Energy will help it consolidate: Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia are all members of the EEU; Tajikistan was still contemplating membership as of 2016.
Russia, in the words: Tatiana Mitrova, in-person conversation with author, Aspen, CO, July 6, 2016.
However, there is little competition: “The New Great Game in Central Asia,” European Council on Foreign Relations, www.ecfr.eu/page/-/ChinaAnalysis_ThenewGreatGameinCentralAsia_September2011.pdf.
Critical—and delicate—energy deals followed: A pipeline delivering Kazakh oil to China delivered its first oil in 2006. That same year, negotiations between the Chinese and Turkmen governments bore fruit with the signing of an agreement related to the development and sale of natural gas. In 2007, China completed transit agreements with neighboring Uzbekistan and Kazakhstan. Just two years later, the Central Asian-China Pipeline was inaugurated and Turkmen gas began to flow 7,000 km across four countries to Chinese markets, or almost one and a half the length of the United States from coast to coast.
Whether he actually wrote the thesis: “Researchers Peg Putin as a Plagiarist Over Thesis,” Washington Times, March 24, 2006, http://www.washingtontimes.com/news/2006/mar/24/20060324-104106-9971r. See “Putin’s Thesis (Raw Text),” Atlantic, August 20, 2008, https://www.theatlantic.com/daily-dish/archive/2008/08/putins-thesis-raw-text/212739/.
Released in May 2009, Russia’s: This quote is sourced from Keir Giles, “Russia’s National Security Strategy to 2020,” (Research Division, NATO Defense College, Rome, Italy, June 2009), 6, http://conflictstudies.co.uk/files/RusNatSecStrategyto2020.pdf.
Ten: China—Greater Degrees of Freedom
In February 1960, in a drive: Lai-Ha Chan et al., China at 60: Global-Local Interactions (Singapore: World Scientific, 2011), 235.
As depicted in a 2009 Chinese film: Xinhua, “China’s ‘Iron Man’ an Undying Legend,” People’s Daily Online, September 17, 2009, http://en.people.cn/90001/90776/90882/6760061.html; Henry M. Paulson, Dealing with China: An Insider Unmasks the New Economic Superpower (New York: Twelve, 2015).
Legend holds that, without any other infrastructure: Xinhua, “China’s ‘Iron Man,’ an Undying Legend.”
Equal quantities of water: Ibid.
Foreshadowing his own early death: Ibid.
Yet despite Daqing’s success: In 2014, Daqing was producing about 850,000 barrels a day, after declining from 1 mnb/d. The China National Petroleum Corporation, Daqing’s operator, reportedly intends to decrease production to 640,000 barrels a day by 2020 due to high costs of production, lower oil prices, and limited reserves. See “China: Overview,” U.S. Energy Information Administration, May 14, 2015, www.eia.gov/beta/international/analysis.cfm?iso=CHN.
The country’s energy self-sufficiency: For a history of China’s oil dependencies, see Hong-Pyo Lee, “China’s Petroleum Trade,” The Journal of East Asian Affairs 4, no. 1 (1990).
Whereas it had taken more: BP p.l.c., BP Statistical Review of World Energy 2016 (London: BP, June 2016), www.bp.com/content/dam/bp/excel/energy-economics/statistical-review-2016/bp-statistical-review-of-world-energy-2016-workbook.xlsx.
As of 2014, it accounted: Nick Butler, “China: The World’s Energy Superpower,” Financial Times, September 21, 2014, http://blogs.ft.com/nick-butler/2014/09/21/china-the-worlds-energy-superpower/.
The Chinese government would have preferred: For a longer exposition on Deng’s approach, see Aaron L. Friedberg, A Contest for Supremacy: China, America, and the Struggle for Mastery in Asia (New York: W.W. Norton & Company, 2012), chapter 6.
In 2009, two Chinese officials: The central planning department of the Chinese government predicted that China would need to import 60 percent of its oil by 2020. Xiaoli Liu and Xinmin Jiang, “China’s Energy Security Situation and Countermeasures,” International Journal of Energy Sector Management 3, no. 1 (2009): 83–92.
the following year in 2010: In 2010, the IEA projected that 78 percent of China’s oil needs would be met by imports in 2030. International Energy Agency, World Energy Outlook 2010 (Paris: OECD Publishing, 2010), 105, 128, www.worldenergyoutlook.org/media/weo2010.pdf.
The transformation of China: Michael Forsythe and Jonathan Ansfield, “Fading Economy and Graft Crackdown Rattle China’s Leaders,” New York Times, August 22, 2015, www.nytimes.com/2015/08/23/world/asia/chinas-economy-and-graft-crackdown-rattle-leaders.html.
In 1978, when China began to open: Percentages are derived from “GDP (current US$),” The World Bank, 2016, http://data.worldbank.org/indicator/NY.GDP.MKTP.CD.
In less than forty years, China has grown: Forsythe and Ansfield, “Fading Economy and Graft Crackdown.”
It now constitutes approximately: Percentage derived from “GDP (current US$),” The World Bank.
In the mere three years: Vaclav Smil, Making the Modern World: Materials and Dematerialization (West Sussex: John Wiley & Sons, 2014), 91.
Yet China is now the world’s largest economy: If the size of the economies are not adjusted for Purchasing Power Parity, China’s economy is still smaller than that of United States.
It is also the planet’s biggest manufacturer: Wayne M. Morrison, China’s Economic Rise: History, Trends, Challenges, and Implications for the United States (CRS Report No. RL33534) (Washington, DC: Congressional Research Service, October 21, 2015), 1, https://www.fas.org/sgp/crs/row/RL33534.pdf.
During the first decade of: Rakesh Kochhar, “A Global Middle Class Is More Promising than Reality,” Pew Research Center, July 8, 2015, www.pewglobal.org/2015/07/08/a-global-middle-class-is-more-promise-than-reality/.
Had she visited five years later: In 2005, there were 2.6 million cars in Beijing; by January 2011, this number had risen to 4.8 million vehicles. “Beijing Unveils Measures to Ease Traffic Flow,” Beijing International, www.ebeijing.gov.cn/BeijingInformation/BeijingNewsUpdate/t1146155.htm.
She would have noticed how many: Jim Gorzelany, “The Worst Traffic Jams in History,” Forbes, May 21, 2013, www.forbes.com/sites/jimgorzelany/2013/05/21/the-worst-traffic-jams-in-history/.
In the words of China scholar: Susan L. Shirk, China: Fragile Superpower (New York: Oxford University Press, 2007), 54.
Just twenty years earlier, China: For harrowing accounts of this famine, see Frank Dikötter, Mao’s Great Famine: The History of China’s Most Devastating Catastrophe (London: Bloomsbury, 2011); Tania Branigan, “China’s Great Famine, The True Story,” Guardian, January 1, 2013, www.theguardian.com/world/2013/jan/01/china-great-famine-book-tombstone.
With more disposable income: Jikun Huang and Scott Rozelle, “Agricultural Development and Nutrition: The Policies Behind China’s Success,” World Food Programme, November 2009, http://documents.wfp.org/stellent/groups/public/documents/newsroom/wfp213339.pdf, 27.
In 2002, both the Chinese government: Daniel H. Rosen and Trevor Houser, “What Drives China’s Demand for Energy (and What It Means for the Rest of Us),” The China Balance Sheet in 2007 and Beyond (Washington, D.C.: CSIS and The Peterson Institute), 29, web.archive.org/web/20110220195805/http://csis.org/files/media/csis/pubs/090212_02what_drives_china_demand.pdf.
They also predicted annual energy demand: Ibid.
China’s economy grew rambunctiously: China’s GDP grew between 8.4 percent and 14.2 percent over the years 2000–2010 (inclusive). “GDP Growth (Annual %),” World Bank, 2016, http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locations=CN.
Overall energy consumption grew four times: Rosen and Houser, “What Drives China’s Demand for Energy.”
By the mid-2000s, almost half: According to C. Fred Bergsten, “China now accounts for 48 percent of global cement production, 49 percent of global flat glass production, 35 percent of global steel production, and 28 percent of global aluminum production.” C. Fred Bergsten et al., China’s Rise: Challenges and Opportunities (Chicago: Peterson Institute, 2009), 142–43.
As China grew at an average growth: Chinese growth figures from “GDP Growth (Annual %),” The World Bank.
During this period, China consumed an average: These figures are for total petroleum consumption. “Total Petroleum Consumption 2014,” U.S. Energy Information Administration, 2014, www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=5&aid=2.
One study estimated that, in the absence: ICF International, “U.S. Oil Impacts: The Impacts of Horizontal Multi-stage Hydraulic Fracturing Technologies on Historical Oil Production, International Oil Costs, and Consumer Petroleum Product Costs,” presentation, The American Petroleum Institute, Washington, DC, October 30, 2014, www.api.org/~/media/Files/Policy/Hydraulic_Fracturing/ICF-Hydraulic-Fracturing-Oil-Impacts.pdf; “Europe Brent Spot Price FOB,” U.S. Energy Information Administration, November 9, 2016, www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=a.
If we simplify things to assume: Calculations which should only be considered notional suggest $235 million a day and $86 billion a year. These numbers were produced by multiplying the number of barrels imported a day (5.5 million) from 2011 to 2014 by the difference in the actual price (Brent price average was $107.60 from 2011 to 2014) from the price that above study calculated would have prevailed in the absence of the tight oil boom ($150 per barrel). If, for simplicity’s sake, we attribute the whole price plunge to the production of unconventional resources, we can then estimate that in 2011, 2012, 2013, and 2014, China was saving $86 billion a year on its oil imports thanks to this boom. ICF International, “U.S. Oil Impacts: The Impacts of Horizontal Multi-stage Hydraulic Fracturing Technologies on Historical Oil Production, International Oil Costs, and Consumer Petroleum Product Costs”; “Europe Brent Spot Price FOB,” U.S. Energy Information Administration, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=a; “JODI-Oil: Joint Organizations Data Initiative–Primary (all data),” Joint Organizations Data Initiative, http://www.jodidb.org/.
Moreover, the actual price plunge: There is of course some relationship between China’s weakening growth and lower oil prices, although China is not the biggest driver of the plunge by far. For instance, Andreas Economou, Bassam Fattouh, Paolo Agnolucci, and Vincenzo De Lipsi attribute $11 of the $50 price drop in oil between June 2014 and January 2015 to “the weakening of the global economy” (without specifying China’s weight in that phenomenon). See Andreas Economou et al., “Oil Price Paths in 2017: Is a Sustained Recovery of the Oil Price Looming?” (Energy Insight: 1, Oxford Institute for Energy Studies, University of Oxford, Oxford. U.K., January 2017), 3, https://www.oxfordenergy.org/wpcms/wp-content/uploads/2017/01/Oil-Price-Paths-in-2017-Is-a-Sustained-Recovery-of-the-Oil-Price-Looming-OIES-Energy-Insight.pdf.
The United States, for instance, took decades: U.S. household final consumption expenditure as a percentage of GDP increased 7 percent (from 61 percent to 68 percent) over fifty-three years, from 1960 to 2013. “Household Final Consumption Expenditure, etc. (%ofGDP),” The World Bank, 2016, http://data.worldbank.org/indicator/NE.CON.PETC.ZS?locations=US.
While consumer demand in China: “China: Annual Data and Forecast,” Economist Intelligence Unit, April 1, 2017.
For every one-dollar drop: Calculations here are derived from “JODI-Oil: Joint Organizations Data Initiative–Primary (all data),” Joint Organizations Data Initiative, http://www.jodidb.org/.
Put another way, given that the price: At $111.8 a barrel in June 2014, the import of 6.8 million barrels of oil cost $760 million, whereas the same amount imported at $53 a barrel in December 2016 cost nearly $400 million less. “Europe Brent Spot Price Fob,” U.S. Energy Information Administration, https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rbrte&f=m; “JODI-Oil: Joint Organizations Data Initiative–Primary (all data),” Joint Organizations Data Initiative, http://www.jodidb.org/.
However, despite such benefits: Antoine Halff, “The Outlook for Asia’s Oil Market in a Lower Price Environment,” in Asia’s Energy Security Amid Global Market Change, ed. Muhamad Izham Abd. Shukor et al. (Seattle: National Bureau of Asian Research, 2016), http://nbr.org/publications/specialreport/pdf/Free/02172017/SR63_AsiasEnergySecurity_December2016.pdf?utm_source=Center+on+Global+Energy+Policy+Mailing+List&utm_campaign=1514364ae0-EMAIL_CAMPAIGN_2016_12_17&utm_medium=email&utm_term=0_0773077aac-1514364ae0-102087193.
In February 2015, a video titled: “Under the Dome (English subtitle, Complete) by Chai Jing: Air pollution in China,” YouTube video, 1:43:57, posted by “Jiahua Guo,” March 8, 2015, https://www.youtube.com/watch?v=V5bHb3ljjbc&feature=youtube.
In 2012, in Shifang: See “Quiet Returns to Once-Restive-Shifang,” Wall Street Journal, July 4, 2012, https://blogs.wsj.com/chinarealtime/2012/07/04/quiet-returns-to-once-restive-shifang.
Yang Chaofei, the vice chairman: Jennifer Duggan, “Kunming Pollution Protest Is Tip of Rising Chinese Environmental Activism,” Guardian, May 16, 2013, www.theguardian.com/environment/chinas-choice/2013/may/16/kunming-pollution-protest-chinese-environmental-activism.
A 2013 survey conducted: Wang Hongyi, “Govt Environmental Transparency in Doubt,” China Daily: Europe, May 9, 2013, http://europe.chinadaily.com.cn/china/2013-05/09/content_16486401.htm.
This dirtiest of the fossil fuels: Joseph Ayoub, “China Produces and Consumes Almost as Much Coal as the Rest of the World Combined,” U.S. Energy Information Administration, May 14, 2014, www.eia.gov/todayinenergy/detail.cfm?id=16271. In 2015, according to China’s Bureau of Statistics, this number was 64 percent; in 2016, it was 62 percent. Michael Holz, “China’s Coal Consumption Drops Again, Boosting its Leadership on Climate Change,” Christian Science Monitor, March 3, 2017, www.csmonitor.com/World/Asia-Pacific/2017/0303/China-s-coal-consumption-drops-again-boosting-its-leadership-on-climatechange.
According to the U.S. Energy Information Administration: Ayoub, “China Produces and Consumes Almost as Much Coal.”
the scale of this challenge: BP has Chinese demand for all fuels growing robustly out to 2035. Demand for oil rises 63 percent, that for natural gas increases 193 percent, and that for coal goes up 5 percent. Demand for renewables in the power sector increases dramatically by 593 percent, whereas nuclear power and hydropower go up by 827 and 43 percent respectively. “Country Insights: China,” BP Energy Outlook, www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2016/bp-energy-outlook-2016-country-insights-china.pdf.
Multiple obstacles have existed: BP p.l.c., BP Statistical Review of World Energy 2016 (BP, June 2016), www.bp.com/content/dam/bp/excel/energy-economics/statistical-review-2016/bp-statistical-review-of-worldenergy-2016-workbook.xlsx.
Its goal is for gas to account: “Goals set for nuclear energy development in next five years,” China Daily, January 18, 2017, http://www.chinadaily.com.cn/business/2017-01/18/content_27988526.htm.
This may sound like a small amount: Mark Dwortzan, “Enabling China to Shift from Coal to Natural Gas,” MIT News, November 18, 2016, http://news.mit.edu/2016/enabling-china-to-shiftfrom-coal-to-natural-gas-1118.
But China’s targets would equal: This calculation is made by taking the 2014 projection for how much natural gas China will be using in 2020 and comparing it to Gazprom’s total natural gas exports in 2014. “UPDATE 1-Russia’s Gazprom Sees Gas Production at All-Time Low,” Reuters, December 24, 2014, www.reuters.com/article/2014/12/24/russia-gazprom-output-idUSL6N0U81HA20141224.
To keep the country on track: For instance, the government lowered by a quarter the price local distributors pay to pipeline operators. See Brian Spegele, “China Cuts Natural-Gas Prices to Spur Demand,” Wall Street Journal, November 18, 2015, www.wsj.com/articles/china-cuts-natural-gas-prices-to-spur-demand-1447865810.
Partially in response to such efforts: Demand growth for natural gas had dropped dramatically to approximately 4 percent in 2015, alarming Chinese policymakers. (In the years between 2009 and 2014, natural gas demand had risen on average by 14 percent.) BP, BP Statistical Review of World Energy 2017. This flagging demand growth was one of the impetuses behind the price liberalization. Osamu Tsukimori, “Chinese Gas Demand to Rise; Will Help to Ease Glut: IEA,”
Reuters, November 24, 2016, http://www.reuters.com/article/us-lng-japan-iea-idUSKBN13J0OU.
The global glut in natural gas: “China’s Cheaper Coal Seen Slowing Switch to Cleaner Natural Gas,” Bloomberg, May 19, 2016, https://www.bloomberg.com/news/articles/2016-05-19/china-s-cheaper-coal-seen-slowing-switch-to-cleaner-natural-gas.
However, if MIT researchers Sergey Paltsev: Danwei Zhang and Sergey Paltsev, “The Future of Natural Gas in China: Effects of Pricing Reform and Climate Policy,” Climate Change Economics 7, no. 4 (2016), https://globalchange.mit.edu/sites/default/files/MITJPSPGC_Reprint_16-19.pdf.
China spent $90 billion dollars: IEA, World Energy Outlook 2016, 406.
this amount was more than: Ibid.
According to the IEA, electricity generated: By IEA’s assessment, electricity generation from solar photovoltaics (electricity generated by utilities rather than rooftop panels), onshore wind, geothermal, and hydroelectricity are cheaper than that generated by natural gas turbines in China for projects completed in 2015. Combined cycle gas turbines, however, are cheaper than all other options besides coal and geothermal. Ibid., 451.
Concerned about the possibility: “Police Deployed at South China Gas Stations,” Reuters, August 18, 2005, www.freerepublic.com/focus/f-news/1466304/posts; the shortage seemed poised to move beyond Guangdong to Shanghai, with certain grades of gasoline selling out in China’s largest city. “Fuel Shortage Shuts Half Shenzhen’s Pumps,” South China Morning Post, August 16, 2005, www.scmp.com/article/512395/fuel-shortage-shuts-half-shenzhens-pumps.
As Zheng Bijian, a senior advisor: Zheng Bijian, “China’s ‘Peaceful Rise’ to Great-Power Status,” Foreign Affairs, September/October, 2005, 19, https://www.foreignaffairs.com/articles/asia/2005-09-01/chinas-peaceful-rise-great-power-status.
Shortly after assuming office: Willy Lam, “Beijing’s Energy Obsession,” Wall Street Journal, April 2, 2004, https://www.wsj.com/articles/SB108086187874972230.
Windfall Page 50