A worker on a drilling platform at Daqing Oilfield in Heilongjiang Province, northeast China, on January 8 (XINHUA)
China-U.S. energy cooperation has experienced a roller-coaster ride over the past few years. Which way will it head under Joe Biden? Mitchell F. Stanley, Chairman of the National Center for Sustainable Development (NCSD) in Washington, D.C., shares his observations with Beijing Review reporter Tao Xing. This is an edited excerpt of the interview:
Beijing Review: According to Forbes, the U.S. will become the world's largest oil and gas exporter in the next few years. China is the world's largest importer of crude oil, and the U.S. accounted for 7 percent of China's imports through mid-September 2020, according to London-based market intelligence firm Vortexa Ltd. How can the two countries expand their energy cooperation?
Mitchell F. Stanley: The United States has tremendous natural resources and is extraordinarily good at exploration, development and innovation in the energy sector. The last few years have been very difficult due to the fact that the U.S. has begun to shift from energy imports to exports and from oil infrastructure to gas export infrastructure. Also, the uncertainty in the policy framework, tariff policy in particular, undermined what all markets require: certainty of obligation, price and execution. Without it you cannot have a functioning market.
Certainty must be restored to the U.S.-China relationship in all things. Americans and Chinese are in a historically good long-term relationship and should help one another to provide the best for the world.
The Chinese have a long view of history and a geopolitical worldview shaped by many centuries, so they appreciate the temporary as well as long term, and can therefore deal with any changes to the status quo, natural or manmade.
What steps should the new U.S. administration take to improve the current situation?
Currently, the United States' cooperation with China is at low ebb, caused in no small part by the novel coronavirus pandemic and the view among some that China could do nothing right. But China and the U.S. had been friends for a long time before and will be again hopefully under the new administration. Biden was the long-serving chair of the Senate Foreign Relations Committee and is well versed in getting things moving in Washington. I think this is to everyone's benefit.
Policy is needed for all to plan and anticipate outcomes. The era we are emerging from shows the need to actively try to learn about one another as people, societies and nations.
Crude oil occupies a large part of the energy trade between China and the U.S. As both nations are part of the global effort to mitigate climate change, what changes might occur in the composition of the trade?
As China could not wait any longer for certainty in the global leadership role on climate, it offered its input and science-based expectations, which I believe now the world accepts. Leadership is best by example, and I believe the Chinese energy industry must do its part and can by offering petroleum users global solutions to help mitigate the intensity of the climate change we are experiencing.
The U.S. produces many specialty products that make petroleum fuel more efficient and refinery operations less wasteful and more profitable while lessening environmental impact.
Many American products are not generally available in China. The on-again, off-again efforts to build export terminals for U.S. liquefied natural gas would benefit from clear direction, and hopefully much more U.S. natural gas can be exported to China in the near future. This would be very helpful across the board.
The NCSD is active in China-U.S. new-energy cooperation. What new progress is being made in this field?
When asked about "new" energy, some may think of battery technology, which can be a good storage medium but doesn't create energy. I believe that any "new" technology must both make and store energy as part of its operational mandate.
The NCSD is working closely with the George H.W. Bush Foundation for U.S.-China Relations in Houston to bring Stera Energy to China.
This technology works on principles of basic physics and lifts and lowers heavy mobile "masses" synchronized by very sophisticated controls to generate power on the slide down and store "potential" energy on the way up. Each block is very heavy and can be used to sequester contaminated debris away from rain water without leaching contamination. We are working with the Energy Investment Professional Committee of the Investment Association of China to promote it in China and other countries participating in the Belt and Road Initiative.
Do you have any additional suggestions for promoting China-U.S. energy cooperation?
I suggest we look at the economic impact and resilience of the small business sector in China and the United States.
One feature of China's Guangdong-Hong Kong-Macao Greater Bay Area International Energy Exchange Center platform plan is to establish a Houston export hub which will focus on providing market access to small and medium-sized enterprises, and becoming a facilitator that allows trading in goods and services that both nations want and need, and in doing so can better understand one another.
I know there is a great yearning to be part of the China market on one side and the U.S. (North American) market on the other. Something new needs to be tried to let American small businesses find buyers by traveling to Houston with their wares to meet people (vetted by the platform) who can give them sales orders and let the traders do what they do best.
I have seen too many U.S. small businesses and have heard of too many small Chinese manufacturers with interesting products that get nowhere trying to do it all themselves. The U.S. does enough to help the big businesses already, my suggestion for the new administration is to try something else.
Copyedited by Garth Wilson
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