US Congress opposes Chinese bid for Unocal

This just in (thanks to commenter Roy for pointing it out).
The US House of Representatives has voted for a measure opposing CNOOC's bid for the US oil exploration group Unocal. Congress voted 398 to 15 for a non-binding resolution that called for the US government to block the $18.5 billion bid by China National Offshore Oil Corporation (CNOOC).

The resolution said oil and gas are "strategic assets" and that a Chinese state-run firm's takeover "would threaten to impair the national security of the United States."
I linked to the Irish publication out of convenience, but here's the CNN/Money mention, and a more in-depth article at the New York Times.

I'm not exactly sure how to reconcile this with the other bit of CNOOC news that was also published today:

China's CNOOC Ltd. on Friday said it asked a top-level U.S. government panel to review its proposed merger with oil and gas producer Unocal Corp. in an effort to advance its $18.5 billion cash bid.


A Unocal spokesman told Reuters the company was not involved in CNOOC's request for a review from the Committee on Foreign Investments in the United States and that the two sides do not have an agreement that would necessarily spur CNOOC to request that review.

In any case, the former announcement is another stunning example of a Congressional action reported on the Friday before a holiday weekend (not to mention the distraction of the Sandra Day O'Connor announcement). Use this thread to discuss your opinions of the congressional decision, and I'll keep trying to find more articles on it. Or, leave them in the comments.

Technorati Tags: ,

How dare they stand in the way of the Free Market!

I almost suspect that CNOOC is trying to push for the political review on the assumption that it will be blocked. China will then take the cue to use non-economic means to gain control of other oil supplies around the world and particularly in East Asia.

Am I sounding paranoid?

Well, the spot prices of oil are rising on this news -- back up to $59 already. The market appears to have decided that if the Unocal deal is blocked, as appears likely now, oil is no longer fungible, and therefore, oil in the international market will become more expensive.

Who does this hurt? -- mainly US and Europe. Europe is more prepared for this eventuality than the US is. The likely US response will probably be more of the same. But its armed forces are over extended, and its ability to fight 4 wars at the same time is highly questionable.

And what exactly are the Chinese supposed to spend theri qasillizioins of dollars on? Real Estate? What then are dollars good for? Oil is what they most need.

The Chinese are bigger suckers than I thought, if they just let this pass. Giving us free computers and not getting anything in return? What fools!

Well, for Congress this isn't something trivial like losing jobs to China or too much debt, this is messing with their SUVs. No wonder they flashed into action.

Well ... I guess I was right after all: Unocal holds "strategic assets" whose sale would "impair the national security of the United States."

How stupid are they exactly? Why not at least wait what the bids end up being from Chevron and CNOOC, and then which Unocal's board recommends? Why make it into a political show at this stage?

I do bet "the Chinese" are using this as a demonstration to other nations, especially in the global south, of just how much you can trust US rhetoric on free trade and economic globalization.

remember the Chinese invented Chess. They are thinking 3-4 steps ahead.

The global south already knew how much it could trust US rhetoric about any subject, which is no trust at all. The vote is all about Empire (national security), which is very clear when you think about CAFTA passing in the Senate. Shortly after WW2 a policy/planning position was detailed in the official records of the State Department that can be shortened and paraphrased as the need/right to continue to consume/hoard as many natural resources as possible to be retained and expanded as the Primary Goal of US foreign policy, for which the Cold War served as longstanding cover (FRUS "Policy Planning Study 23" 1948 vol.1, 24 Feb 1948). It is this basic policy that goes hand in glove with The Open Door as Fundamental Imperial policy. That's right; it's history you never learned at any educational level unless you're a student of the US Empire, went to the reserve stacks, and read the documents.

Of interest also is the fact that the vote was taken during the current Sino-Russo summit, so I wonder if the vote influenced their talks?

I have no idea how the happy face appeared. The date is 1948.

an "8" followed by a ")" will give you the happy face with sunglasses! 8)

(Yet another example of the folly of "in-band signalling".)

Have a nice day! 8)

Count on the House to do exactly the wrong thing, cf. their version of the energy bill. But China is allowed to buy other things like IBM's laptop division. China is also welcome to buy my house if they like, it's for sale.... 8)

From the ASPO Newsletter 55 (July 2005) - A Flat-Earth Cathedral makes an Award

A principal Flat-Earth Cathedral has made an award to one of its members for an outstanding contribution to energy economics.

We may imagine the ceremony.
A litany is intoned at the grail of the Liberalised Market where a statue to the God of Supply matches that to the God of Demand. A rousing hymn entitled The Stone Age did not end for want of Stones is sung by a choir of MBAs. Black suited bankers fill the cloisters murmuring responses while political leaders genuflect in the front row. The climax of the ceremony comes when the acclaimed acolyte climbs to the top of the spire where thick clouds of industrial smog obscure all but the upturned faces of the admiring congregation. He descends to read the sermon expressing hopes that the World’s poor countries may soon be industrialised too. The bankers smile at the prospect of earning halos by forgiving bad debt.

Meanwhile another service is in progress at another Cathedral on a hill across the town, where the sun shines giving a clear view of the horizon, confirming the curvature of the Earth. A Priest reads rival scriptures proclaiming that The Meek shall inherit the Earth. His sermon warns that this will soon come to pass as the Earth’s once prolific resources of oil and gas deplete.

The end of peak oil!

Assuming the company is worth about 18.5 billion, this is nothing. I don't see any reason to disrupt trade and economic relations for something so small ... congresscritters are so strange.

Speaking of the end of PO, how about a hard-hitting post on the new FUSION project starting up in France (here for example). And on the heals of that announcement this week, China's going for it too! Prototype due in the 2030's, online by 2050. Now, all we've got to do is last that long.

Here is a Greenpeace position on the New Fusion Reactor

Greenpeace deplores the agreement by the Representatives of the Parties to the International Thermonuclear Experimental Reactor (ITER) (1) to construct one of the world's largest nuclear fusion experiments in Cadarache, Southern France. The project, estimated to cost 10bn euros, will not generate any electricity, instead it will need massive amounts of energy to heat up.
"With 10 billion, we could build 10,000MW offshore windfarms, delivering electricity for 7.5 million European households," said Jan Vande Putte of Greenpeace International. Advocates of fusion research predict that the first commercial fusion electricity might be delivered in 50 to 80 years from now. But most likely, it will lead to a dead end, as the technical barriers to be overcome are enormous.

Today, the nuclear industry presents itself as the solution to climate change in a massive green-washing drive. Far from being a solution, the nuclear option stalls real action to combat dangerous climate change. It is taking away the money for real solutions that are ready and economically available at a large scale, such as wind energy.

Central planning has arrived in the USSA. Investors will answer with their feet. If one is not guaranteed anymore to yield the maximum return on an investment by selling it to the highest bidder, the money will go elsewhere in the long term. Or will this administration make up for the difference to the second-best bid? (Rhetorical question only)

It's a non-binding resolution folks. It only means something to Joe six-pack who will vote in the next election - or not. 8(

It may be non-binding, but it still has a distinct chilling effect on the investment climate. It means something to lots of people other than just joe sixpack.

I believe Andrew Mckillop and David Fleming have written about nuclear fusion lately. I know f***all about nuclear power but it seems a desperate leap in the dark. All we will be left with is one power station that is a show piece and nothing else.
Can anyone clear up exactly how much uranium is available for nuclear power? I read something about Deffeyes saying it could last a thousand years and then David Fleming saying it can only last 30 or so and a lot less if everyone goes nuclear. Any experts out there?
Why did I choose to study Law? Oy vay iz mir...

Philip, you may like to look at

"Peak Oil and the Fate of Humanity" is a PowerPoint book that deals with the future when oil production will no longer keep up with demand.
The author explains the importance of oil in our industrial society, what substitutes are possible and what difficulties they imply.

particularly look at Chap 4A

Thanks for taking the time to answer Rajiv but I have been reading up on PO for at least a year and I'm a member of the group who set up the PO UK conference in April (Campbell, Simmons, Skrebowski etc. attended and gave presentations). My specific point is about nuclear power. I think Andrew McKillop's new book The Final Energy Crisis might be the place to go. The Powerpoint is interesting but it seems based on a very limited model. The amount of waste and pointless travel should mean a lot of transportation fuel could be discounted. I do feel intuitively and from what I've read that modern civilisation doesn't stack up but I am also a little more optimistic about any Powerdown than M. Beriault and all the Hansonihilists out there in doomland.So I want to know about breeder reactors, plutonium etc. from a purely theoretical point of view (but not too technical).I know I'm ignorant about this so don't anyone make any bitchy little points.
To Prof Goose and friends: what do you make of the economic analysis issuing from those like Roland Watson at New Era investor? I have to say it sticks in my craw a bit. It seems to me that all those lucky rich people stand to benefit enormously (relative to others of course)from any financial collapse: first to know, first to get out, last to lose savings, last to suffer real hardship, first to capture resources, first to redevelop any hierarchy, last alive etc. etc. This is presupposing a real collapse of course.
Anyway I do have to hand it to the Powerswitch people, here in the UK,who are fundraising for taking out national press adverts and are also planning to take to the streets to inform and campaign. Well done chaps!
Anyone else out there planning to actually get out, dirty your hands in a bit of street politics, and try to inform the people?

"remember the Chinese invented Chess. They are thinking 3-4 steps ahead."

They didn't invent chess. They invented Wei Ch (aka Go) which means they're thinking about ten steps ahead.

Philip, I get where you are coming from. I will get back to you on that. The last time I was involved in an economic analysis of breeder reactors was almost 30 years ago. So I will have to do some searching. and refresh my knowledge base.

On the China issue, there was something ineteresting on Bill Totten's blog Legitimizing the Regime


In response to my post on May 28th of recent comments by James Howard Kunstler in his Clusterfuck Nation weblog, a colleague wrote this:

"I certainly agree with Kunstler that suburbanization and sprawl has been an environmental and social disaster, and like him I am eagerly anticipating a return to sanity imposed by higher oil prices. But he is way off base when he says that the USA invaded Iraq so that Usanians could have gas to put in their SUVs. If all they wanted was gas for their SUVs, they would not have invaded Iraq; they would have had peaceful relations with Iraq and simply bought from Iraq the oil that they needed, which Iraq was very much willing to sell. Invading Iraq has actually had the effect of causing oil prices to rise because of the disruption of Iraqi production, so this war has actually inconvenienced SUV drivers. The real purpose of the invasion was to consolidate US influence, militarily and otherwise, in the oil-producing zone so as to have a veto on China's economic development, because China is dependent on Middle East oil. The idea is that by controlling Middle East oil the USA has China by the balls - or at least is positioned to grab China's balls at a moment's notice. That is a far more important consideration for the Usanian elite than cheap gas for the SUVs and minivans of the suburban masses. The elite does not need cheap gas. They have lots of money to buy gas at any price. Their concern is controlling the world, not saving money at the pump."

I think it is useful to distinguish between the aim or objective of US rulers in invading Iraq and their need legitimize their regime to the US populace. They seem to aim, as my colleague says, to "control the world" but they may need to "save money at the pump" to maintain the legitimacy of their regime with the suburban masses.