China is dealing with significant energy security challenges, some of which are similar to those in the United States, and others of which are very different. Perhaps the greatest concern in China is power generation. In order to continue supporting a rapidly growing economy and job creation, the PRC’s highest priority is simply to keep the lights on. While it will use some renewable energy sources to do so, it is clear that any resource that helps keep power flowing will be utilized, particularly coal.
China, like the United States, is also concerned about oil dependence. Its methods for dealing with this challenge, however, are somewhat different from those in the West. China, through an aggressive program of mergers and acquisitions, is dedicated to controlling entire supply chains of vital resources, including oil.
This is relevant to the United States for multiple reasons. At the most basic level, as the world’s second-largest energy consumer, virtually anything China does in the energy world can affect other nations. More specifically, by creating isolated oil supply lines, China is effectively taking oil off of the global market, which can have a direct impact on other consuming nations, including the United States.
Because of the risk that some potential Chinese approaches to energy security may pose to U.S. energy security, policymakers may want to consider engaging more vigorously in developing an energy security dialogue with China and drawing China into existing global energy institutions, like the International Energy Agency.