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Thirst for Energy Drives Beijing's Global Push

Hugo Chávez, left, with Chinese energy official Zhang Guobao in April. ENLARGE
Hugo Chávez, left, with Chinese energy official Zhang Guobao in April. Agence France-Presse/Getty Images

WASHINGTON—China's emergence as the world's most voracious energy consumer has wide implications for U.S. foreign policy as Beijing moves to sew up energy sources from the Middle East to Latin America, and strives to take a lead in advanced energy technology.

The Obama administration has emphasized cooperation in its energy diplomacy with Beijing, promoting joint projects on natural-gas exploration and the development of new technologies.

But behind the scenes, experts say China is seeking resources—and energy leverage—around the world. Over the past year alone Chinese state-owned companies have signed major deals to extract or export oil, gas, coal, uranium and other key natural resources from Canada, Venezuela, Iraq, Australia, Turkmenistan and South Africa.

"China's main mission is to protect and fuel its growing economy," says Karen Harbert, head of the Institute for 21st Century Energy at the U.S. Chamber of Commerce. "And to do that, China is engaged in a concerted campaign to grab conventional energy resources around the world."

In November, for the first time, China outpaced the U.S. as the largest buyer of Saudi crude oil. Earlier this year, two Chinese warships made a port call in Abu Dhabi, the oil-rich capital of the United Arab Emirates, the first visit by the modern Chinese navy to the Persian Gulf.

China's fast-growing demand for petroleum—in large part a reflection of the country's new status as the world's largest automobile market—has raised fears that as the world economy recovers, oil prices could jump again amid competition for supplies. In Washington, concerns about long-term energy security have prompted the Pentagon to launch new efforts to reduce its dependence on petroleum and seek new sources of fuel for military vehicles and planes.

Oil isn't the only strategic energy resource on China's shopping list. China's coal imports more than doubled in the first five months of this year over the 2009 period, leading some analysts to predict a global scramble for coal reserves as China's appetite increases.

China's thirst for oil has also increased Beijing's influence in the Middle East and parts of Africa—at the expense, some say, of U.S. clout in those regions. Within the United Nations, Chinese officials have repeatedly watered down more punitive measures aimed at thwarting Iran's nuclear ambitions.

China disputed the latest statistics from the International Energy Agency showing it surpassed the U.S as the world's largest energy consumer last year. Correspondent Shai Oster gives WSJ's Jake Lee the larger context on the story.

China has also started playing a larger international role, competing for influence in some of the world's most important energy basins. After Baghdad opened up Iraq's oil fields last year to foreign development, Chinese companies poured in and are now the largest foreign players. China also has significant contracts for oil and gas development in Iran.

China recently completed a 1,100-mile gas pipeline to connect its factories and power plants to the vast gas reserves of Central Asia, part of China's stiff competition with Europe over a key energy source. At the same time, China has become a major buyer of liquefied natural gas from Australia, Malaysia and Qatar.

It is China's push to adopt and expand more efficient energy technologies—from solar to advanced batteries for electric vehicles—that has raised the most vocal concerns lately in Washington policy circles.

President Barack Obama often points to the advances being made in China in touting his own clean-energy ambitions, arguing that the U.S. must move swiftly if it wants to keep abreast of its primary Asian competitor. China is now the largest exporter of solar panels and is fast expanding its capacity to produce wind turbines and advanced batteries for electric cars.

Not everyone thinks the two countries are heading for a tussle over energy.

"There is no reason we have to be at odds with China on the energy front," says James Woolsey, the former Central Intelligence Agency director who now concentrates on energy technologies. "In many areas, with both of us being major energy importers, our attitudes should align more than diverge."

Write to Neil King Jr. at

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