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Hot Air Exclusive: EPW report on China's supposed green leadership, interview with James Inhofe
December 8, 2010

Posted by Matt Dempsey Matt_Dempsey@epw.senate.gov

Hot Air  

Exclusive: EPW report on China's supposed "green" leadership, interview with James Inhofe 

December 8, 2010

by Ed Morrissey

Link to U.S. Senate Report

Link to Inhofe Press Release

Link to Hot Air  



This morning, the minority caucus of the Senate's Environment and Public Works Committee will release a report that attempts to deconstruct the myth of China's commitment to so-called "green energy."  In fact, China produces less than 1% of its domestic energy in the form of non-hydro renewables.  While Thomas Friedman writes paeans to China's authoritarian regime and its ability to use its command economy to dictate development of renewable energy sources, the truth is that China is heavily invested in coal.  In an exclusive first look at the report for Hot Air readers, the report shows that China is on a course to dominate the oil markets in both production and consumption - partnering with our adversaries to get to a dominant position, while China already leads the world in coal:

One cannot have a clear picture of China's energy policy without considering its production and consumption of coal.  It is the workhorse of China's economic expansion.  In its new World Energy Outlook, the International Energy Agency (IEA) declared, "By any measure, the story of coal in China is remarkable."  IEA found that China could account for 50 percent of coal demand by 2035.[i] 

According to the Department of Energy's Energy Information Administration (EIA), coal "makes up 74 percent of China's total primary energy consumption, and China is both the largest consumer and producer of coal in the world."[ii] China is using more coal than the United States, Europe, and Japan combined.[iii] ...

Indeed, China is the world's second largest oil consumer, behind the U.S., and the world's fourth largest oil producer.[i] The IEA projects that Chinese oil consumption will more than double from 7.7 million barrels per day in 2008 to 16.3 million barrels per day by 2030.  ...

China also sees a threat in the form of increasing oil imports, which now comprise 52 percent of domestic oil consumption.  According to a report by the Chinese Academy of Social Sciences, 64.5 percent of China's oil consumption will likely be met by imports in 2020.  With growing dependence on imports, Chinese National Oil Companies are seeking to control them by investing in oil and gas projects overseas. This activity can be traced to the Fifth Plenum of the 15th Communist Party of China in 2000, when officials recommended a "going-out strategy" for China's 2001-2006 five-year plan.  A "going-out strategy" simply means securing crude oil reserves from abroad.

The China Petroleum & Chemical Corporation is doing just that: it is investing in oil development projects in Cuba, Iran, Iraq, Myanmar, Kazakhstan, Nigeria, Venezuela, and Argentina.  As the Center for American Progress (CAP) has noted, "this heavy investment can funnel money to unstable or dangerous regimes." China, for example, has been the largest foreign investor in Sudanese oil fields.  China is also investing in America's neighbors, as it recently bought a stake in Canadian oil production and attempted to takeover a large American oil company in 2005.[i] 

China has passed a renewable energy law, last amended in 2009, that does set a target for the percentage of total energy consumption from renewable sources in 2020, but it's only 15% - and even that's not a hard target.  The classification of "renewable" now includes nuclear, which is indeed a green energy source but one rejected in the US by environmentalists.  Two-thirds of the 15% will be met with hydropower, another form opposed by enviros for the necessity of blocking rivers to get it.  Wind and solar power will rise, but only to 8% in 2020, while coal will continue to provide two-thirds of all China's energy in that year.

Furthermore, China has a vested interest in seeing the US committed to a "green energy" mandate, as the EPW report makes clear:

First, certain "green technologies" depend on critical raw materials derived from "rare earth" mineral elements.  Rare earth materials include "rare earth ores, oxides, metals, alloys, semi-finished rare earth products, and components containing rare earth materials," and are used in "a variety of commercial and military applications, such as cell phones, computer hard drives, and Department of Defense (DOD) precision-guided munitions."[i] For the most part, because of their unique physical and chemical properties, these minerals currently have no substitutes.

China produces about 97 percent percent of the world's supply of rare earth minerals, while the U.S. produces none.

And what happens in a monopoly?

China's dominance in developing rare earth minerals provides enormous trade leverage over American and European manufacturers-and China is already flexing its trade muscles.  According to news reports, German companies have complained of being "pressed by Chinese officials" to increase their investments in China "if they want to be assured of access to rare earth minerals..."[i] 

In another exclusive, Senator James Inhofe (R-OK) spoke to me for about twenty minutes last night about the report - as well as a few other issues.  We spoke briefly about START, which Sen. Inhofe opposes.  He argues that we're not prioritizing our foreign policy to address the real threats, we're far behind on modernization, and Inhofe doesn't trust the Russians to comply in any case.  Inhofe supports the tax-rate compromise and thinks that more than enough Democrats will vote to support it for it to pass.   He also told me about a controversy in Tulsa, where he had ridden his horse in the Christmas parade every year - until now, when the organizers changed it to the "holiday" parade.  He told the organizers, "If Jesus isn't going to be there, I'm not going to be there, either."

Update: Speaking of Friedman, Pejman Yousefzadeh fisks his latest column, in which Friedman resorts to the hoary device of writing in a foreigner's voice (from China, natch) to belittle Americans. It turns out that Friedman doesn't get facts any more accurately in someone else's voice than he does in his own.

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