, and the Andean highlands and the forests of the Amazon basin, where factions of the Shining Path guerrilla group feed off the cocaine trade.

As much as 70 percent of the labor force still works outside the tax system, depriving workers of benefits and the government of revenue. But some of what glitters in Peru’s boom seems to be paving the way for lasting prosperity.

Felipe Castillo, 60, mayor of Los Olivos, is investing tax proceeds in a new low-tuition municipal university for 4,000 students. He gazed recently at the 11-story structure, in a slum that has begun to take on the trappings of a lower-middle-class district.

“Maybe the students at this institution will look at the mistakes of our economic policy in the past as the tragic features of a bygone era,” Mr. Castillo said.

Let’s hope he’s right.

Latin America has generally suffered greatly from a combination of its own mistakes, and often brutal exploitation by the United States government and companies.

If it can join China, India, and other emerging market countries in throwing off the deeply-ingrained political / ideological / societal scars of colonialism and imperialism, it will be a great victory – not just for the people and elites of that region, but the entire world.

David Caploe PhD
Editor-in-Chief
EconomyWatch.com

 

[cloneman]

China Eyes Venezuelan and Brazilian Oil
by COHA Research Associate Adam Trombly

China Eyes Venezuelan and Brazilian Oil / Council on Hemispheric Affairs
As China’s economy soared during the 1980’s, its consumption of foreign oil rose as well, culminating in the country becoming a net importer of oil by 1993. Since this transition, China’s real gross domestic product has maintained annual growth at about eight to ten percent, with Beijing now holding the distinction of being the globe’s third largest importer of oil behind the U.S. and Japan. China’s consumption of oil is expected to steadily increase in the coming years, yet analysts predict domestic production will begin to decline by 2020.
China’s current and ever increasing reliance on foreign oil has necessitated a broad search for oil reserves around the world. This quest has led China increasingly to Latin America, where it recently signed large oil deals with Venezuela and Brazil. This is in addition to its already existing oil related partnerships with Ecuador, Peru, Colombia, and Argentina. China’s funding of these multiple oil projects raises its already growing presence in Latin America, and will further its ubiquitous image on the continent as a deep pocketed investor. In as much as these oil contracts coincide with the recent explosive growth in trade between China, Venezuela and Brazil, the increase in trade will likely spill over to the entire region. In the coming years other countries on the continent will presumably look to strike lucrative deals with China regarding the sale of their natural resources.
In addition to strengthening trade ties, China’s oil contracts with Venezuela and Brazil may carry important political implications. Subsequently, an analysis of China’s goals in the region reveal to what degree U.S. officials have reason to view Beijing’s oil diplomacy in South America with alarm. Analysis of the financial impact of these deals for Caracas and Brasilia reveals what factors motivated these two South American countries to sign multi-billion dollar contracts with Bejing
Oil Deals With Venezuela:

On September 16, 2009 Venezuelan President Hugo Chávez announced the signing of an
agreement between Venezuela’s Petroleos de Venezuela (PDVSA), and one of China’s state run oil firms, China National Petroleum Corporation (CNPC). The deal reportedly calls for China to invest $16 billion over three years and will fund the development of oil in the Junin 4 block of Venezeuela’s Orinoco River belt. On December 22, 2009 the China National Offshore Oil Corporation (CNOOC) signed an agreement with Venezuela calling for the former to help develop the Boyaca 3 oil block in the Orinoco river belt. Currently, Venezuela supplies China with 400,000 barrels of oil a day, but it aims to increase these production figures to one million barrels by 2013. This would put Venezuela’s export of oil to China in line with its current export levels to the U.S. Furthermore, Caracas and Beijing plan to work on joint refinery projects in Guarico (Venezuela) and Guangdong Province (China) that would process Venezuela’s extra-heavy crude oil in order to make it serviceable.

Effect on Venezuela:

Following its successful strategy of attaching infrastructural aid projects to oil deals in Africa, the Chinese government established a four billion dollar development fund in Venezuela that would pay for improvements to infrastructure and social development projects. This includes the building of railroads, housing, highways and schools. A Los Angeles Times report in January of last year stated that Beijing had agreed to provide billions more in funding for another round of similar development projects in the future. The aforementioned oil contracts and Chinese sponsored infrastructural projects appear to represent a windfall for Venezuela and Chávez, but experts are skeptical as to whether these deals will ever come to fruition. Venezuela is known for its propensity to make headline-grabbing announcements and has recurrently been unable to follow through on complex oil projects and intensive infrastructural ventures. In addition, the Chinese lack refineries for Venezuela’s unique extra-heavy crude oil, which are otherwise only available in the U.S. and the Caribbean, and are jointly run by PDVSA and U.S. entities.

Professor Riordan Roett, the Director of Latin American Studies at John Hopkins School of Advanced International Studies, told the Council on Hemispheric Affairs (COHA) about his doubts regarding recent oil deals between China and Venezuela. “If this project is in the hands of the Chinese it may happen, and if it’s in the hands of the Venezuelans it probably won’t happen. All you have to do is look back on the track record of Chávez. Whether it’s ALBA, The Bank of the South, building pipelines across the continent, none of these things have happened because one, he can’t afford them, and two, his regime is incompetent.”

Even though these agreements with China are not binding and the financing is not close to entering Venezuelan bank accounts, Chávez has spoken pridefully of Venezuela’s oil contract with the CNPC. Notably, at the same time, the Chinese have sat back and publicly made only passing mention of forthcoming projects in the South American nation. The contrasting silence between officials in Beijing and the public announcements by Chávez suggest differing intentions and motives of these two governments. In February 2009 Chávez went so far as to declare, “All the oil China needs for the next 200 years, it’s here. It’s in Venezuela.” Chávez publicizes these agreements because he regards them as a fait accompli and because they legitimize his rule. For the Venezuelan President, the deals with China demonstrate his diplomatic capacity to orchestrate lucrative oil contracts while simultaneously raising the global economic relevance of his country.

On the other hand, China has its own reasons for not speaking publicly about its commodity agreements with Chávez. For one thing, China may not be that committed to extracting Venezuela’s hard crude oil, and it may not even see itself following through on its non-binding agreement. It is also possible that China’s coyness when it comes to this topic is based on the country’s desire to not ruffle the feathers of the U.S., which has a close, if somewhat sclerotic economic relationship with Venezuela, but is increasingly at odds with it diplomatically. In an interview with COHA, Cynthia Watson, a professor at the National War College specializing in East Asian and Chinese Affairs, referred to China’s respect for the U.S.’s standing in South America, noting that, “China is willing to engage with Venezuela, but it is very cautious to not step on the toes of the U.S. China sees Chávez as a volatile leader, and it does not want to be part of the chaos that he entails.”

Brazilian-Chinese Oil Deals

Unlike Venezuela, which struggles mightily when oil prices drop due to its oil-focused economy, Brazil has weathered the global recession and the downturn in oil prices quite handily. In part, this is due to Brazil having the most diversified economy in Latin America, and its government’s healthy operating budget that does not solely rely on oil revenue to fund infrastructural projects. However, even with abundant cash reserves, Brazil is turning to outside lenders such as China in order to help fund the development of its vast oil potential. Brazil recently discovered extensive reserves in the sub-salt layer about 200 miles off its coast, but much work lies ahead before it can begin extracting this oil. These off-shore reserves are miles below the surface and covered by rock and salt deposits, requiring sophisticated technology that will be extremely costly to mobilize.

Due to the recent economic downturn, there are fewer lenders with the disposable capital to facilitate such costly long-term projects. However, deep-pocketed, state-sponsored oil firms in China are more than happy to fill this void. In May of 2009, in return for a Chinese loan of $10 billion, Brazil signed an agreement with Beijing to provide as many as 200,000 barrels a day, at market prices for the next ten years. Other than simply looking to outsource some of the risk associated with such an expensive project, Johns Hopkins’ Riordan Roett believes that Brazil likely came to this agreement with Beijing as a way to “put another building block in the strategic relationship with China. Brazil is perfectly aware that China needs its soy beans and iron ore; and if it now can have a ten-year agreement to supply China with oil, it is only one more brick in an important evolving relationship.”

As the current agreement stands, Chinese oil firms have no stake in the extraction of oil from Brazil’s sub-salt region. Erica Downs, an expert in Chinese energy security, expressed to COHA her belief that China loaned Brazil the $10 billion with the hope that this would ultimately lead to a Chinese oil firm drilling in its sub-salt terrain. Brazil’s ability to take on this complex drilling project without technological assistance from other international oil firms is due to Petrobras’ pre-eminence as an operator at offshore drilling sites. Petrobras already is recognized as one of the most technologically advanced oil firms in the world when it comes to offshore drilling, and it has no real need for Chinese technological assistance in these drilling projects.

Strengthening Trade Ties with Latin America

While ensuring its own long term energy requirements may have served as the impetus for China’s oil deals with Venezuela and Brazil, Beijing’s involvement in the region will also result in the fostering of stronger trade relations with all of Latin America. For a cash-strapped, but oil rich country such as Venezuela, these oil contracts could help fund lagging social welfare programs as well as important construction and infrastructure projects in the immediate future. After viewing the benefits of supplying China with oil, other Latin American countries are likely to be motivated to want to provide it with various other commodities. China’s ever-growing need for a steady supply of Latin America’s abundant resources—iron ore, copper, aluminum, nickel, and soya–suggest that the Chinese consumption as well as the dependence on Latin American commodities will continue to grow for years to come. Beijing would be well served to follow the investment strategy it has pursued in Africa and introduce numerous infrastructural projects in Latin America in order to prevent any future push back from those nations that could come to view China as being exploitative.

Latin American countries that are today supplying China with a steady stream of natural resources, but are at the same time experiencing enormous trade deficits with China in the manufacturing sector, should use their leverage (China’s appetite for their natural resources) to try and pressure China to reduce its vast trade surplus. At the present time, China continues to flood the region with cheap manufactured products, while simultaneously importing a small percentage of their manufactured goods. If Beijing does take action to boost Latin American exports to China in return for assurances that commodities will continue to flow to China, the sale of such resources will have brought Latin America very tangible benefits.

China’s Growing Political Ties with Latin America

In addition to expanding trade ties between China and Latin America, an added benefit of China’s oil deals in the region will be the strengthening of political bonds between those nations. With contract negotiations necessitating frequent high-level meetings between the Chinese, Venezuelan and Brazilian officials, all sides are able to come to a better understanding of their respective counterparts. China and Brazil share a particularly close connection, as they are both large developing countries experiencing enormous economic growth while simultaneously enjoying greater international influence and attention. The emerging status of Brazil and China on the global stage has led to frequent discussions between the two countries as evidenced by their close cooperation at the recently held climate change talks in Copenhagen.

Furthermore, there are signs that Brazilian-Chinese cooperation may become a function of the waning U.S. influence on Brazil. In April and May of 2009 China overtook the U.S. as Brazil’s biggest trade partner, largely due to the increase in the amount of iron ore and soy exports to China. During Brazilian President Lula’s visit to Beijing last year, he met with Chinese President Hu Jintao, and reportedly discussed trading in their own currencies rather than the U.S. dollar. While the change in what currencies are utilized for trading is unlikely to happen this year, as trade continues to increase between the two countries, there will be growing pressure to move away from the American dollar.

When asked about the talks between China and Brazil, Sergio Gabrielli, the chief executive of Brazil’s state oil firm, Petrobras, stated in May of 2009; “The U.S. has a problem. There isn’t someone in the U.S. Government that we can sit down with and have the kinds of discussions we’re having with the Chinese.” While Chinese-Brazilian relations appear to be gaining momentum, Chinese- Venezuelan relations are developing more slowly, likely due to Beijing’s hesitancy to take on the political problems involved in embracing the turbulent regime of Hugo Chávez.

Should the U.S. be Alarmed by China’s Oil deals in South America

The decision by Chinese officials to branch out beyond its traditional oil sources was likely precipitated by Beijing’s desire to shore up its energy security, as opposed to primarily being an attempt to usurp American influence in the region. With the majority of its oil originating in the Middle East and eventually traveling through the narrow Straits of Malacca, China’s oil supply potentially could be compromised by international conflicts affecting these respective vulnerable regions. By spreading its risk geographically and maintaining a diverse grid of supply lines around the world, China is less susceptible to regional flare-ups or other unforeseen scenarios such as natural disasters.

While the U.S. has had many years to shore up its own energy security by signing multiple oil contracts with its neighbors, as well as with countries in the Middle East, the alacrity with which China’s economy has grown has not afforded the country much time to establish crucial oil contracts. This has forced China to enter into contracts for less propitious oil arrangements in which other countries have been uninterested. China’s determination to ensure its own energy security is further demonstrated by its signing of oil and mineral contracts with otherwise disgraced rogue governments of Sudan and Zimbabwe. Beijing’s apparent willingness to take a hit internationally by supporting these pariah states suggests that that China’s emerging presence in Latin America is yet another example of its determination to make deals with whoever has vital commodities for sale
As China appears to be moving closer to Latin America through its oil deals and an assortment of other trade links, Washington has yet to show signs of discomfort with this burgeoning relationship. Amid the wars in Iraq and Afghanistan, and the attention the White House has given to the combative regimes in Iran and North Korea, the U.S. Government has paid little notice to Latin America in recent years. This potentially could change if China continues to strengthen its ties in Latin America, and U.S. officials decide that they must, once again, assume a greater presence in the region.
The U.S. Government is slowly seeing its influence wane in Southeast Asia as China’s “string of pearls” strategy is drawing it closer to its regional neighbors (with the exception of India). As it loses some of its influence in this distant hemisphere, and China’s presence in Latin America grows, the Obama administration may once again have a good deal of impetus to try to cultivate its relationship with nations to its south. This especially could ring true if the Sino-U.S. relationship becomes more adversarial in the future because it could lead the U.S. to further engage Latin America in order to shut out China from what was once known as the U.S.’s “sphere of influence.”

 

[cloneman]

CNOOC looking to Latin America for oil, gas
By Wan Zhihong and Liu Yiyu (chinadaily.com.cn)
Updated: 2010-07-14 17:28
CNOOC looking to Latin America for oil, gas

The China National Offshore Oil Corporation (CNOOC) is eyeing Argentina and other Latin American countries for oil and gas development.
CNOOC will facilitate this through a joint venture set up in March this year with Bridas Energy Holdings (BEH) of Argentina, said Fu Chengyu, president of CNOOC during a meeting with Julio de Vido, Argentinean minister of planning and development.

Fu said cooperation between CNOOC and BEH will increase the business link between China and Argentina, as well as with other countries in Latin America.

De Vido said that in addition to energy, they are also very interested in increasing Chinese investments in agribusiness and tourism in Argentina.

 

[cloneman]

China drills deeper into Latin America
Asia Times Online :: China News, China Business News, Taiwan and Hong Kong News and Business.

By Russell Hsiao

Norwegian oil company Statoil announced on May 21 that it agreed to sell to Chinese state-owned Sinochem Group a 40% stake (US$3 billion) of the Peregrino field located in the Campos basin offshore of Brazil. The Peregrino announcement closely follows the disclosure in March that another major Chinese state-owned oil company, China National Offshore Oil Company (CNOOC), was acquiring 50% ($3.1 billion) of a joint venture with Argentina's Bridas Energy Holdings Ltd.

While the two transactions are still subject to their respective governments' approval, these agreements highlight the renewed focus of Chinese activities on Latin America, markedly raising China's stakes and profile in the region. The apparent surge of Chinese interests in the region demonstrated by the raft of recent deals also laid bare Beijing’s geopolitical strategy to assure a
diversified energy supply and evolving strategic partnership with Latin America.

In Brazil, according to the Chinese Communist Party-owned Global Times, China Development Bank (CDB), China Petroleum and Chemical Corporation (Sinopec) and Brazilian state-run energy giant Petroleo Brasileiro SA (Petrobras) signed an "oil-for-loan" agreement that stipulates that Petrobas will be committed to a 10-year oil supply (of roughly 200,000 barrels of oil per year) to Sinopec in exchange for $10 billion worth of loans from the CDB within the next 10 years.

In Argentina, CNOOC president Yang Hua commented, "Bridas, with a world-class oil and gas asset portfolio, is a very good beachhead for us [CNOOC] to enter Latin America. Through this transaction, we'll establish a fair presence in this region, which will further enable the company's production and reserve growth in the future." Bridas also has exploration and production operations in Bolivia and Chile, and according to a CNOOC statement filed with Hong Kong’s stock exchange, it owns 40% of Pan American Energy LLC, an affiliate of BP Plc. (Business Week, March 14).

In Venezuela, China agreed in April to extend $20 billion of loans to Caracas, with the payment terms being $10 billion and 70 billion yuan ($10.25 billion). China and Venezuela will reportedly form a joint venture to operate the Junin-4 Block located in the Orinoco heavy oil belt, which is expected to yield 2.9 billion barrels of extra-heavy crude over the 25-year contract term. According to Wang Peng, a Latin America researcher at the prestigious Chinese Academy of Social Sciences, the significance of the loan is that, "The 70 billion yuan fund will be a trial to internationalize the yuan. Given the large oil reserves and oil potential, the settlement of the deal in yuan will raise the Chinese currency’s position in oil trade."

In order to reduce its vulnerability to high oil prices, China has intensified its courting of Latin America as one of its three major regional energy suppliers (the others being Russia/Central Asia and the Middle East/Africa). While China's energy imports from Latin America lag in comparison to such imports from other regions, China's substantial commitments in Argentina, Brazil and other areas are strong indicators of the push to come.

As these recent cases also demonstrate, China's presence in Latin America is not confined to securing access to markets and sources of primary products. It is also strategic. Given Brazil's and Argentina's relatively sophisticated level of development in several high-technology sectors, it is not surprising to see Brasilia and Buenos Aries emerge as hubs of China's push into the region. Progress in trade, investment and political and military cooperation are usually tied to cooperation in the energy sphere. Indeed, both Brazil and Argentina possess a vibrant nuclear industry, a robust aerospace industry and a telecommunication infrastructure, among others.

Against the backdrop of the global financial crisis, Chinese activities in Latin America have become notably more pronounced. The impact that the crisis has had on Western economies cannot be understated, and the depth of China's strategic partnership with countries in the region is becoming clear as China becomes more confident and assertive in conducting its foreign policy. While it remains unknown at what cost to US interests China's strategic partnerships with Latin America will have in the long-term, it behooves Washington to engage Latin America and maintain friendships throughout the region as the power gravity slowly shifts east.

(This article first appeared in The Jamestown Foundation. Used with permission.)

(Copyright 2010 The Jamestown Foundation.)

 

[muse]

friends, in a piece above, former ambassador from India, Bhadrakumar, say of China's foreign policy that China has built long term relations of "win-win" by using development and trade as the substance of her foreign policy - now look who wants to follow the direction set by China:


Thursday, September 23rd 2010 - 04:56 UTC
Obama promises to revamp US foreign policy; helping poor countries is “national interest”

President Barack Obama has told the UN a revamped US foreign aid policy will help lift nations out of poverty by focusing on good governance and encouraging trade and investment.

Mr Obama told the UN summit in New York on the Millennium Development Goals that the focus should be on development, not dependence. But he insisted helping poor nations was in the US national interest.

He said the US would do its part to help lift millions out of poverty. But with five years left to reach the Millennium Development Goals (MDG), Mr Obama said the world “must do better”.

The eight MDGs were adopted in 2000, and include improving health care, increasing access to education and promoting equal rights for women.

“If the international community just keeps doing the same things the same way, we will miss many development goals,” Mr Obama said.

He said it was in the US and other rich nations', interests to help the world's poorer countries, despite the economic downturn.

“In our global economy, progress in even the poorest countries can advance the prosperity and security of people far beyond their borders, including my fellow Americans.”

He said: “When millions of fathers cannot provide for their families, it feeds the despair that can fuel instability and violent extremism.”

He announced a new focus in US aid on moving beyond providing assistance to offering “nations and peoples a path out of poverty”.

This would be done by working with co-operative nations to develop their economies over the long term. Countries that were willing to create attractive environments for investment and trade would be helped, Mr Obama said.

He also said democracy and good governance would be encouraged and corruption fought. “We know that countries are more likely to prosper when governments are accountable to their people. So we are leading a global effort to combat corruption.

”We will reach out to countries making the transition from authoritarianism to democracy, and from war to peace. The people of Liberia show that even after years of war, great progress can be achieved,“ Mr Obama added.

BBC diplomatic correspondent Jonathan Marcus says this was a restrained, even humble speech, suggesting an America that wants to listen to others whilst still willing to lead on the global stage.

Earlier, UK Deputy PM Nick Clegg confirmed that the UK was committed to increasing the money it gave in overseas aid, and called on other rich nations to follow its lead.

Mr Clegg told the UN that the UK would raise its spending on aid from 0.5% of annual economic output to 0.7% from 2013.

Earlier in the day the UN launched a 40 billion US dollars health initiative aimed at saving the lives of 16 million women and children over the next five years.

Announcing the Global Strategy for Women's and Children's Health, UN Secretary General Ban Ki-moon said women and children ”play a crucial role in development”.

 

[Aeon]

Recent Venezuelan election results loosen Hugo Chavez's power as opposition parties make big gains, claiming new seats in the Asamblea Nacional and winning the majority of the popular vote. However, Chavez has called the results a 'solid victory'. Attorney & author Eva Golinger in Caracas, Venezuela said Chavez still holds a majority, he simply does not hold the two-thirds supermajority he once held. The victory is substantial, she argued. Golinger explained that the pro-Chavez parties can still pass a number of reforms; however those that require a two-thirds majority will be harder to pass. She also accused international bodies and US agencies of interfering in the elections by supporting opposition groups.

--RT

This might have some future effect on China's energy procurement from Venezuela down the line.

 

[cloneman]

friends, in a piece above, former ambassador from India, Bhadrakumar, say of China's foreign policy that China has built long term relations of "win-win" by using development and trade as the substance of her foreign policy - now look who wants to follow the direction set by China:


Thursday, September 23rd 2010 - 04:56 UTC
Obama promises to revamp US foreign policy; helping poor countries is “national interest”

President Barack Obama has told the UN a revamped US foreign aid policy will help lift nations out of poverty by focusing on good governance and encouraging trade and investment.

Mr Obama told the UN summit in New York on the Millennium Development Goals that the focus should be on development, not dependence. But he insisted helping poor nations was in the US national interest.

He said the US would do its part to help lift millions out of poverty. But with five years left to reach the Millennium Development Goals (MDG), Mr Obama said the world “must do better”.

The eight MDGs were adopted in 2000, and include improving health care, increasing access to education and promoting equal rights for women.

“If the international community just keeps doing the same things the same way, we will miss many development goals,” Mr Obama said.

He said it was in the US and other rich nations', interests to help the world's poorer countries, despite the economic downturn.

“In our global economy, progress in even the poorest countries can advance the prosperity and security of people far beyond their borders, including my fellow Americans.”

He said: “When millions of fathers cannot provide for their families, it feeds the despair that can fuel instability and violent extremism.”

He announced a new focus in US aid on moving beyond providing assistance to offering “nations and peoples a path out of poverty”.

This would be done by working with co-operative nations to develop their economies over the long term. Countries that were willing to create attractive environments for investment and trade would be helped, Mr Obama said.

He also said democracy and good governance would be encouraged and corruption fought. “We know that countries are more likely to prosper when governments are accountable to their people. So we are leading a global effort to combat corruption.

”We will reach out to countries making the transition from authoritarianism to democracy, and from war to peace. The people of Liberia show that even after years of war, great progress can be achieved,“ Mr Obama added.

BBC diplomatic correspondent Jonathan Marcus says this was a restrained, even humble speech, suggesting an America that wants to listen to others whilst still willing to lead on the global stage.

Earlier, UK Deputy PM Nick Clegg confirmed that the UK was committed to increasing the money it gave in overseas aid, and called on other rich nations to follow its lead.

Mr Clegg told the UN that the UK would raise its spending on aid from 0.5% of annual economic output to 0.7% from 2013.

Earlier in the day the UN launched a 40 billion US dollars health initiative aimed at saving the lives of 16 million women and children over the next five years.

Announcing the Global Strategy for Women's and Children's Health, UN Secretary General Ban Ki-moon said women and children ”play a crucial role in development”.

´Umm,this will be interesting.But its hard to say if the US changed its foreign policy or just Mr.Obamas personal oppinion.It will be needed at least 2 or 3 years for obzervation.

 

[cloneman]

Russia wants to supply all of China's gas needs
Russia wants to supply all of China's gas needs - The Economic Times

BEIJING: wants to supply with all its gas needs, a Russian leader said while in Beijing on Monday, underscoring closer cooperation between the resource-rich country and energy-hungry China.

Russian Deputy Prime Minister Igor Sechin told reporters while on a visit to Beijing that Russia is in talks with Chinese partners on plans to launch gas supplies to China starting in 2015, according to the state ITAR-Tass news agency.

``Russia is ready to meet China's full demand in gas,'' Sechin was quoted as saying in the report.

Russia is the world's biggest energy producer and China is the world's largest energy consumer, overtaking the United States last year.

Although Europe remains Russia's largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.

Sechin is part of a delegation accompanying President Dmitry Medvedev on a three-day visit that started Sunday. Medvedev met Chinese President Hu Jintao for talks Monday and the sides were expected to sign a series of agreements at the end of the day.

``I believe that the contact between the two countries is completely in the interest of the Russian and Chinese peoples,'' Medvedev said in opening remarks.

Sechin said that if talks with China on gas supplies went well, Russia could sign commercial contracts by the middle of next year, ITAR-Tass said.

In late August, Russia opened its section of a 625-mile (1,000-kilometer) crude from eastern Siberia to China, which will connect Russian oil fields with Daqing, a major oil production base in northeastern China.

Russia and China split bitterly 50 years ago over interpretations of communist ideology. In recent years, their relationship has warmed but they remain divided by culture and a preference in both capitals for acting independently.

Both see themselves as rivals to Washington and all three are permanent members of the U.N. Security Council. China and Russia have close ties to Iran and though they supported U.N. sanctions adopted last month against Tehran over its suspected nuclear program, they have objected to stronger measures

 

[maxx]

I don't think it'd go through. Someone up there must have common sense to realise from a purely strategic point of view, getting energy from only one source is a bad idea.

 

[no_name]

They are trying to sell as much gas as possible before the green energy revolution.

China still have large demands for coal, which they have, and gas, which they don't have.