The Great Oil Race
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The great oil race:
Cheney discovers U.S. is losing out to China
Vice President Dick Cheney has been entrusted with a task regarded as vital to bolstering the Bush administrations sagging political popularity: the search for additional crude oil in order to help stabilize U.S. gasoline prices over the next few months.
Mr. Cheney was recently sent to Central Asia and other regions to coax allies to significantly increase supplies to stabilize U.S. gasoline prices for the summer. Administration sources said Mr. Cheney has run into significant difficulties as he has found that many of the potential suppliers have become committed to China.
“Were in a race with China and so far were losing,” an administration source familiar with Mr. Cheneys trip said.
During his visit to Washington in late April, the sources said, Chinese President Hu Jintao brusquely rejected President Bushs appeal to cooperate on energy resources to ensure global market stability. Later, Mr. Hu visited Nigeria, which supplies about 17 percent of U.S. oil imports.
The sources said Mr. Cheney, who has long-time contacts in the industry, has been designated to find oil supplies both for the short- and medium-term.
They said Mr. Cheneys visit to Central Asia was based on the assessment of the U.S. intelligence community that Middle East oil supplies will become increasingly precarious after 2008.
The administration has determined that gasoline prices will become a major issue in congressional elections in November. A May poll taken by AP and Ipsos reported that 23 percent of respondents approve of the presidents handling of gasoline prices, the lowest rate in the survey.
The sources said Mr. Cheney found his hosts in Central Asia to be distrustful of U.S. intentions, with some Muslim countries fearful of a regime change as that which took place in 2005 in Kyrgyzstan, regarded as the most pro-American country in the region.
Mr. Cheney also was informed of the contracts China has already signed with Central Asian republics. In April, Turkmenistan signed a deal to supply China with 30 billion cubic meters of gas per year from 2009 to 2039. The price has not yet been determined.
“Even if many analysts doubt Turkmenistans ability to meet this contract, that deal evokes the contradictions inherent in Chinas transitional phase,” the Washington-based Jamestown Foundation said in a report. “In its substance it evokes the old approach: China subsidizing dictators by paying for pipelines as well as for gas and trying to knock prices down while