Most Americans don't have to go far to know the effects of high world crude oil demand has had on them. They are feeling it in their pocketbooks when they go to fill up their cars and trucks at gas station, and when they turn on the oil burner in the winter. The Chinese people who are far less dependent on oil are also feeling the pain with supply shortages being the norm. China's thirst for crude oil in the future seems almost boundless with an economy rapidly plunging towards modernity. As the August 22nd Economist article titled “The Oiloholics” notes, “oil prices could yet go higher—unless the world's biggest gas guzzlers curb their thirst.” It is in both countries national interest to control consumption and find ways to better exploit existing resources. Whether or not both countries will be able to work together is yet to be seen. Yet, one could hope that both China and the United States could work as partners to control their thirst for oil.

Realities of High Consumption

The problems of intensive oil consumption are largely apparent to us. We see how high fuel prices can rapidly choke off economic growth. We see wars in oil-rich countries to create stability to ensure there is access to oil. We see terrorism breeding from petrol dollars and the hate for a society that seems to never want to get off the oil habit. All this oil is encouraging global warming that may dramatically change our world. As Morganthau (1994) would note, oil is an essential resource for any modern nation (p. 130).We can't afford to lose access to inexpensive oil. We need to do something, but what that exactly entails is far from clear.

Until the past decade the oil consumption problem was largely a United States problem. The United States has the largest population of industrialized nations spread over a large landmass. These are all factors that lead to high oil consumption. We are up to 20.6 billion barrels per day (bbl/d) from about 20 bbl/d in the mid-1990s. Our increase is a concerning, but China's thirst as an industrializing nation is far more concerning. China in 2000 was using roughly 4 bbl/d, and now it up to 6.5 bbl/d, and expected to grow to more then twice that amount in 2020 according to US DOE projections (2004). Those numbers for China may seem to be deceivingly small until one realizes that they reflect a situation where almost all of the affordable oil is already being consumed.

When demand exceeds oil production supply-pull inflation results. Morganthau would say that cheap oil is key to an industrialized society (p. 133). While the effects are relatively minor compared to the strong United States economy right now, the problem could grow over the next few decades as oil supplies grow tighter. The United States could face high inflation in the next few decades paired with high unemployment or stagflation. The current increase has been slow enough for consumers to adjust and avoid inflationary pressures, but future spikes may happen quicker (“Counting the Cost”, Aug. 2005).China is in a far worst position with it's state set price controls and industrializing society. . In many cases, oil is simply not available in China as price controls lead oil companies to stockpile oil or search for other markets, when crude exceeds the price that it can be sold China (“China's Shrunken Thirst” Jul. 2005). We are in a better place then China right now when it comes to having plentiful oil, but for how long?

Even if Americans can sustain the increase in prices by budgeting more for oil, the demand creates an increase in potential for conflict between the two nations. Probably the biggest source of future oil reserves will be Alberta's tar sands. There is 174 bbl of known oil there, with as much as 331 bbl could be affordably extracted at current prices. Up to 1,200 bbl could be extracted if the market would bare higher costs according to Wikipedia's article on Athabasca Oil Sands (2005). As Zedwig (2005) notes, both the United States in the Vice President's 2001 Taskforce on Energy and China have expressed interest in tapping these resources to feed their thirst. China has been actively seeking contracts with the Alberta's government. Alberta seems obliged to send more of its oil to China over the US due to the soft-timber trade dispute. Even if we could share this relatively vast and largely untapped source of oil, it would be impossible to get enough to satisfies our demands. Alberta tar sands currently only produce about 605 thousand barrels a day, a small fraction of either country's demand for oil. This number is expected to rapidly grow, but it will be a long time before these fields become a major source of oil. Another big source of oil that has been relatively untapped is Russia's oil fields. Similarly, when China bid to buy up up Yokos Oil, one of the biggest oil companies in Russia the United States was concerned. The People's Daily in China article on Oil Production (2005) dismissed the threat to our interest as Russia is a relatively small exporter of oil (less then 1%) to the United States. Yet, that demand is expected to grow. It is not surprising that Zweig (2005) is so concerned about the possibility for future conflicts over oil consumption.

Terrorism is another issue that high oil consumption has caused. Morganthau (1994) noted how key oil access is to industrialized nation's survival, and how it empowers otherwise minor countries over big industrialized countries (p. 137). Petrol dollars are known to fuel terrorism, particularly when dealing with unscrupulous nations. China is a solid example of this. Zweig (2005) notes that the Chinese government has been known to sign deals and build infrastrure in countries like Burma and Sudan. These countries that United States has embargoed as they support terrorism and have horrible human rights records. International morality seems not to play a role in China's internation relations, where the government claims to be entering deals regardless of a country's records. This clearly is unacceptable and we must do something to change it.

How Both Countries Can Work Together

It seems the realities of high oil consumption can be addressed through cooperation. Yet are the differences between China and the United States too great to make cooperation impossible? As Morganthau (1994) would note, both countries are soverign and will most likely attempt to pursue their own interests. It would seem on initial inspection that it would be too difficult to overcome these differences. Several of these differences are enumerated in the article “China vs. US” (2005). China is an authoritarian communist state and the United States is capitalist state. China is industrializing, while the United States is a post-industrial state. China's population is far greater and they seek a far greater increase in their standard of living then does the United States. Despite these significant differences, there seems to be a common interest in working together.

The idealistic solution is for both countries to find ways to control their consumption and get resources from places that are mutually acceptable. Former Secretary of State Henry Kissinger noted that it would be impossible for both countries to prosper unless their was a better understanding between the two on the limits of energy consumption. Small nations that lack essential resources have found bonding together in bilateral or multilateral agreements essential to their success. Lampton (2005) cites the very successful bilateral resource consumption agreement between Indonesia, Malaysia, and Thailand. The situation of China and the United States is in over crude oil may be slightly different, but many of the principles of finding sustainable sources of resources that won't be interfere substantially with the other county's interest would be beneficial.A more pragmatic possibility is that China could sign on to the treaty that sets up the International Energy Administration (IEA). According to Lampton (2005), they are simply of observer status and not a full member. China has gotten closer to the IEA and has allowed it to discuss with energy ministers on future energy use plans. Yet, unless it's a treaty member it can not work directly with planners to find ways to cut consumption and obtain oil in a globally sensible fashion. Joining would have the downside for China of requiring more openess on it's oil dealings throughout the world. This could put an end to deals with questionable countries like Burma and Sudan. Yet, certainly the United States' interest would be well served in doing this.

The most promising area where both countries are working together is technology. The United States has spent a significant amount of money on developing efficent technologies compared to China. US companies can make a lot money selling their technology to the Chinese government and companies that badly need them to overcome the dirty and inefficient technologies they use for everything from energy production to powering cars. The IEA views the ability of China to move to these newer technologies the key to it's survival (“IEA Urges”, 1994). According to Calder (1996), several of the big American and foreign automakers are working with China to develop a small and efficient personal vehicle to move people around. China should be able to develop some of these technologies on it's own soil, but its significant base of engineers are rarely rewarded financially for developing new technologies. Not only would China purchasing United States technologies be beneficial for our economy directly, it would also reduce oil consumption and global pollution.

Conclusions: Don't Hold Out Too Much Hope

It is idealistic to see China and the United States working directly together. Differences in these sovereign nations make cooperation either difficult or impossible. A better hope is to see China sign onto the treaties of the International Energy Agency and fully participate in IEA programs. That possibility is also unlikely with the secrecy that surrounds the administration of Chinese government. Our best hope is that China will adopt cleaner and better technologies made by the United States. Doing that will benefit us economically and will reduce oil consumption.

Maybe the strongest factor that will pull the two nations together is higher oil prices and a greater public awareness of the problems relating to high oil consumption on both sides of the world. When oil becomes expensive and rarer, people will want to cut down their consumption and find better ways to utilize the resource. What will happen will only be defined in the future.

Works Cited

Anonymous. “Athabasca Oil Sands” Wikipedia Online Encyclopedia. October 21, 2005. Retrieved on November 5, 2005.

BusinessWeek. “China's Shrunken Thirst for Oil”. BusinessWeek Online. July 19, 2005.

Calder, K. “Asia's Empty tank”. Foreign Affairs. New York: Mar/Apr 1996. Vol. 75, Iss. 2; p. 55. Retrieved online from ProQuest Database.

Economist. “Counting the Cost”. Economist. New York: Aug 22, 2005. Vol. 376, Iss. 8441; p. 55-56.

Economist. “Oiloholics”. Economist. New York: Aug 22, 2005. Vol. 376, Iss. 8441; p. 55-56.

Human Events. “China vs. America: Oil-Consuming Competitors”. Human Events. Washington: Aug 22, 2005. Vol.61, Iss. 28; p. 3. Retrieved online from ProQuest Database.

Lampton, D. “Paradigm Lost: The Demise of 'Weak China'”. The National Interest. Washington: Fall 2005. Iss. 81, pg. 73-81. Retrieved from the InfoTrac Database.US DOE, “China”. Country Analysis Briefs. US Department of Energy. Retrieved November 7, 2005.

Yeomans, M.. “Crude Politics”. The Atlantic Monthly. Boston: Apr 2005. Vol. 295, Iss. 3; pp. 48-51. Retrieved online from ProQuest Database.