The UNOCAL Deal Seems Hugely Unwise…
…and I’ve thought so from the first word of it. Letting them buy a tchotchke retailer is one thing, but something so closely tied to the moving parts of this country and it’s defense is naivety at it’s most dangerous. Everyone doesn’t have a right to scoop up U.S. assets. Last time the Chinese said ‘trust us, it’s okay’, they had barefoot folks in quilted coats massed on the Yangtse. They haven’t changed. Should they make a move on Taiwan, I think we’ll find the flow of oil dissipating the second our warships set sail.
Congress is finally talking. I hope they spike the whole deal.
“The simple fact is that energy is a strategic commodity,” said Rep. Duncan Hunter, chairman of the House Armed Services Committee. Hunter, R-Calif., said Unocal’s holdings _ from drilling rights to exploratory capabilities in Asia and elsewhere _ “represent strategic assets that affect U.S. national security.”
CNOOC Ltd., a Hong Kong subsidiary of state-owned China National Offshore Oil Corp., has offered to pay $18.2 billion for Unocal. That is about $2 billion more than a proposal from Chevron Corp.
The House hearing into the Unocal deal turned into a broad attack on China. Both lawmakers and witnesses dismissed CNOOC’s claims that its pursuit of Unocal was simply a commercial business deal, rather than part of a government strategy to gain control of more global oil and natural gas assets.
To accept that it is simply a commercial deal “is extraordinarily naive,” former CIA Director James Woolsey told lawmakers. He said CNOOC is 70 percent owned by the Chinese government and its top executive was appointed by the Communist Party.
Indeed.
World Stuff | Crusader | 
July 14, 2005 10:39 am
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I’m sure Clinton’s all for it; the chinese were his bestest buds…and bankers.
Yeah, this deal is a spectacularly bad idea. Let the Chicoms squeeze our energy supplies? I try my damndest not to buy an umbrella from the Reds, and now “Made in China” is going to be stamped on the gas pump? They could play hell with the entire country – embargos, substandard product, chemicals that produce toxins when burned… What a cheerful thought, thousands dead during rush hour because of some nerve agent in the hi-test.
They’re still Dianne Feinstein’s best buddies.
While I don’t think it’s a great idea, it’s not like the flow of oil would be cut off simply because Unocal is owned by Chinese – enemy assets can be seized in wartime (though why we’re not doing it right now to certain Arab despots still escapes me). What would happen, though, is attacks on facilities and shipping.
But Unocal assets seized here wouldn’t help getting the oil shipments here that are needed to fill those refinery tanks, right?
Probably some but not all of them. Most of the world’s tankers are not owned by the companies whose oil they transport.
Regardless who owns the tankers, Unocal oil pumped wherever would not be going into tankers wherever to get to Unocal refineries here. Right? Now, I’m not at all sure of the percentage of the U.S. market that Unocal sits on, but as tight as supplies are, any disruption has severe consequences.
That’s definitely correct. This has to be stopped, and thank God it’s on the Congressional radar screen now rather than after a sale.
I still don’t think Chinese ownership of Unocal has any particular wartime implications. IIRC the statistics from Shadow War, about 50% of the world’s oil passes through the Strait of Malacca, including a sizeable percentage of China’s imports. That strikes me as a far more valuable wartime target than whatever Unocal pumps.
However, there are significant peacetime (or “New Cold War”) implications which should prevent the sale. The Saudis have raised hell with oil, we don’t need the Chinese doing it too.
“…Unocal oil pumped wherever would not be going into tankers wherever to get to Unocal refineries here. Right?”
That depends. If things got so hairy that the US government seized Unocal’s assets here, other countries would likely do the same, and you’d get proxy fights in various oil-producing between us and China, some of which would probably go one way and some the other. It’s an extremely dangerous game, however, and the Chinese are probably prepared to play harder than we do: for instance, the Saudis simply could not impose an oil boycott on China the way they did with us, as I expect that would immediately be responded to with the threat of a Chinese nuclear strike. Nor do I believe that would be a bluff.