China's Catastrophic Oil & Gas Problem

this video is made possible by curiosity stream and nebula watch another brand new full-length companion video to this one in my ongoing modern conflict series that explains the entire course of the ongoing conflict inside of china's xinjiang province and the genocide of the uyghur people who live there along with 14 other full-length episodes with more than 5 hours of combined content covering other major 21st century conflicts all of which you can access by signing up for the curiosity stream nebula bundle deal for less than 15 a year at curiositystream.com real life lore this is the south china sea the single most important and dangerous body of water anywhere in the world for the 21st century and the most likely place where the third world war could be triggered from seven different powers exist around this sea's perimeter china taiwan vietnam the philippines malaysia indonesia and brunei and they all bitterly disagree over their competing maritime claims here vietnam claims this much the philippines claims this much malaysia claims this much while brunei claims this much all four of these nations maritime claims in the south china sea overlap the other three in at least one other location and so they all have to an extent disagreements with all the others but all four of them are significantly more united against the much more dramatic and sweeping maritime claims of the fifth power to enter into the equation here the people's republic of china who claims for itself nearly the entirety of the whole sea at the tremendous expense of everybody else's claims around it in what they call the nine-dash line through this claim china asserts that around 90 of the entire south china sea are the exclusive territorial waters of china which not only brings it into direct conflict with the overlapping claims of vietnam the philippines malaysia and brunei but with the united states as well beijing's claim to most of the sea as territorial waters means that they also believe they have the authority to approve or deny any foreign navy from operating within it whenever they feel like it to which the united states owner of the world's most powerful navy fiercely disagrees washington considers the boundaries here to instead line up roughly with the 1982 united nations convention on the law of the sea the international law benchmark generally accepted by most other countries in the world that would ordinarily establish the maritime boundaries in the south china sea to look more like this with 12 mile territorial water stretching out from everybody's coastlines and 200 nautical mile exclusive economic zones stretching beyond that through the open ocean that anyone's navy can sail through without any permission at any time these different maps over the same area one believed by beijing others believed by vietnam the philippines malaysia and brunei and another believed by washington are all directly at odds with each other and are shoving both of the superpowers into an increasingly dangerous conflict in order to further enforce their claims the chinese have begun rapidly constructing entirely new islands within the sea covered by naval and air bases bristling with the latest firepower while the united states has continued their own naval and air patrols despite all of the chinese warnings and while on the surface it may appear that china's territorial claims here in this sea are overly ambitious ridiculous or even reckless their claim is in fact rooted in beijing's own fear of the single greatest geopolitical weakness that plagues all of the strategic thinking of the modern chinese state a weakness that is so enormous it could potentially end up destroying the entire country if it ever becomes properly exploited and yet so small that it only stretches one and a half miles wide it is essentially china's equivalent to the death star's exhaust port and it is located right here the strait of malacca the strategic gate between the pacific and indian oceans between the malay peninsula in the north and the indonesian island of sumatra in the south this natural choke point is geographically the shortest possible path for container and cargo vessels traveling by sea to take while traveling between europe the middle east and africa on one side and east asia over on the other as a result around three and a half trillion dollars worth of global trade passes through these gates and across the sea lanes of the south china sea every single year including an overwhelming two-thirds of china's entire maritime trade volume 40 of nearby japan's entire maritime trade and nearly one-third of the total volume of all worldwide trade but perhaps most critically for you to understand is that these flows of trade usually also include around 15 million barrels of oil a day and around one third of all the world's traded liquefied natural gas or lng china and japan the world's second and third largest global economies respectively each rely on this single strait for a whopping eighty percent of all their imports of oil primarily coming in from iran and the arab states around the oil-rich persian gulf imports that are especially critical for china as imported oil from abroad makes up 75 of china's entire oil consumption which ultimately means that roughly 60 of china's entire supply of oil passes through just these one and a half miles but china is heavily reliant on this choke point not only because of the energy resources they import through it but because of the massive volumes of manufactured goods that they also export through it as well to europe exports that largely prop up the very foundation of the modern chinese economy these realities lead to a rather obvious problem if the strait of malacca at only one and a half miles wide at the narrowest point were to somehow become obstructed or blocked for a significant amount of time china's entire economy and society would essentially collapse if given a long enough time this is because there simply aren't really any good enough geographic alternatives for china's energy imports and manufactured exports to travel through any other possible maritime trade routes getting to and from the chinese east coast would have to re-route around sumatra and either pass through any of the number of other easily blockadable chokepoints through the thousands of islands in the indonesian archipelago or pass along the long open ocean route around the southern side of australia this is why back in 2003 just months after the united states invaded the very oil rich nation of iraq the chinese president of the time hu jintao warned what he called china's melaka dilemma the risk of what he referred to as certain hostile foreign powers like the united states india australia or others could blockade malacca and easily sever china's critical lifelines of energy and strangle beijing and thus china's domination over the south china sea pushing china's influence directly to the strait of malacca itself became of imperative importance to beijing's own national security but fascinatingly it didn't always used to be like this because china's current crippling dependence on importing energy from abroad and relying so heavily on the strait of malacca is a fairly recent development historically after all china is actually in fact one of the world's largest producers of oil domestically they are the sixth largest oil producer in the world today and roughly equivalent to iraq with many very large reserves scattered across their northwest northeast and immediately offshore back in the 1970s and 80s china used these big reserves to not only be completely oil self-sufficient but to actually even become an oil exporting nation primarily to the japanese who have basically zero domestic oil reserves of their own and have always been a massive oil importer for their entire modern history as a result but back at this time the chinese economy was absurdly tiny compared to what it is today accounting for only 1.6 of the entire global economy as recently as just 1987. but beginning in the mid-1980s china's economy began to experience the era of incredibly explosive and rapid growth and with that growth came an ever increasingly hungry economy for more and more energy to continue sustaining and growing it and by 1993 china crossed a historic turning point that it would never cross back from right up until the present day their domestic oil production while large was not large enough to keep up with their economy's growing demand and they had to start importing oil from abroad for the first time in modern history as china's economy continued to keep seeing meteoric growth year after year and the hunger for energy continued increasing alongside of it china suddenly became the world's largest consumer of energy by 2009 the second largest importer of petroleum behind the united states in 2011 and then even surpassed the us to become the new number one largest importer of petroleum by 2016 and then overtook japan to become the world's largest importer of lng just last year in 2021 now these days despite having the world's sixth largest amount of oil reserves domestic oil production only meets the demand for 20 of china's 1.4 billion person economy and that means that china imports around 80 percent of all of its oil the vast majority of its natural gas and consumes about 25 of all the energy used by humanity but unlike the countries who make up the west china's mixture of energy use is rather different because the vast majority of china's energy consumption continues to be overwhelmingly based on coal and for very logical reasons from china's own national security perspective because comparatively to oil or gas china actually possesses enormous amounts of coal roughly 13 of all the coal in the world in fact coal is therefore in general a reliable and stable source of energy that china can tap into directly without the need for relying on geopolitically complicated imports and so coal represents around 60 percent of all the energy that china currently consumes oil ranks second at just 20 percent natural gas in a distant third at just six percent while alternatives like nuclear and renewables make up the remaining combined fourteen percent this essentially means that with eighty percent of oil imported in nearly all natural gas imported china must rely on imports to meet more than one-fifth of their entire energy consumption and most of all of that comes from just a single place the persian gulf the planet's largest concentration of hydrocarbon resources like oil and gas ever discovered a quarter of the world's oil and 35 of the world's natural gas reserves exist around its shores separated from the chinese east coast not by one but two major geopolitical choke points the strait of hormuz that separates the gulf from the indian ocean and the strait of malacca that separates the indian ocean from the pacific ocean eighty percent of china's imported hydrocarbon supplies come from here and pass through both of these choke points either of which could theoretically be strangled by the american navy during a time of war which is an important factor for chinese military strategists to consider when contemplating beijing's long-time ultimate foreign policy objective the subjugation of taiwan beneath beijing's direct rule the long-standing policy coming from beijing is that taiwan is not an independent country but merely a rebellious province of china taiwan of course for all intents and purposes truly is a de facto independent country in nearly every conceivable way except for name and that's because beijing has been incredibly explicit for years now that if taiwan were to ever formally make a move towards an outright declaration of independence separating itself from china beijing would unconditionally utilize military force and even go to war to prevent it from happening beijing knows that if the time ever comes when diplomacy has failed and they mobilize for war and an invasion of taiwan across the taiwan strait it would likely also mean going to war against taiwan's greatest defender and supporter the united states in that event the american navy would be almost certain to at least attempt a blockade of the malacca strait in order to starve china's military and society out of their critical supplies of fuel militaries run on oil and under this scenario with 80 percent of china's oil imports suddenly blockaded the clock would begin to tick for beijing china controls one of the largest strategic reserves of petroleum on the planet but even that has only enough when at full capacity to based on estimates last their entire normal consumption rate for only around 90 days if they haven't achieved their objectives in taiwan and the americans are still keeping up the blockade of malacca after those 90 days or so are up then the chinese will begin being forced to dramatically ration their fuel supplies and massively divert civilian resources over to the war effort this ultimately means that on day one of a blockade of malacca situation beijing gets left with really only two options give in to the american demands for peace immediately and withdraw from their invasion in exchange for opening back up their supply lines or dramatically expand the scope of the war and attack the american navy directly in an attempt to break the blockade or even almost unthinkably attack the american navy first before the invasion of taiwan even begins in order to deliver a crippling blow before they could enact the blockade this 21st century situation rhymes eerily with that of the united states in japan in the previous century in august of 1941 america who at the time supplied some 80 of the oil to the japanese empire slapped an embargo on their supply leaving the japanese with almost the exact same two choices that could be left to china this century and against all the conventional wisdom of the time within the west japan ultimately chose the latter and seemingly more insane option by dramatically expanding the scope of the war and attacking the american navy in a preemptive strike at pearl harbor and the result was a brutal four-year-long total war across the pacific that ended in two nuclear strikes today it's a chilling thought to consider how a similar and logical series of events could end up playing out again in the pacific and in the 21st century the united states is far from alone in their opposition to beijing there is also the quadrilateral security dialogue or the quad for short the sort of security alliance between the united states japan india and australia that beijing derides as the asian version of nato and then there is also the aucus the trilateral security pact between australia the united kingdom and the united states for mutual defense policy in the indo-pacific that is helping australia acquire crucially important nuclear-powered submarines were china to attack taiwan or the american navy and enter into war with the united states it would also most likely mean a greater conflict with the other quad and occus members of japan india australia and the united kingdom as well who all share a mutual interest in containing beijing and who all combined have a significantly more powerful and capable group of navies that could likely overwhelm china's in the indo-pacific and undermine all of china's objectives therefore being well aware of this enormous problem now for decades the chinese have been taking tremendous steps to make sure that they can overcome it by any and all means necessary the first and most obvious way has been to dramatically expand the power budget and capabilities of the chinese navy in order to more directly compete at sea with the fleets of the quad and occus allies within the past 20 years the chinese military budget has exploded by more than six fold using the latest comparative numbers the chinese military budget is now at around 240 billion dollars a year more than what the soviet union spent on their military at the height of the cold war in the late 1980s even when adjusted for inflation today while the united states spends more than three times them at around 850 billion dollars a year or around 70 percent of what they were spending back during the cold war when adjusted for inflation worldwide china and the united states alone represent roughly half of all global military spending and china is continuously narrowing this gap by the end of this year the chinese navy is expected to possess four aircraft carriers and they plan to have five by next year compared to america's 20. this naval arms race between the reigning great power the united states and the rising one china contains another eerily haunting historical rhyme the naval arms race of the early 20th century for battleships between the reigning great power britain and the rising one germany germany's economy finally overtook britons in 1910 after decades of continuously rising and catching up and then four years later saw the outbreak of the first world war between them at the same time the chinese possessed the advantage of geographic proximity to the most major theaters of any future potential conflict america's most significant indo-pacific bases are far away from malacca and the south china sea at diego garcia guam okinawa pearl harbor and the united states west coast whereas china has been investing aggressively into numerous naval and air bases built out of nothing across the tiny coral atolls within the south china sea itself giving their ships and planes proximity to both the malacca and taiwan straits going back to the beginning of this video again this is why china seems so aggressive in enforcing their ambitious territorial claims to the south china sea by building up all of these island bases to safeguard their access to the malacca straight and to ensure that their own critical import and export sea lanes remain open even during a major international crisis if that means inflaming relations with vietnam the philippines malaysia and brunei then so be it from beijing's perspective it's a calculated price that they're willing to pay for the greater security of the state but perhaps the biggest way that beijing is attempting to overcome their malacca dilemma is not through increased naval power but through increased methods of getting their energy into the country from abroad for thousands of years now goods have traveled across the eurasian continent between china and the west through vast expanses of mountains deserts and steps across what is known as the silk road it was through this ancient trade route that chinese inventions like paper and gunpowder made their way westwards and now in the modern 21st century the chinese are attempting to revive this same idea of the ancient silk road of the past for beijing's energy transportation and export needs in the present and they call it the belt and road initiative or bri with a total potential investment of around 1.4 trillion dollars an amount of investment that is more than seven times larger even when adjusted for inflation than america's investment into europe through the marshall plan at the end of the second world war by constructing pipelines that transport energy from other countries into china and railroads and highways that transport manufactured exports out from china to other countries all traveling over land beijing can strategically work towards overcoming their dependency on the malacca strait and the risk posed to it by the american navy central asia immediately to the west of china is an area of critical importance to the chinese today because they have some of the most enormous reserves of natural gas and oil ever discovered around the basin of the caspian sea the first ever oil pipeline over land that flowed into china was built here only in 2009. from kazakhstan's oil-rich shore on the caspian running through china's westernmost shinshong province it is capable of supplying 10 million tons of oil a year to china now and it was only the first in the very same year a natural gas pipeline was constructed beginning in the massive gas fields of turkmenistan the sixth largest in the world and nearly double all of the gas reserves of china and leading directly to china through xinjiang as well today this pipeline enables gas from turkmenistan to be shipped 7 000 kilometers away over land to power homes and factories in shanghai an entire half of all the gas that turkmenistan exports abroad now flows through this single pipeline towards china but these energy projects in central asia have become slightly problematic with russia the nation who has long considered central asia to be within their own sphere of influence more and more of central asia's abundant reserves of energy are flowing through chinese majority-owned pipelines towards china and less is flowing through russian-owned pipelines towards moscow's traditional market in europe but russia is having to accept the increasing chinese influence in central asia because china is also rapidly becoming the new largest market for russia's own massive supplies of energy as well russia with by far the largest reserves of natural gas in the world and the second largest producer of oil in the world is one of the world's energy superpowers and is located directly next door to china the world's largest consumer of basically all forms of energy a relationship between moscow selling energy and beijing buying it was almost always going to be inevitable simply based on both nations geography and geology and sure enough it's been really starting to kick off just three years ago in 2019 the russians completed their first natural gas pipeline into china the power of siberia which links their large chaiyanda field directly to manchuria and many more are being built as we speak a power of siberia 2 pipeline has already been proposed that would pass through xinjiang and connect china with the same massive gas fields in the euros region that currently supplies natural gas to europe and would double russian gas exports to china all on its own a third pipeline is also currently in the works that would connect china with russia's other large gas fields in sakhalin in total russia expects to be able to provide china with over 100 billion cubic meters of gas per year through these pipelines which is currently about half of china's entire imports of gas but it's not just pipelines that the russians are building to sell gas to china either both sides of this relationship are also investing heavily into liquefied natural gas or lng far in the north of the eurasian continent in the yama peninsula is russia's first and largest lng plant and when fully operational will be supposedly capable of producing 16 and a half million tons of lng per year it is considered to be the crown jewel of the northern sea route the other maritime component of china's ambition to rid itself of its malacca dilemma this is a trade route that extends from the pacific ocean through the arctic waters within the exclusive economic zone of russia and then into the north sea and the northern atlantic currently parts of this trade route are only free of ice for a couple months out of the year and the maritime traffic through it is usually pretty small but in the future with climate change and warming arctic temperatures studies have suggested that this entire passage may be completely ice free as early as next decade in the 2030s and large-scale shipping across it may become economically viable by 2040. this new geographic reality will forever alter the world of trade and specifically help to solve china's melaka dilemma when the northern sea route is navigable year round it means enormous volumes of ships carrying lng from russia's yama peninsula across it to china's east coast and it means even more enormous volumes of cargo ships taking china's manufactured exports to europe and north america a route that in both instances will completely circumvent malacca and dramatically expand the flexibility of china's foreign policy options and probably enable them to become significantly more aggressive towards taiwan this relationship based on energy is the reason why china and russia appear to be so friendly with each other and why they each announced in february mere weeks before the russian invasion of ukraine that their friendship had no limits with the west cutting their oil and gas purchases from russia after the invasion the russians are seeking new more eager customers to sell their energy to and the chinese desperate to continue reducing their over dependency on malacca for their own energy imports and their high rates of lng imports from quad allies like australia and the united states are all too eager of a customer and it just so happens that both beijing and moscow are at the moment firmly united in their opposition to the united states in the west and therefore beijing will never ever condemn the russian invasion of ukraine and if anything will even tacitly support it they need the russians just like the russians need the chinese but that doesn't mean that beijing has stopped their search for even more energy imports another set of pipelines completed in 2013 and 2014 beginning at the deepwater port of kiyokpu in myanmar and transports large volumes of oil and gas across that country to the chinese city of kunming and then on the other side of india is pakistan one of beijing's greatest allies and supporters which again revolves around energy and geopolitics pakistan is by far to date the single largest recipient of china's belt and road investments amounting to a total of 62 billion dollars and including the establishment of the strategic port of gwadar located nearby to the strait of hormuz and the persian gulf a port that could hypothetically become a very important stopping point for the chinese navy the chinese have proposed the construction of yet another oil pipeline from here that would transport oil directly to kashgar in china's own xinjiang province but this has proved to be so far a bit too logistically difficult the geography that this pipeline would have to pass through includes the towering himalayas with sharply steep valleys mighty waterfalls and glaciers and the occasional earthquake to boot and freezing temperatures so while the construction of a pipeline here has so far never been accomplished they have instead had a tremendous effort constructed one of the highest paved highways in the world the karakoram highway this way at least trucks carrying fuel and exports can travel between mainland china and the chinese invested port at wadar and continued diverting some amounts of supplies around malacca from beijing's perspective in 2019 pakistan went to the international monetary fund for its 12th national bailout since just the late 1980s which critics have pointed out hands a ton of economic leverage to the chinese who invested heavily into the port at gwadar when a nation like pakistan can no longer make their debt repayments it means that chinese entities who lent them the money could hypothetically take control of assets such a thing already happened in another country nearby to india sri lanka and specifically the port of hamantota for which beijing provided over one billion dollars in loans to construct in exchange for the cancellation of that debt the sri lankan government granted a state-owned chinese company a 99-year long lease to it under intense pressure from india the sri lankan government made the chinese promise to not use hambantota for military purposes but 99 years is a very long time for something as simple as a promise should similar fates befall kyoku and gwadar the chinese would have four ports on the indian ocean when factoring in their official military base on the western edge of it in djibouti all located nearby to the world's most strategic maritime choke points at mandeb between the red sea and the indian ocean hormuz between the persian gulf and the indian ocean and the polk strait between india and sri lanka this has led to many geopolitical thinkers within india fearing that china is beginning to effectively surround them and from beijing's perspective containing india a member of the quad alongside the united states japan and australia is of a very high strategic value in the event of a great naval war across the indo-pacific china's relationship with pakistan could hypothetically force india into fighting a two-front war and the ports that surround india might ideally keep the indian navy well-contained and absent from the fight over the much more important bodies of water around taiwan the south china sea and malacca but the key space on the board of eurasia for china's overall grand 21st century strategy to end their malacca dilemma is almost certainly their own province of xinjiang in the northwest this single province accounts for around 20 percent of china's entire domestic reserves of energy with massive sources of oil gas and coal littered across it that ranks xinjiang first in all of china's provinces for fossil fuel reserves the terran basin alone inside of the province is the largest single oil and gas bearing area in all of china but expanding beyond these domestic reserves china also has a very very specific security interest in the neighboring oil and gas rich central asia immediately to the west of xinjiang xinjiang shares the only de facto border that the chinese have with pakistan one of their staunchest allies which enables the continuous karakoram highway towards the port of gwadar near to the strait of hormuz xinjiang also borders afghanistan tajikistan and kyrgyzstan and as a result many of the most significant oil and gas pipelines coming into china from russia kazakhstan and turkmenistan all have to traverse significant distances over xinjiang before reaching china's heavily industrialized and populated areas in the east china needs to control xinjiang at all costs in order to ensure that they keep these vital routes open that help them maneuver around malacca their greatest geostrategic vulnerability but of course xinjiang is also traditionally the home of the ethnic uyghurs and not the han chinese who make up the vast majority of china's overall population in order to secure xinjiang within beijing's orbit and geopolitical strategy forever the chinese regime has begun to carry out a genocide of unbelievable proportions against the indigenous uyghurs who live here something that really hasn't been seen anywhere in our world since the holocaust of the 1940s this 21st century holocaust of the millions of uyghurs living inside of xinjiang has been methodically carried out by the chinese regime for the past five years now since 2017 and is still on going with at least a million human beings still locked away within hundreds of concentration camps dotted across the region china's ongoing genocide of the uyghurs inside of xinjiang is perhaps the darkest chapter of 21st century history so far and it is directly related to everything that you just listened to me talk about throughout this entire video but unfortunately if i made a video covering this darker side of china's geopolitical energy crisis the disturbing violent and controversial details of discussing what is an ongoing genocide would cause the video to become demonetized and age restricted which i completely understand and honestly don't care about but it ultimately means that youtube's algorithm would never promote the video to you and there's simply no way that you'd probably ever see it here that's why instead i created yet another full-length companion video to this one in my ongoing modern conflict series that's about the same length as this video that covers the entire course and explanation into china's genocide of the uyghur people inside of xinjiang and uploaded it directly to nebula which as you've probably already heard by now is home to tons of exclusive ad-free content like my entire modern conflict series with 15 other full-length videos containing more than five hours worth of additional combined content that you can go and watch right now covering recent major wars and conflicts that'll help you stay up to date on what's going on in our world and why from this video covering all the events leading up to russia's invasion of ukraine to this one covering the russian invasion of georgia this one covering the u.s iran conflict and many more of course the reason why all of these videos are only available on nebula is because they just wouldn't ever work here on youtube and would never be able to be viewed because of the way this site works in relation to highly controversial and sensitive recent events but on the other hand nebula is a totally different platform without an 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Channel: RealLifeLore

Views: 5,113,108

Keywords: real life lore, real life lore maps, real life lore geography, real life maps, world map, world map is wrong, world map with countries, world map real size, map of the world, world geography, geography, geography (field of study), facts you didn’t know

Id: ISHHe1Hu6d4

Length: 39min 26sec (2366 seconds)

Published: Sat Jul 30 2022

Reddit Comments

[u/Kahless12]

For a deeper dive into China's problems, I would recommend Peter Zeihan's books (China is just one of the things he talks about though). I suspect this video was influenced by his work.