Western expertise in fracking is already well on its way to sparking an energy revolution in America. Can it do the same for an energy-hungry China?Anglo-Dutch energy giant Shell Oil is determined to find out. In March, Shell secured contracts to co-produce shale gas in China and has pledged to invest at least $1 billion per year on energy extraction. Reuters has an update on Shell’s ambitious planned investments:
Asked if the firm remained committed to a plan to invest $1 billion a year in China’s shale gas over the coming few years, Lim Haw Kuang, Shell’s top China executive, said in an interview: “Yes, yes and yes.”“If there has been an adjustment to that pledge, it could only be an upward revision,”Shell is also aiming to build a $12.6 billion refinery and petrochemical complex in eastern China, a project that could become the single largest foreign investment in China.
Even as Westerners are increasing their investments in China, China is investing in traditionally Western markets as well, including in the Gulf of Mexico. BP is selling $8 billion of its assets in the Gulf, and Chinese companies are likely to buy a piece of the slice, which will allow them to master the skills necessary for complex off-shore drilling.This is a major shift from the energy policy of the past decade. It was only seven years ago that the U.S., concerned about energy independence, held up a Chinese bid for Unocal until China eventually withdrew from the deal.Those concerns seem less pressing today. Cnooc’s $15.1 billion bid for Canada’s Nexen, China’s biggest foreign takeover bid ever, would give it an important stake in North American energy markets. There are no signs that America plans to block this bid.Having more energy from more varied sources on the world markets is a good thing, because it reduces the world’s reliance on rogue states for oil and gas. Further integration of China into the world’s energy markets is also something we should embrace rather than fear. A China that doesn’t feel pinched for energy will be happier with the current world economic system and will become a more willing partner to the American global order. Maintaining this order is the centerpiece of American policy in the Pacific. We should look on anything that makes this stronger while increasing the global energy supply as a major coup indeed.