Friday, January 14, 2011

Landmark Pipeline Congeals Sino-Russian Ties

The largest oil producer on the globe has directly connected with the world’s leading energy consumer.
At 11:50 a.m., on January 1, Yao Wei, general manager of Petro China’s Pipeline Branch, pressed a button at a facility near the China-Russia border enabling a torrent of crude oil to flow from Russia into China, which marked the official start of the operations for the landmark Russia-China Oil Pipeline.
The extensive global media coverage of the pipeline’s opening underscores how revolutionary the development is: It is the first time for crude oil to flow directly from Russia, the largest oil producer on the globe, into China, the world’s number one energy consumer.
Although Moscow and Beijing had discussed a direct oil pipeline for years, the talks normally bogged down in arguments over when and where to build it, which side would finance construction and maintenance, and other logistics. In light of these years of dithering, the newfound decisiveness that culminated in the Russia-China Oil Pipeline takes on great significance.
In 2010, China imported 52 percent of the oil it consumed, and that figure is expected to leap to 65 percent by 2020. The state-run China Daily said that a nation that imports more than 50 percent of its oil is at a “globally recognized energy alert level.”
China’s lightning-fast development requires energy resources and Russia, which acquires the lion’s share of its income through its growing oil sector, is delighted to supply its neighbor to the south.
“The operation of the China-Russia crude oil pipeline is the start of a new phase in China-Russia energy cooperation,” Yao said at the launching ceremony.
Before the Russia-China Oil Pipeline became operational, China’s oil imports came primarily from the Middle East, which meant the shipments had to travel thousands of miles through the Strait of Hormuz, across the Indian Ocean, and through the Strait of Malacca. Along this path, there are many spots at which the precious China-bound freight risks potential threats from pirates and foreign naval forces. But oil supplied from neighboring Russia directly enters China via secure land routes.
The International Business Times said, “It’s thus easy to imagine China, one of the largest buyers of energy, and Russia, a leading exporter of it, becoming natural friends” (January 11).
And the pipeline is not the only recent indication of China and Russia “becoming friends.”
Last September’s Shanghai Cooperation Organization brought Chinese and Russian forces together with troops from other Asian powers for a major 16-day military drill, and was the largest exercise of its kind ever held. Then, in November, Russia and China announced that, for bilateral trade, they would ditch the U.S. dollar and instead use their own currencies, the yuan and the ruble.
As early as 1934, educator Herbert W. Armstrong forecast an alliance between Russia and China. In the Plain Truth magazine, he wrote, “Scripture prophesies two great military powers to arise in the last days—one the revival of the Roman Empire by a federation of 10 nations in the territory of the ancient Roman Empire; the other … Russia, with her allies … possibly China or Japan” (June/July 1934).
He continued to proclaim this message as the Communist Party took over China. He clung to the prediction even as Russia and China severed ties in 1964.
Since Mr. Armstrong died in 1986, geopolitics have undergone massive changes. The ussr has fallen and been replaced by Vladimir Putin’s Russia, emboldened by its central role in global energy politics. China has developed into an economic and military powerhouse whose thirst for energy makes it anxious for alliance with resource-rich nations, like Russia.
As Russia and China continue to grow in power, the significance of Mr. Armstrong’s forecasts is increasingly clear. Since Yao pressed that button back on January 1, Russia has already sent 390,000 tons of crude oil from Skovorodino, Russia, on a week-long journey to arrive in Daqing City, China. And the pipeline, which adds $8 billion annually to bilateral Russia-China trade, will pump a total of 15 million tons of Russian crude oil into China each year. Some analysts forecast that the pipeline will double the volume of Russian crude being pumped into China within the next few years.
Russia and China are now close allies, and the world is taking notice.