Get ready for an energy export battle with China

Get ready for an energy export battle with China
Get ready for an energy export battle with China
When navigating through Asia’s energy landscape, two (related) problems replace all other problems: Asia’s vocal appetite for energy and the looming existential threat from climate change. By taking a bold approach to global energy, the United States can simultaneously meet the region’s long-term energy needs, combat a changing climate in the hardest hit areas, and challenge China’s geopolitical supremacy in its own backyard.

In its annual International Outlook Report last year, the US Energy Information Administration (EIA) forecast that liquid fuel consumption in Asia will increase by 22 percent between 2018 and 2050, while production in the United States, the organization that exports petroleum, will remain high Countries and Russia. Natural gas consumption in the region, where local production remains unchanged, will increase by more than a fifth. According to the report, the United States will be the largest producer of natural gas by mid-century, exporting more than 25 trillion cubic feet annually.

Increasing energy exports to US allies like Japan and South Korea further strengthen Washington’s bilateral relations with Tokyo and Seoul, while signaling renewed trust and support for these nations, which is valuable in the context of an emerging (and more confident) China. In this environment, after an increasingly nationalist Beijing, these governments may feel inclined to favor American exports over barrels from the Middle East. Growing exports to India, which imports more than 80 percent of its oil, are not only extraordinarily lucrative for US energy companies (the EIA estimates India will use more energy than the United States by 2040) but also serve as a means to wooing the US The world’s largest democracy amid mounting hostilities with China that have grown hot in recent months.

The method Beijing has used to establish geopolitical supremacy in Eurasia and even in Africa is through the Mammoth Belt and Roads Initiative (BRI), a global development and investment project that began in 2013 as the brainchild of Chinese President Xi Jinping. His vision envisions trillions of dollars in energy and transportation infrastructure projects across Southeast Asia and East Africa. Predictably, the bureaucracy of the program is opaque and in many cases requires the use of Chinese funds, companies and personnel.

The greatest facet of BRI is energy, and the projects associated with it are wide-ranging, unprecedented and dirty. While Xi has positioned itself as the world’s leading provider of renewable energies in the People’s Republic, his government exports energy models that focus on high-emission fuels, especially coal– –by far the worst CO2 Emitter of all major types of fuel. In addition, the sea and ground transport projects– –Some of these have been questioned because of their relative usefulness– –are built with heavy materials like concrete and steel in countries with murky environmental records.

The numbers are staggering: Chinese companies are involved in more than two hundred coal projects in dozens of BRI signatory nations, including strategically critical states such as Pakistan, Bangladesh and Kenya. In addition, Beijing finances around half of all new coal capacities in Egypt, Tanzania and Zambia. Given that the United Nations Intergovernmental Panel on Climate Change (IPCC) recommends that 60 percent of coal-fired power plants worldwide must shut down by 2030 in order to meet the goals set in the Paris Agreement, China’s bet on coal is nearly 45 billion US dollars mind-boggling and hypocritical.

Proponents of the initiative will say that while “green” energy is certainly preferable, coal is a cheaper solution for poorer nations desperately trying to lift their people out of poverty. However, if the Paris signatories are serious about limiting global warming to 1.5 degrees Celsius, following the IPCC recommendation would mean BRI countries would have to shut down the coal-fired power plants they paid for before the plants make a significant profit . In debt to China and with no funds to meet its energy needs, these governments would be worse off in every way. Refuse to close the plants (which have an average lifespan of nearly forty years) and there is little hope that the world will achieve the goals set in the Paris Agreement.

With that knowledge, it is clear that BRI is nothing more than a means to prop up the bottom line of struggling, inefficient Chinese energy conglomerates that cannot compete domestically with competitive renewable energies, especially as Beijing has prioritized cleaner energy to calm concerns to pollution, especially in urban areas. The project is merely a way for coal companies to relive the past by exporting China’s own economic rise, which was (and is) fueled primarily by coal.

However, BRI is more than just populating the bottom line. It is an unqualified attempt by China to set geopolitical and even military bases across Asia and Africa. First, the Belt and Road Initiative is an obvious rejection of the Western model of international development, which traditionally ties the aid of a recipient nation to certain democratic standards: integrative institution building, equal application of the rule of law, and official observation of the basic principles of human rights. These provisions can be found in the European Union, among others Community acquis and was the cornerstone of aid programs like the Marshall Plan.

Xi’s project, on the other hand, goes in the opposite direction and prefers empty notions of “national sovereignty” over democratic norms. Much like last year’s UN Human Rights Council meetings, China’s BRI is undermining civil liberties by supporting authoritarianists, empowering them to suppress domestic disagreements, and encouraging them to adopt Chinese models of government characterized by opaque, draconian judicial restrictions Freedom of expression (particularly related to cybersecurity) and even state-run ethnic cleansing. It is not surprising that almost all of the seventy-plus countries that have joined the initiative are notoriously corrupt and are moving ever closer to the Chinese model of government.

Ultimately, the global normalization and spread of China’s despotic, stifling approach to government is the end game of Belt and Road. However, to ensure the long-term political dominance of its neighbors, Beijing is using BRI as a means of military domination in the region. The most obvious example of this was in late 2017, when Sri Lanka defaulted on a Chinese loan to help build a port in Hambantota, just a few hundred miles off the coast of India. China eventually forgave the debt, but only after signing a ninety-nine year lease on the port.

While this episode was particularly egregious, it shows the real intentions of the Belt and Road Initiative: geopolitical control and military primacy. Paradoxically, although China uses international institutions to preach its mantra of national sovereignty and noninterference, BRI has enabled Beijing to force South Asian and African countries to move in lockstep internationally while also using physical spaces from the same nations to work out Chinese usage– –all under the promise of commercialization and cheaper, more reliable energy sources.

In fact, there are more than three dozen China-funded ports on the coasts of Southeast Asia and Africa. Not all of them are swept like the ones in Hambantota, but their existence puts pressure on host countries, China preferring access to ports along strategically central waterways such as the South China Sea, Bay of Bengal, Persian Gulf, Arabian and Red The seas and the Gulf of Aden give China full control of the trade and military activities that take place at these bottlenecks.

The United States must respond to the Belt and Road Initiative in such a way as to highlight the weaknesses of the program, as well as the energy needs of the countries concerned and the global threat posed by climate change. This is the only way Washington can strengthen its geopolitical position in the region at the expense of Beijing.

America should offer financial and logistical support for energy projects on better terms than its Chinese counterparts. Rather than making irresponsibly large loans to inefficient, dirty companies, Washington should provide low-interest loans to finance low-carbon systems like solar parks, hydroelectric plants, wind farms and LNG terminals. Rather than insisting on only lending to American personnel, the loans should provide that the contracting company should hire domestically within the recipient country to ensure maximum employment. To increase political transparency, the United States should make the grant contingent on the recipient nation providing a clear and traceable money trail that can be checked to protect the money from corrupt policy makers. Such an audit should also help ensure adequate protection for workers and the environment.

To best facilitate cooperation on this scale and under these conditions, the United States does not need to develop a program that complies with the Belt and Road initiative. Washington should also stay away from bringing the World Bank or the International Monetary Fund to its knees, both of which have been successfully scapegoated by China. Rather, Washington should double or even triple the lending capacity of the recently formed International Development Finance Corporation (DFC), which has urged experts to compete directly with BRI. Indeed, there is a precedent for this type of investment: the company recently announced a nearly $ 2 billion investment in Ukraine and Mozambique’s energy infrastructure.

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