Not-so-slick Oil Battle: Rising Powers China and India Set to Fuel Intense Energy Fight

Not-so-slick oil battle: Rising powers China and India set to fuel intense

energy fight

By Eric Margolis

Created Mar 11 2007 - 6:35am

MUMBAI, INDIA -- Energy security has become the primary and most immediate

strategic concern of Asia's two rising giants, India and China.

In my book War at the Top of the World (third, updated edition out later

this month), I cited a little-noticed CIA study estimating that when China

and India reached South Korea's 1999 level of economic development, in about

2030, their combined demand for oil would surpass today's total world oil

production.

In fact, China's and India's blazing economic growth, rising more than 9% a

year, means they may reach South Korea's GDP a decade or more earlier than

expected. Alarm bells are ringing in India and China over the ongoing

scramble for new sources of oil.

Last fall, I attended the Chinese-African summit in Beijing, the culmination

of a masterful campaign by China to lock up Africa's energy and mineral

resources. China, which efficiently integrated its energy and military

policies, has been using financial and military aid to lock up oil

concessions in Africa and Asia.

Indian officials in Delhi and the business community here in Bombay/Mumbai

are deeply worried China may soon have secured all available remaining oil

supplies not controlled by the United States. They are clamoring for action

to secure energy supplies for India and assure its continued economic growth

and expanding military power.

India's modest domestic oil production has been waning, forcing it to import

70% of its oil. India's imports account for 3.2% of world oil imports;

China's 7.6%; the U.S. 25%; and Europe 26%.

India, quite clearly, is being left way behind in the stampede to secure

energy supplies. Its oil imports will need to double by 2030 from the

current 2.4 million barrels daily to sustain growth. China's imports should

reach 12 million barrels daily.

Since most of this oil will originate from the Gulf or Indonesia, both Asian

superpowers are rushing to deploy deep-water naval forces to protect their

oil lifelines, just as the U.S. has done since before World War II.

POWERFUL NAVY

China is building a fleet of modern attack submarines, some nuclear-powered,

missile-armed surface combatants, and extending the range of its land-based

naval aviation. The People's Navy has gone from being a weak "brown water"

coastal force to a true "blue-water" navy that could even challenge the U.S.

7th Fleet in a clash over Taiwan.

But China is unable to project naval power into the vast Indian Ocean and

Gulf due to its lack of bases and air cover. Here, India holds a major

advantage.

India's modern aircraft carrier, long-ranged shore-based aviation, and

modern, Russian-supplied attack submarines and frigates armed with deadly

cruise missiles will give India maritime dominance over the entire Indian

Ocean from the coast of East Africa to Australia. Only the U.S. Navy could

challenge India's sway over the Indian Ocean.

China's securing of port rights in Burma, warm relations with East African

states, and expanding influence in energy-rich Central Asia worries India.

At the same time, India's surging naval power has deeply alarmed Pakistan,

whose oil lifeline through the port of Karachi could be quickly severed by

an Indian naval blockade.

Having come late to the Monopoly-like game of grabbing as many key oil

properties as possible, India is now racing to make up for lost time. Being

a democracy prone to debilitating party politics and infighting, India

cannot operate with the ruthless strategic efficiency as Communist China,

but it knows time is running out.

COUNTERING U.S. THREATS

What this means is that some time soon, India's strategic energy and

political interests are going to start actively competing in the Mideast

with those of the region's hegemon, the United States. To no surprise, some

of India's recent naval improvements, notably its powerful anti-ship

missiles, appear aimed at countering any potential future threat of action

by the U.S. Navy.

The five-way contest between the U.S., India, Japan, Europe and China for

Asia and Africa's energy resources promises to be fascinating. Welcome to

the new Great Game.

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"A little patience and we shall see the reign of witches pass over, their

spells dissolve, and the people recovering their true sight, restore their

government to its true principles. It is true that in the meantime we are

suffering deeply in spirit,

and incurring the horrors of a war and long oppressions of enormous public

debt. But if the game runs sometimes against us at home we must have

patience till luck turns, and then we shall have an opportunity of winning

back the principles we have lost, for this is a game where principles are at

stake."

-Thomas Jefferson