Global Economy
From Dickinson College Wiki
Future Problems between the World’s Superpowers
- As the world’s society moves forward in time, the demand for oil by countries throughout the world will continue to increase. Countries once deemed technologically inferior to superpowers such as the United States and Britain are quickly escalating themselves to become as or more technologically advanced then the current world leaders. China is the leading candidate to join the superpowers from the lower ranks of world powers, both militarily and economically. The rapid progression of the Chinese society led to their continual dependence on oil, and has left a disturbing question: “Is there enough oil in the world for both countries?”
- The need to for analysts to worry about this growing problem stems from taking a looking back in history only sixty-seven years ago. Japan, then the quickest growing Asian power, became heavily reliant upon oil, and their need for oil dragged them into a world war. With China’s economy “growing at a phenomenal 8% to 10% a year” (Luft), they are predicted to be the world’s leading oil consumer by 2030 (Luft). Although optimists believe that China and the United States oil dependence can bring the two countries closer diplomatically, history contradicts this motion. As both countries continue to use one of the world’s most valuable but scarce resources, tension between the two turn to the world’s most tumultuous region: the Middle East. As both countries continue to pursue their interests in the region, more than money is in exchange for oil. The Chinese have supplied Saudi Arabia with intermediate range ballistic missiles, thus helping the most powerful country in region become more dangerous. As US-Saudi tension grows, China has put itself in position to become Saudi Arabia’s biggest oil purchaser. So as China becomes a larger player in the Middle Eastern market, the United States is quickly running out of options to stop the rising superpower from moving into US dominated markets.
- As China continues its increasing dependency on oil, the United States has very few options to halt that continuance. Luft’s conclusion is that the United States needs to work in conjunction with China to develop their interest in using next-generation fuels and to bypass oil completely. This is possible due to China’s underdeveloped oil infrastructure. If China were to proceed with the use of oil, they would have to undergo a multibillion dollar project to build that infrastructure since their energy has been primarily dependent on coal. The United States needs to stress the importance of using next generation fuels so that there could be mutual benefits for each country, rather than competition and a possible war.
- Gal Luft is the executive director of the Institute for the Analysis of Global Security and has had articles published several times in the LA Times.
What Does This Mean for Other Regions?
- The world’s dependence on oil means that the world must depend on the Middle East. Home to more than seventy percent of world’s proven oil reserves; the Middle East is the world’s biggest player in the oil market. With the emergence of China’s dependency upon oil, countries like Saudi Arabia are position to make larger profits but at the cost of one of the superpowers usage. The competition for oil between the two countries has resulted in weapons of mass destruction along with other arms trafficking that has made countries such as Iran, Syria, and Iraq dangerous to the entire world. As China’s dependency on oil increases, officials believe the relationship between the Chinese government and terrorist-sponsoring governments will continue.
- Although the focus has been on the Middle East, other regions are beginning to prosper due to China’s growing dependency. One region that has received much attention is North and South America. Surprisingly, Canada is the United States largest petroleum supplier, but recently, Canada’s largest oil companies have been interested in exporting to China. Many company’s like Enbridge are pushing ahead with efforts to build a billion dollar pipeline which will quickly move oil from the fields in Alberta to the coast in British Columbia for transport across the Pacific. Another country caught in a rift is Venezuela, who is South America’s largest exporter of oil to the United States. Like Canada, Venezuela is a major contributor of oil to the US, but they too realize the profit that can be made if they were to begin exporting to China. If the United States were to lose out on a bid to continue importing oil from Canada and Venezuela, they would have search elsewhere to fill their need. Some regions which have been mentioned for future trading are West Africa, the Caspian, and other parts of the tumultuous Middle East.
