Sep 11
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Scenario Analysis – China Choices for Energy Sufficiency
At the end of 2010 Shell Oil produced two future scenarios of how the world might revert wholesale to renewable energy sources – Scramble and Blueprint – both of which take account of China’s new-found role as energy heavyweight. TrendsAsia extended the Scramble scenario into a third, grittier scenario called Skirmish
The first, called Scramble, sees countries in a grab-fest for energy resources they stake out with gusto, cordoning off supplies for their own society’s consumption and perhaps – if there’s enough to go round – for their allies, as well. A lack of inter-governmental coordination and unfettered use and abuse of fossil fuels leads to a global slowdown around the year 2020, which catalyzes governments to place public and private strictures on the use of energy until, ten years on, the world has become green.
Blueprints, Shell’s alternative reality, sees governments coordinating responses to energy shortages and climate change by shared mechanisms for carbon and CO2 emissions taxes. The developed world in particular licenses energy saving and energy efficient technology to China in return for the country’s participation in global frameworks to make the transition to cleantech. China’s energy consumption peaks by 2055, at which time the world is using 30% less energy per capita than it was in 2010.
Though the Scramble scenario seems the more draconian – and therefore, most realistic – it can still be extended further into yet another scenario. A third scenario might be called Skirmish, in which China in its own scramble to secure energy sources presses Vietnam, Cambodia, Laos and Thailand to blockade the export of natural resources to China in retaliation for China siphoning the once heavy flows of the Meikong River southward and for its navy blockading the oil and natural gas fields discovered in the South China sea – territory claimed by Vietnam, Thailand, Brunei and the Philippines.
Pushing the envelope on the fantasy, China has also moved into Arunachal Pradesh with several divisions of the People’s Liberation Army. The region’s provenance has been in dispute between China and India for several decades, ever since the Indian army was thrashed during a brief skirmish there in 1962. China needs the region to secure the glaciers that feed the rivers that power its great hydroelectric dams.
Meanwhile, Japan’s Self Defense Force is on high alert after a Chinese submarine sinks a Japanese frigate patrolling the Kurile islands off Japan’s coast. The islands sketch another mineral-rich deposit claimed by Japan and China. A fit of democracy and China-bashing in Kazakhstan forces China’s hand as the Middle Kingdom consolidates its hold on the oil fields into which it has sunk hundreds of billions of dollars over several decades cultivating the dethroned autocracy.
Skirmish is the scariest of the scenarios as little is known of the domino effect in which one country’s actions inadvertently set off a cascade of unintended consequences for other countries.
Though all three scenarios are fanciful, they bring to mind two important points: 1) the world is increasingly interconnected through energy usage; and 2) energy politics will increasingly become the centerpiece of domestic policy and of geopolitics for developing and developed countries. All the scenarios agree that fossil fuels that are still economically accessible are finite in amount: oil, coal, even natural gas.
The zero-sum world view of fossil energy sources has already motivated countries – especially China – to set off around the world to stake their energy claims. International trade, as well, is warping at an accelerating rate toward greater movement of oil, natural gas and, in the last two years, coal. Though China’s goals to reduce energy intensity as a proportion of GDP growth is a step in the right direction, all of the same construction technologies the West used fifty years ago to (re)build its post-war societies are and will continue to be in use for at least the next twenty years.
The technologies themselves and the kinds of energy-intensive infrastructure projects to which they are being put to use are increasing China’s appetite for energy exponentially. Increased energy usage as urbanization becomes more deeply seated in the country is adding to the high-speed momentum.
In no way can China’s leadership show it is truncating promises to its citizens for access to the middle class by reducing access to energy sources – whether gas to power automobiles or coal to power plants that produce electricity that run wealth-creating factories and office buildings: those waiting in line for the good life would not stand for the policy sleight-of-hand. And as many of China’s foreign policy actions of the past two years have illustrated, the country’s leadership plays almost exclusively to a domestic audience, for whom a scrappy China is the kind they like to see performing on the world stage.
China-border skirmishes over energy and water may be a more likely scenario than the West would prefer to consider.
Image credit: World Energy Technology Outlook 2050 study published by the EU Commission, 2007
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