This piece originally appeared at TomDispatch.
Future historians may well agree that the twenty-first-century Silk Road first opened for business on December 14, 2009. That was the day a crucial stretch of pipeline officially went into operation linking the fabulously energy-rich state of Turkmenistan (via Kazakhstan and Uzbekistan) to Xinjiang Province in China’s far west. Hyperbole did not deter the spectacularly named Gurbanguly Berdymukhamedov, Turkmenistan’s president, from bragging, "This project has not only commercial or economic value. It is also political. China, through its wise and farsighted policy, has become one of the key guarantors of global security."
The bottom line is that, by 2013, Shanghai, Guangzhou and Hong Kong will be cruising to ever more dizzying economic heights courtesy of natural gas supplied by the 1,833-kilometer Central Asia Pipeline, then projected to be operating at full capacity. And to think that, in a few more years, China’s big cities will undoubtedly also be getting a taste of Iraq’s fabulous, barely tapped oil reserves, conservatively estimated at 115 billion barrels, but possibly closer to 143 billion barrels, which would put it ahead of Iran. When the Bush administration’s armchair generals launched their "Global War on Terror," this was not exactly what they had in mind.
China’s economy is thirsty, and so it’s drinking deeper and planning deeper yet. It craves Iraq’s oil and Turkmenistan’s natural gas, as well as oil from Kazakhstan. Yet instead of spending more than a trillion dollars on an illegal war in Iraq or setting up military bases all over the Greater Middle East and Central Asia, China used its state oil companies to get some of the energy it needed simply by bidding for it in a perfectly legal Iraqi oil auction.
Meanwhile, in the New Great Game in Eurasia, China had the good sense not to send a soldier anywhere or get bogged down in an infinite quagmire in Afghanistan. Instead, the Chinese simply made a direct commercial deal with Turkmenistan and, profiting from that country’s disagreements with Moscow, built itself a pipeline which will provide much of the natural gas it needs.
No wonder the Obama administration’s Eurasian energy czar Richard Morningstar was forced to admit at a congressional hearing that the United States simply cannot compete with China when it comes to Central Asia’s energy wealth. If only he had delivered the same message to the Pentagon.
That Iranian Equation
In Beijing, they take the matter of diversifying oil supplies very, very seriously. When oil reached $150 a barrel in 2008—before the US-unleashed global financial meltdown hit—Chinese state media had taken to calling foreign Big Oil "international petroleum crocodiles," with the implication that the West’s hidden agenda was ultimately to stop China’s relentless development dead in its tracks.
Twenty-eight percent of what’s left of the world’s proven oil reserves are in the Arab world. China could easily gobble it all up. Few may know that China itself is actually the world’s fifth-largest oil producer, at 3.7 million barrels per day (bpd), just below Iran and slightly above Mexico. In 1980, China consumed only 3 percent of the world’s oil. Now, its take is around 10 percent, making it the planet’s second largest consumer. It has already surpassed Japan in that category, even if it’s still way behind the United States, which eats up 27 percent of global oil each year. According to the International Energy Agency (IEA), China will account for over 40 percent of the increase in global oil demand until 2030. And that’s assuming China will grow at "only" a 6 percent annual rate which, based on present growth, seems unlikely.