China's Catastrophic Oil & Gas Problem

This video is made possible by the Curiosity Stream and the Nebula. Watch another new full length video accompanying this one from my series on ongoing modern conflicts explaining the entire course of the ongoing conflict within China's Xinjiang province and the genocide of the Uyghur people living there along with 14 other full episodes with more 5 hours of combined content covering other major conflicts of the 21st century, which you can access by signing up for the Nebula Curiosity Bundle for less than $15 a year at Curiousstream.com. Real life story This is the South China Sea, the most important and dangerous body of water in the world during the 21st century and the most likely place where World War III could break out because there are seven different powers around the perimeter of this sea.

china

taiwan vietnam philippines malaysia indonesia and brunei and they all disagree bitterly over their competing maritime claims here vietnam claims this the philippines claims both malaysia claims this while brunei claims this the maritime claims of these four nations in the south

china

sea The other three are in at least one other place, so they all have disagreements with each other to some extent, but the four are significantly more united against the much more dramatic and radical maritime claims of the fifth power to enter the equation here.

The People's Republic of China, which claims almost all of the entire sea for itself at the tremendous expense of the claims of everyone else around it on what they call the nine-dash line, through this Chinese claim asserts that around the 90% of the entire South China Sea is China's exclusive territorial waters, putting it not only in direct conflict with the overlapping claims of Vietnam, the Philippines, Malaysia and Brunei, but also with the United States. Beijing's claim to most of the sea as territorial waters means that it also believes it has the authority to approve or deny any foreign navy from operating within it whenever it wishes, thereby leaving the American owner of the world's most powerful navy in total disagreement.

Washington views the boundaries here as roughly aligning with the 1982 United Nations Convention on the Law of the Sea, the benchmark of international law generally accepted by most other countries in the world that would normally set maritime boundaries in the South China Sea to look more like this, with 12 miles of territorial water extending from everyone's coasts and 200 nautical miles extending into exclusive economic zones. Beyond that, across the open ocean that any navy can navigate without any permission at any time, these different maps over the same area, one created by Beijing, others created by Vietnam, the Philippines, Malaysia and Brunei, and another Washington believes, they are all directly at odds with each other. each other and are pushing both superpowers into an increasingly dangerous conflict to further enforce their claims, the Chinese have rapidly begun building entirely new islands within the sea covered by naval and air bases packed with the latest firepower, While the United States has continued its own naval and air patrols despite all Chinese warnings and although on the surface it may appear that China's territorial claims here in this sea are overly ambitious, ridiculous or even reckless, its claims in They are actually rooted in Beijing's own fear of the greatest geopolitical weakness that plagues all strategic thinking of the modern Chinese state, a weakness that is so enormous that it could potentially end up destroying the entire country if ever properly exploited and yet , so small that it only stretches a mile and a half wide, it is essentially the Chinese equivalent of the Death Star's exhaust port and is located right here, the Strait of Malacca, the strategic gateway between the Pacific and Indian Oceans. , between the Malay Peninsula in the north and the Indonesian island of Sumatra in the south, this natural choke point is geographically the shortest possible path for container and cargo ships traveling by sea as they travel between Europe, the Middle East and Africa, on the one hand, and East Asia, on the other.

As a result, around three and a half trillion dollars in global trade passes through these doors. and through the shipping routes of the South China Sea each year, including an overwhelming two-thirds of the total volume of China's maritime trade, 40 of all maritime trade of nearby Japan and almost one-third of the total volume of the entire global trade, but perhaps most critical to understand is that these trade flows typically also include about 15 million barrels of oil per day and about a third of all liquefied natural gas, or LNG, traded in the world. China and Japan, the world's second and third largest economies, respectively, depend on this single strait for a whopping eighty percent of all their oil imports coming primarily from Iran and the Arab states around the Persian Gulf, imports that are especially critical for China, since oil imported from abroad accounts for 75% of China's total oil consumption, which ultimately means that approximately 60% of China's total oil supply passes through these miles alone, but China It relies heavily on this choke point not only for the energy resources it imports through it, but also for the enormous volumes of manufactured goods it also exports through it to Europe, exports that largely underpin the very foundations of Europe. the modern Chinese economy.

These realities lead to a fairly obvious

problem

if the Strait of Malacca, only a mile and a half wide at its narrowest point, somehow becomes clogged or blocked for a significant period of time, essentially China's entire economy and society They would collapse if given enough time. This is because there are simply no good enough geographic alternatives for China's energy imports and manufacturing exports to travel via any other potential sea trade routes reaching and from China's east coast would have to be diverted around Sumatra and pass through any of the other easily blockable choke points through the thousands of islands of the Indonesian archipelago or pass through the long open ocean route. on the southern side of australia, this is why back in 2003, a few months after the united states invaded the very oil-rich nation of iraq, the chinese president of the time, hu jintao, warned about what he called China's Melaka dilemma over the risk of what he called certain hostile foreign powers like the United States, India, Australia or others could blockade Malacca and easily cut China's vital energy lines and strangle Beijing and thus China's dominance over the South China Sea, pushing China's influence directly into the Malacca Strait, became of imperative importance to Beijing. own national security, but interestingly, it didn't always use to be that way because China's current crippling dependence on importing energy from abroad and being so dependent on the Malacca Strait is a fairly recent development; historically, after all, China is in fact one of the world's largest oil producers domestically they are the sixth largest oil producer in the world today and roughly equivalent to Iraq with many very large reserves scattered in the northwest northeast and immediately offshore in the 1970s and 1980s.

China used these large reserves to not only become completely self-sufficient in oil, but even become an oil exporting nation primarily to the Japanese, who have basically zero national oil reserves and, As a result, they have always been a large importer of oil throughout their modern history, but at this time the Chinese economy was absurdly small compared to what it is today and accounted for only 1.6 of the entire world economy in 1987. But starting in the mid-1980s, the Chinese economy began to experience the era of incredibly explosive and rapid growth and with that growth. along came an economy increasingly hungry for more and more energy to continue sustaining and growing it and in 1993 China crossed a historic turning point that it would never cross again to this day its national oil production, although large, was not large enough. large to keep up with the growing demand of their economy and they had to start importing oil from abroad for the first time in modern history, as China's economy continued to experience meteoric growth year after year and energy hunger continued. increasing along with it.

China suddenly became the world's largest. largest energy consumer in 2009, second largest oil importer behind the United States in 2011 and then even overtook the US to become the new number one oil importer in 2016 and then overtook Japan to become the world's largest importer of LNG last year. year in 2021 Today, despite having the sixth largest amount of oil reserves in the world, domestic oil production only meets the demand of 20 of the 1.4 billion inhabitants of the Chinese economy and that means that China imports around of all its oil, the vast majority of its natural gas and consumes about 25% of all the energy used by humanity, but unlike the countries that make up western China, the combined energy use It's quite different because the vast majority of China's energy consumption is still overwhelmingly coal-based, and for very logical reasons.

From China's own national security perspective because, compared to oil or gas, China actually owns huge amounts of coal, about 13 of all the coal in the world; In fact, coal is therefore generally a reliable and stable source of energy that China can tap directly without the need to rely on geopolitically complicated imports, which is why coal accounts for around 60 percent of all energy. that China currently consumes; oil is second with only 20 percent; natural gas, a distant third at just six percent, while alternatives such as nuclear and renewables make up the combined remainder. Fourteen percent this essentially means that with eighty percent of imported oil making up almost all imported natural gas, China must rely on imports to cover more than a fifth of its total energy consumption and most of that comes from only one place: the Persian Gulf.

The largest concentration of hydrocarbon resources on the planet, such as oil and gas, ever discovered. A quarter of the world's oil and 35 of the world's natural gas reserves exist around its coasts, separated from China's east coast by not one but two major geopolitical choke points: the Strait of Hormuz. that separates the gulf from the indian ocean and the strait of malacca that separates the indian ocean from the pacific ocean eighty percent of the hydrocarbon supplies imported by china come from here and pass through both choke points, which could theoretically be choked by Americans navy during times of war, which is an important factor for Chinese military strategists to consider when contemplating the long-standing ultimate goal of Beijing's foreign policy: the subjugation of Taiwan under Beijing's direct rule.

The long-standing policy coming from Beijing is that Taiwan is not an independent country. country, but simply a rebellious province of China, Taiwan, of course, for all intents and purposes, truly is a de facto independent country in almost every conceivable sense except for name, and that is because Beijing has been Incredibly explicit for years that if Taiwan ever formally made a move toward an absolute declaration of independence separating from China, Beijing would unconditionally use military force and even go to war to prevent this from happening. Beijing knows that if ever the time comes when diplomacy fails and it will mobilize for war and an invasion of Taiwan. across the Taiwan Strait would probably also mean going to war against Taiwan's biggest defender and supporter, the United States.

In that case, the US Navy would almost certainly at least attempt a blockade of the Malacca Strait to starve China's military and society. of their critical fuel supplies, armies run on oil, and in this scenario, with 80 percent of China's oil imports suddenly blocked, the clock would start ticking because Beijing controls one of the largest strategic oil reserves. of the planet, but even that alone has enough. when at full capacity, according toEstimates, their normal consumption rate lasts only about 90 days, if they have not achieved their goals in Taiwan and the Americans continue to maintain the blockade of Malacca after those 90 days are over, then the Chinese will begin to be forced to ration. drastically drain their fuel supplies and massively divert civilian resources toward the war effort.

This ultimately means that on the first day of a blockade of the Malacca situation, Beijing will really be left with only two options to give in to American demands for peace. immediately and withdraw from their invasion in exchange for reopening their supply lines or dramatically expanding the scope of the war and attacking the US Navy directly in an attempt to break the blockade or even almost unthinkably attacking the US Navy first before the invasion of Taiwan. It even begins to deliver a devastating blow before they could enact the blockade. This 21st century situation rhymes eerily with that of the United States in Japan in the previous century, in August 1941, the United States, which at that time supplied about 80% of the oil to the Japanese Empire, imposed an embargo on its supply. , leaving the Japanese with almost the same two options that could be left to China this century and, against all the conventional wisdom of the time in the West, Japan ultimately chose the latter and apparently crazier option by expanding the scope of the war and attacking the US Navy in a pre-emptive strike on Pearl Harbor and the result was a brutal four-year all-out war across the Pacific that ended in two nuclear attacks.

It is chilling today to think how a similar, logical series of events could end up developing again in the pacific and in the 21st century the united states is by no means alone in its opposition to beijing there is also the quadrilateral dialogue on security or the quad, for short, the type of security alliance between the united states, japan , India and Australia which Beijing derides as the Asian version of NATO and then there is also the Aucus, the trilateral security pact between Australia, the United Kingdom and the United States for a mutual defense policy in the Indo-Pacific that is helping australia to acquire crucial nuclear powered submarines, if china were to attack taiwan or the us navy and go to war with the united states, it would most likely also mean a major conflict with the other members of japan's quad and occus India, Australia and the United Kingdom too, who share a mutual interest in containing Beijing and who combined have a significantly more powerful and capable group of navies that could likely overwhelm China in the Indo-Pacific and undermine all of China's objectives, therefore, be well.

Aware of this enormous

problem

, for decades the Chinese have been taking enormous measures to ensure that they can overcome it by any means necessary, the first and most obvious way has been to dramatically expand the energy budget and capabilities of the Chinese navy in order to compete. more directly at sea with the allied quad and occus fleets in the last 20 years, the Chinese military budget has multiplied by more than six according to the latest comparative figures. China's military budget is now around $240 billion a year. more than the Soviet Union spent on its military at the height of the Cold War in the late 1980s, even when adjusted for current inflation, while the United States spends more than triple that, about 850 billion dollars a year or about 70 percent of what they were spending during the Cold War when adjusted for global inflation China and the United States alone account for about half of all global military spending and China is reducing Continuing to fill this gap by the end of this year the Chinese navy is expected to possess four aircraft carriers and they plan to have five by next year compared to the US's 20.

This naval arms race between the reigning Great Power, the United States, and the rising China, contains another disturbingly disturbing historical rhyme: the early 20th century naval arms race for battleships between the reigning Great Power Britain and the emerging Germany. of Germany finally surpassed that of the British in 1910 after decades of continuous rise and recovery and then, four years later, the outbreak of World War I occurred between them, at the same time as the Chinese possessed the geographical advantage. Proximity to the most important scenarios of any potential future conflict. America's most important Indo-Pacific bases are far from Malacca and the South China Sea in Diego Garcia, Guam, Okinawa Pearl Harbor and the US West Coast, while China has been investing aggressively in numerous naval projects. and air bases built from scratch along the tiny coral atolls within the South China Sea itself, giving their ships and planes proximity to both the Malacca and Taiwan Straits.

Going back to the beginning of this video, this is why China seems so aggressive in enforcing its ambitious territorial claims in the South China Sea by building all these island bases to safeguard its access to the Strait of Malacca and to ensure that its own critical maritime import and export routes remain open even during a major international crisis, if that means inflaming relations with vietnam, the philippines, malaysia and brunei, then so be it from beijing's perspective, it is a calculated price they are willing to pay for greater state security, but perhaps the most important way Beijing is attempting to overcome its Malacca dilemma is not through increased naval power, but through increasing methods of bringing its energy into the country from abroad during For thousands of years goods have traveled across the Eurasian continent between China and the West through vast expanses of mountains, deserts and passes along what is known as the Silk Road along which they passed. this ancient trade route by which Chinese inventions like paper and gunpowder made their way to the west and now in the modern 21st century the Chinese are trying to revive this same idea of ​​the ancient silk road of the past for transportation Beijing's energy and export needs at present and call it the Belt and Road Initiative or BR with a total potential investment of around $1.4 trillion, an investment amount that is more than seven times larger , even when adjusted for inflation, that US investment in Europe through the Marshall Plan at the end of the century Beijing can work strategically to overcome its dependence on the Strait of Malacca and the risk it poses to World War II by construction of pipelines that transport energy from other countries to China and railways and highways that transport manufactured exports from China to other countries. by the us navy central asia immediately west of china is an area of ​​critical importance to the chinese today because they have some of the most enormous reserves of natural gas and oil ever discovered around the caspian sea basin the first overland oil pipeline flowing into China was only built here in 2009.

From Kazakhstan's oil-rich Caspian coast running through China's westernmost Shinshong province, it is now capable of supplying 10 million tonnes of oil a year to China and was only the first in the same year a gas pipeline was built that starts in the huge gas fields of Turkmenistan, the sixth largest in the world and almost doubles all of China's gas reserves and leads directly to China through Xinjiang. Today, this gas pipeline makes it possible to transport gas from Turkmenistan. will be sent 7,000 kilometers away overland to power homes and factories in Shanghai, half of all the gas Turkmenistan exports abroad now flows through this single pipeline to China, but these energy projects in Central Asia have become slightly problematic with Russia, the nation. which have long considered central asia within their own sphere of influence, more and more of central asia's abundant energy reserves are flowing through majority-chinese-owned pipelines to china and less is flowing through pipelines owned russia towards moscow's traditional market in europe, but russia is having to come to terms with growing chinese influence in central asia because china is also rapidly becoming the largest new market for russia's massive energy supplies, in addition to russia with, by far the largest reserves of natural gas in the world and the second largest producer of natural gas.

Oil in the world is one of the world's energy superpowers and is located right next to China, the world's largest consumer of basically all forms of energy. A relationship between Moscow selling energy and Beijing buying it was almost always going to be inevitable based simply on both. geography and geology of nations and sure enough, it really began to get underway just three years ago in 2019, the russians completed their first natural gas pipeline to china, the power of siberia, which connects their large chaiyanda field directly to manchuria and They are building many more as We spoke, a Power of Siberia 2 pipeline has already been proposed that would pass through Xinjiang and connect China to the same huge gas fields in the euro region that currently supply natural gas to Europe and would single-handedly double the Russian gas exports to China.

Work is also currently underway on a third gas pipeline that would connect China to other large Russian gas fields in Sakhalin. In total, Russia hopes to be able to provide China with more than 100 billion cubic meters of gas per year through these pipelines, which currently accounts for about half of China's pipeline. entire gas imports, but it is not just gas pipelines that the Russians are building to sell gas to China, or both sides of this relationship are also investing heavily in liquefied natural gas or in the far north of the Eurasian continent, on the peninsula of Yama, which is the first in Russia. and the largest LNG plant and when fully operational will supposedly be capable of producing 16 and a half million tons of LNG per year.

It is considered the crown jewel of the Northern shipping route. The other maritime component of China's ambition to get rid of its Malacca. dilemma this is a trade route that extends from the pacific ocean through arctic waters within russia's exclusive economic zone and then into the north sea and north atlantic currently parts of this trade route are only ice free during a couple of months out of the year and shipping traffic through it is usually quite small, but in the future, with climate change and warming Arctic temperatures, studies have suggested that this entire passage may be completely ice-free already in the next decade in the 2030s and large-scale shipping through it. may become economically viable by 2040.

This new geographic reality will forever alter the world of commerce and specifically help solve China's Melaka dilemma. When the northern sea route becomes navigable all year round, it will mean huge volumes of ships carrying LNG from Russia's Yama Peninsula across it to China's east coast and it means even more enormous volumes of cargo ships carrying exports. manufactured goods from China to Europe and North America, a route that in both cases will bypass Malacca entirely and dramatically expand the flexibility of China's foreign policy options and will likely allow them to become significantly more aggressive towards Taiwan, this relationship based on energy is the reason why China and Russia appear to be so friendly with each other and why each of them announced in February, just weeks before the Russian invasion of Ukraine, that their friendship knew no limits, with the West cutting off its oil. and gas purchases from Russia after the invasion, the Russians are looking for more eager new customers to sell their energy to and the Chinese desperate to continue reducing their over-reliance on Malacca for their own energy imports and their high rates of LNG imports of quadruple allies like Australia. and the united states are too eager to have a client and it turns out that both beijing and moscow are at the moment firmly united in their opposition to the united states in the west and therefore beijing will never condemn the russian invasion of ukraine and if anything tacitly supports, they need the Russians just like the Russians need the Chinese, but that doesn't mean Beijing has stopped pursuing even more energy imports.

Another set of pipelines completed in 2013 and 2014 starting at the deepwater port of kiyokpu in myanmar and transporting large volumes of oil and gas through that country to the chinese city of kunming and then across india,there is pakistan, one of beijing's biggest allies and supporters, which again revolves around energy and geopolitics, pakistan is by far the largest recipient of chinese belt and road investments to date, amounting to a total of 62 billion dollars and which includes the establishment of the strategic port of Gwadar, located near the Strait of Hormuz and the Persian Gulf, a port that could hypothetically become a very important stop for the Chinese navy, the Chinese have proposed construction of another pipeline from here that would transport oil directly to Kashgar in China's own Xinjiang province, but this has so far proven to be too logistically difficult due to the geography this pipeline would have to have.

The pass includes the imposing Himalayas with very steep valleys, powerful waterfalls and glaciers and, in addition, occasional earthquakes and sub-zero temperatures, so although the construction of an oil pipeline here has never been carried out until now, they have instead made a tremendous effort to build one of the highest paved. roads of the world the karakoram highway in this way, at least trucks carrying fuel and exports can travel between mainland china and the chinese invested port at wadar and continued to divert some quantities of supplies around malacca from beijing perspective in 2019 pakistan went to the international monetary fund for its 12th national bailout since the late 1980s, which critics say gives huge economic leverage to the chinese who invested heavily in the port of gwadar, when a nation like pakistan can no longer pay its debts, It means that the Chinese entities that lent them the money could hypothetically take control of assets.

Something like this has already happened in another country close to India, Sri Lanka and specifically the port of Hamantota for which Beijing provided more than a billion dollars in loans for build in exchange for the cancellation of that debt the Sri Lankan government granted a Chinese state-owned company a 99-year lease under intense pressure from India. The Sri Lankan government made the Chinese promise not to use Hambantota for military purposes, but 99 years is a very long time for something as simple as a promise: if similar fates befell Kyoku and Gwadar, the Chinese would have four ocean ports. indica if its official military base is taken into account at the western end of it in djibouti, all located near the most strategic maritime choke points in the world in mandeb, among the red zones. sea ​​and the indian ocean hormuz between the persian gulf and the indian ocean and the polk strait between india and sri lanka this has led many geopolitical thinkers within india to fear that china is beginning to effectively encircle them and from the perspective of Beijing that contains India as a member of the Quad along with the United States, Japan and Australia has a very high strategic value in the event of a major naval war throughout the Indo-Pacific, China's relationship with Pakistan could hypothetically force India to fight a war on two fronts and the ports aroundIdeally, India would keep its navy well contained and away from the fight for the much more important bodies of water around Taiwan, the South China Sea and Malacca, but the key space on the Eurasia board for China's overall grand strategy in the 21st century to end its The Malacca dilemma is almost certainly its own Xinjiang province in the northwest.

This single province accounts for around 20 percent of all of China's domestic energy reserves, with huge sources of oil, gas and coal spread throughout, placing Xinjiang first among all of China's provinces. of fossils. fuel reserves, the Terran Basin alone within the province is the largest oil and gas bearing zone in all of China, but by expanding beyond these internal reserves, China also has a very, very specific security interest in the Neighboring Central Asia, rich in oil and gas, immediately to the west of Xinjiang Strait of Hormuz east of china china needs to control xinjiang at all costs to ensure that these vital routes open that help them maneuver around Malacca, their greatest geostrategic vulnerability, but of course not from the Han Chinese, who make up the vast majority of China's general population to secure Xinjiang within Beijing's orbit. and geopolitical strategy forever, the Chinese regime has begun to carry out a genocide of incredible proportions against the indigenous Uyghurs living here, something that has truly not been seen anywhere in our world since the holocaust of the 1940s, This holocaust of millions of Uighurs living within spread throughout the region.

The Uyghurs inside darkest of China's geopolitical energy. crisis, the disturbing, violent and controversial details of discussing what is an ongoing genocide would cause the video to be demonetized and age restricted, which I completely understand and honestly don't care, but ultimately means that the youtube algorithm I would never promote the video for you and there's just no way you're likely to see it here, which is why I created another full video to go along with this one in my ongoing modern conflict series that's about the same length as this video that covers everything. course and explanation of genocide of the Uyghur people in China within that contain more.

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