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Location: United States

Monday, June 27, 2005

United States of China - or How I Learned to Stop Worrying and Love Oil Dependency

Question: What do Unocal, Maytag, and IBM's personal computer division have in common?

Answer: They are all targeted as the result of America's wrong-headed "free-trade" monetarist foreign policy.

Apparently, it takes an oil company to make Republi-vangelicals realize that their relentless pursuit of a dollar may actually be destructive to the American economy and people.

Yes, apparently sending a few billion dollars a year to the Chinese state-owned business conglomerate results in making them rich enough to take over our American businesses. Don't think for a moment that successfully buying American businesses won't mean those jobs automatically move to China, either. It only makes our dependence on China that more complete.

For those that don't keep up on oil companies, let's review what Unocal potentially being a Chinese company means:

1) Unocal is on the brink of being taken over by Chevron-Texaco, which broke into the Fortune 500 top ten when those two companies merged. The acquisition of Unocal by Chevron-Texaco would rival Exxon-Mobile and is a bad enough development for consumers since that would put Standard Oil West and Standard Oil East back together and push them to the brink of reconstituting one of the largest monopolies in the world.

2) Unocal was posed to become a major Asian producer when the Taliban went bat-shit crazy in the 1990s. That pipeline still holds the potential for uniting South-Middle Asia, and although Unocal is not currently bidding, a take-over by China would almost guarantee they would dominate that project.

3) Unocal is already heavily involved in oil operations on Alaska's North Slope. This puts Unocal in a position of pre-eminence for drilling in ANWR should that be approved.

4) Unocal owns a sixth-part of Alyeska - the company that operates the Trans-Alaska Pipeline. 20% of all American produced oil.

Now, I will connect the dots for anyone who can't see the obvious problem with this situation.

If Unocal is bought by the Chinese, they would collect a premium on every barrel of oil sent through the Alaska pipeline - which is about one-fifth of every drop of oil produced in America. Want to see oil prices really screw the American economy?

If Unocal is bought by the Chinese, about one-eighth of all oil produced in Alaska would belong to the Chinese. This situation would only worsen if ANWR were opened for exploration - both because of expanded drilling opportunities for Unocal and because of a pipeline extension that would be a windfall for Alyeska.

Are you seeing big super-tankers full of dollars moving from San Francisco over to China?

If Unocal is bought by the Chinese, and wins contracts for natural gas and oil pipelines across Afghanistan, we would actually have American soldiers defending the ability of the Chinese government to turn a profit from international oil and gas markets. Those guys wearing our uniforms in Afghanistan? Yeah, they would be dying for China.

If Unocal is bought by the Chinese, our entire economy suddenly becomes threatened with being subject to Chinese conditions. We import BILLIONS of dollars worth of goods from China - many of which are used as parts in our floundering manufacturing sector. Those parts could suddenly face drastic price increases in the threat of a pipeline slowdown/shutdown forced by Unocal. The domestic need for oil would be irrelevant for drilling in ANWR as Chinese demand leads to oil wells being capped and held for Chinese use until prices make it profitable to sell to American refiners - prices like $100 per barrel, for instance.

In other words, our wrong-headed destruction of barriers to American money flowing into China is about to come home to roost in a very big way.

It's time to act now, before the future of America is held in the hands of the Chinese government.

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