China’s government has said it is willing to work with the US on future oil, gas and renewable energy projects, as well as on global energy security issues.“In the field of energy, China and the US are not competitors,” Qin Gang, foreign ministry spokesperson, said during a press briefing. “China stands ready to co-operate with the US and other countries … on the basis of equality and mutual benefit.”
Mr Qin was responding to comments earlier this week by Dick Lugar, the influential US Senator, who said it was crucial for Washington to broaden its energy co-operation with China and India. US energy dependence was “the albatross” of its national security, he said.
China’s pursuit of resources around the world, including in countries shunned by the west – such as Iran, Sudan and Burma – has caused friction with the US and anger in Congress.
“There is great potential for the two countries and an extensive range of areas for co-operation,” said Mr Qin. “We must have a very active approach.”
Mr Qin did not give further details. Mr Lugar, who chairs the Senate foreign relations committee, had suggested the US needed to expand international co-operation to prepare for major disruptions in oil supply. Beijing has been mapping out plans to store oil in strategic reserves at four main locations around the country.
| I rather suspect they've gone beyond the mapping out stage. |
Sergei Razov, RussiaÂ’s ambassador to Beijing, said the two countries were continuing discussions on a possible oil pipeline from Siberia to supply China. He said Russia planned to transport 15m tons of crude oil to China by rail this year.
Mr Razov said other talks had focused on Russia exporting natural gas to its neighbour and the two jointly developing nuclear power. Energy issues are expected to top the agenda when Russian President Vladimir PutinÂ’s visits Beijing next week.
| and from another article in the FT |
In a speech in Washington, Dick Lugar, the influential Republican senator, warned: “No one who is honestly assessing the decline of American leverage around the world due to energy dependence can fail to see that energy is the albatross of US national security.”
His remarks highlight the extent to which energy security has moved rapidly up the US political agenda, driven by an unusual coalition of interests. These include national security specialists concerned about US reliance on foreign oil in troubled parts of the world, environmentalists and unions keen to create jobs in the US by developing alternative energy sources.
Political interest in the issue was underlined by President George W. Bush’s unexpected comments in his State of the Union speech in January, when the former oil executive warned that the US “was addicted to oil”.
Mr Lugar on Monday called that phrase a “seminal moment in American history, when a US president said something contrary to expectations,” and compared it with “President Nixon using his anti-communist credentials to open up China”.
As debate about IranÂ’s nuclear ambitions shifts to the United Nations Security Council, Mr Lugar highlighted the dangers of transferring billions of dollars to unaccountable regimes and warned that economic sanctions against Iran might not work.
“Iran has been anticipating a crisis by accumulating funds [from high oil prices], so if they shut off oil supplies it could have savings to draw down for a long period of time. That is not well recognised and allows Iran and other states a degree of invulnerability to economic sanctions,” he said.
Mr Lugar noted that 77 per cent of the worldÂ’s oil supply was controlled by foreign governments, and that the US paid 17 per cent more for its energy in 2005 than the year before. Energy costs now account for a third of the US trade deficit. He predicted that the US would spend $320bn on oil imports this year.
To reduce US vulnerability he said he would introduce an Energy Diplomacy and Security Act this week to expand international co-operation to “enhance preparedness for major disruptions in oil supplies”.