China beating us with oil?

As Adm. Thomas H. Moorer explained in

“Becoming Beijing’s
subjects,” America lost the Vietnam War through logistics and public relations, while actually winning militarily at the front in that war’s latter stages. The flip side of divorcing the direct consideration of war at the front from logistics and public relations is that we have, ever since, failed to take notice of and deal with the fact that the Chinese communists have resumed their logistical and public relations efforts to overcome us. Under the present administration, they have intensified their efforts.

Logistically, nothing is more important to us, and to our capability to fight if we have to, than our oil supply. We cannot fight without an assured supply of fuel not only for our armed forces but also for our industry and commerce. The recent developments whereby communist China has captured the oil supplies of Venezuela — which we were looking to for the supply and extension of our economic growth and industrial leadership as well as our military superiority — and China’s increasingly strong co-operation with the OPEC monopoly, headed at present by the Venezuelan member, indicate that communist China has not really stopped fighting the Cold War; they have just lubricated it and are moving it right along with increasing efficiency – and the assistance of our present White House and its occupants.

Whatever they may signal to President Clinton and his wonks of high policy, the present high prices of gasoline with no end in sight, when coupled with the pronouncements of OPEC members which are increasingly echoed by spokesmen for communist China, make it clear to the rest of us that we are not setting the agenda, and that it is the American citizen and motorist that is getting left out of the power equation. The failure of either Saudi pronouncements of increased production or the raid upon our Strategic Petroleum Reserve to alleviate the situation are what strikes the average American.

And we are not assured by talk about windmills. We can’t put windmills in our cars and windmills cannot drive our industry.

The last strands in the Oil Noose which communist China is skillfully weaving around us are falling into place with their cementing of an alliance with the present regime in Venezuela and their skillful alignment of their interests with those of other OPEC members, particularly Iraq and the Arab members who are anti-American. Their maneuvers have essentially displaced the ability of Saudi Arabia to dominate OPEC so as to assist the U.S.

If we assume conventional production by drilling and pumping, the supply-demand curve for oil no longer functions the way it did in economics class. There are no more huge undiscovered oil formations to be found no matter how high the price may go. In the last 20 years Amoco drilled 600 wildcat wells worldwide and came up dry. It almost went broke, became vulnerable, and was bought out by BP. Shell Oil Company, regarded as the technology leader of the industry, pioneered the 3D seismic technology and much of the other new oilfield technology. But all its technology has not helped it significantly in finding oil over the past 20 years. After drilling over 6,000 wells it did not get enough return to justify continuing and has given up wildcat wells.

No matter how high the price, the oil industry as we have known it is not going to go find more fields and drill and pump them to produce a large production outside of OPEC that will bring down the world price dramatically as it did after the first OPEC embargo. The oil companies, both the increasingly fewer and larger majors of the West, and the oil companies of China modeled upon them, as well as other government owned oil companies, are only going to battle for increasingly concentrated control of the oil accessible by traditional pumping and drilling which they all know is there.

Even as oil prices were at a 10 year low in 1998, before they began their present climb, those closely studying the situation and familiar with all the facts of conventional production and its remarkable rise to dominance of our world over the past 80 to 100 years, could see that the “curve” of oil production as we have known it was approaching the point where it would begin an inexorable decline. That point is somewhere between this year and the year 2020. We must act now to establish energy independence.

After a failed putsch, Col. Chavez ran for and won the Venezuelan presidency. Within a week of being elected he was in Beijing, conferring with the Chinese communist Minister of Defense and cementing his alliance with communist China. In short order, as with another failed putschist, he had his party members building their strength in a dominant number of his country’s provinces. He has pushed through a new constitution which enormously centralizes and concentrates power in his hands. He is virulently and openly anti-American. He, in fact, lumps the U.S. together with Europe and Jewry as the evil Amero-Euro-Judeo White North. By contrast he seeks to identify the interests of Latin America’s Indio people with the age-old racism of the Han Chinese, conceiving a superiority over us and echoing the stated purpose of the Chinese to catch up with us technologically, defeat us and dominate us on the world stage, starting with OPEC and oil.

In October 1999, China and Venezuela signed six agreements bolstering their bilateral ties. China, which, while it is perfectly willing to use the environmental weapon on the international stage against us, is indifferent to the environment in pushing its own, Stalin-style industrial development, has begun purchasing Venezuela’s tar-based Orimulsion, the burning of which as a coal substitute yields high sulfur omissions which prevent its use under U.S. law. Given the weakened economic condition of Venezuela, which Chavez has aggravated, this is a powerful tool for the communists, one which we have seen them wield over the years. Communist China has already invested hundreds of millions in drilling and exploration rights in Venezuela in two fields there and has hundreds of thousands in its labor battalions in country.

Col. Chavez boasted at a state dinner which was held for him in Beijing of his closeness with China and then told an AP reporter, “I have always been very Maoist.” In short, Venezuela has already been captured by communist China and allied with them against us, including massing forces on the Colombian border, ready to open up another front against us and the beleaguered government of that country once we enter into it. Given the control of the Panamanian Isthmus which we have ceded to the communist Chinese, we have traded our largest close-by supplier of oil (excluding Canada) for increasing reliance on the Caspian area of central Asia where we are in the pocket of the Chinese communists and watching their growing realignment with Russia.

There has been a lot of advocacy of “free trade” with communist China and wishful thinking and happy talk about how such “free trade” is going to normalize the situation and lead to China’s advancement into the modern world, where its people will see some end to their enslavement, torture and genocide (Inner Mongolia, Tibet, the Uighur people). There have been rosy scenarios about how entrepreneurial activity would arise. The reality seems different. While we have been extending free trade, the communist Chinese dictators have been playing monopoly, effectively gaining control of our oil. They are almost in position to defeat us despite their lack of technological superiority. They have done so by joining forces with an illegal international cartel in which the members who were friendly to us — and for whom we went to war — appear to have lost control and an element arrayed against us and increasingly hostile to us is in control of our oil supply, without which we are a helpless giant.

We’re not altering their behavior but they are affecting and beginning to control ours. The price of gasoline is inexorably rising. We don’t need polling data or focus groups to know that, day after day, the greatest worry for the average American is the high cost of gas and diesel. Every one faces it every day in one form or another, yet we hear little but silence.

The leading presidential contenders have offered plans about energy but only one suggestion would bring any immediate relief: that of drilling in some additional Alaskan fields. The invasion of the Strategic Petroleum Reserve was an ineffectual move that has only succeeded in drawing the communist Chinese Oil Noose tighter.

We need more discussion of what we actually could do – now. We need the kind of leadership it is going to take to solve the problem and remove the Oil Noose from our necks. We need to be assured that it is our kind of free society and our kind of economic and industrial leadership that will continue to inspire the world instead of the coercive power and brutal, totalitarian vision of the Chinese communists, where the communists are aligned with elements hostile to us and in control of the OPEC monopoly.

Communist China is tightening this noose around us with a large amount of our own oil as part of the rope. Talk about doing what Lenin said! It has not been noted in the mainstream press, but we are giving the communist regime of China 20 percent of our present Alaskan production to supply their largest and most modern refining complex in Shanghai. This once would have been illegal, but President Clinton and his fixers fixed that in 1996 so we could help out the communists as the Chinese reorganized their oil sector from a Stalinist model, where they had one company for production and another for refining, to modern, integrated oil giants based on what they had observed among the western major oil companies which they invited into China. One of the lessons they learned, it would seem, is that of using the other guy’s oil instead of your own. They’re using ours even as they take away our ability to get oil from others.

The rationale for changing the law in 1996 to allow the communist Chinese to buy Alaskan oil was that the independents of California were suffering from the large influx of Alaskan crude with prices low at the time. Whatever validity that argument may have had then, now that the Chinese have revealed their strategic intent to defeat us with the oil weapon and the prices rising inexorably with no end in sight

unless we move to new production methods, to continue to allow communist China to have this oil is a betrayal of national security.

Further, we need to beef up our West Coast processing and handling in any case, because the early testing on California tar sands indicates they would give a yield as high as the tar sands in Northern Alberta in similar material and would be a logical site of the implementation of environmentally sound oil mining in the U.S. itself, with an attendant revival of the independent oil sector in a new and technologically more advanced and efficient direction. California and the rest of our oil producing states need a new “high tech” oil industry, one that is environmentally sound. It is time to start.

By immediately cutting off this supply to communist China and bringing Alaskan oil into the market, we will send a clear signal that will lower prices, and, if matched with increased production from tar sands quickly moving toward new and better technology for that type of production, we will see a reversal of the alignment against us within OPEC as its members scramble to seek to head off the new type of production by lowering prices.

If our dislike of, and concern for, illegal monopoly is such that we must apply it to Bill Gates and break up Microsoft, why wouldn’t we apply it to the communist Chinese and the members of OPEC who openly express a desire to harm us through their monopolization and do so immediately? The question is purely one of leadership and a willingness to serve our strategic interests rather than those of a totalitarian nation which openly proclaims a goal of defeating us.

By making it clear now that we will act immediately to achieve and maintain oil and Energy Independence, we will send a clear signal to Beijing that they will not prevail against us despite our technological military superiority by their use of the oil weapon. We will also be sending a clear signal to those within OPEC who are inclined to work with the military planners of communist China to seek to defeat and dominate us that it is not going to work and thus encouraging those within OPEC to moderate their course and start lowering prices — for we will be lowering them here for ourselves in any case as the best and surest way to clear away the threat of war.

Larry Elgin, JD, is the Chairman of

U.S. Defense American Victory in Washington, D.C.

Dr. Steve Rinehart, Ph.D., has an extensive background both in the oil business and in weapons systems. He is in charge of USDAV’s Truth About Oil Project.