Numerous Chinese cities go through what is now dubbed an “airpocalypse” mainly due to the explosion of coal plants and transport by cars.
In the meantime, Russia is renewing and expanding its network of oil and gas pipelines toward China.
Meanwhile, the Arctic and subarctic region is going through a major atmospheric warming of more than 4° in less than a century, which makes it increasingly more attractive to industrial investment, especially because the Arctic could contain more than 13% of the world’s undiscovered oil and 30% of the undiscovered gas reserves, as well as other important mineral deposits and fishing potential (Arthur Guschin, “Understanding China’s Arctic policy“, Le diplomate, November 14, 2013).
The warming and melting of the region could turn these deposits into extractable resources (“The Arctic Death Spiral”, Arctic News, July 2013).
These three situations are interconnected and are affecting basic international strategic equilibria.
As we saw in “Arctic Fusion: Russia and China convergent strategies” (Valantin, La société d'analyse rouge (Team), June 23, 2014), the two Eurasian giants are elaborating common industrial, energy and shipping strategy in order to develop the Arctic region. However, this “great convergence” goes beyond their “simple” economic development: the stake is also the Chinese energy transition.
The coal nation?
In effect, China’s economic and social development rests upon the way it produces energy for its population, its booming cities, and its industry. 75% of China’s electricity production is coal-based. China produces 46% of the global coal production, and represents 49% of the global coal consumption. The domestic development of China depends of coal, its consumption having increased by 2.3 billion tons in ten years (Joseph Ayoub, “La Chine produit et consomme presque autant de charbon que le reste du monde réuni”, Aujourd'hui dans Énergie, US Energy Information Administration, May 14, 2014).
It makes China the first emitter of greenhouse gases, being responsible for 30% of global emissions (Craig Simons, The Devouring Dragon, How China’s Rise Threatens our Natural World, 2013).
It must be kept in mind that China is part of the contemporary global trend of urban growth. In 2012, the Chinese urban population started to exceed the rural population when it reached almost 691 million people, on a total of 1300 million people (Jaime A. Forcluz, “China’s Urban explosion: a 21st Century Challenge”, CNN, 20 January 2012). In other terms, contemporary Chinese social, urban, economic and political organization and development is based on coal.
However, this situation is turning the Chinese boom into a domestic and global social-environmental deadly trap. Coal atmospheric rejects are polluting the air, to the point that it endangers the health condition and daily life of hundreds of millions of Chinese citizens. Indeed, each year, 350 000 to 500 000 people could be dying prematurely because of air pollution, while the number of ailments, especially among children is growing quickly (Malcolm Moore, “China’s “Airpocalypse” kill 350,000 to 500,000 each Year”, Le télégraphe, 07 January 2014)).
In the same time, some Chinese scientists are now comparing the permanent smog to the “consequences of a nuclear winter”: coal dust adheres and thus makes opaque greenhouse surfaces, diminishing by 50% the amount of sunlight received and needed by the growing vegetables, which could threaten the food and health security of the country (Jonathan Kaiman, “China’s toxic air pollution resembles nuclear winter, say scientists“, Le Gardien, 25 February 2014). Meanwhile, it turns the Middle Kingdom into one of the main drivers of climate change (Simons, Ibid).
At the political level, the Chinese political authorities inherit a five thousand years old tradition according to which legitimacy emanates from the “Mandate of Heaven”, and which most probably still operate today, under new forms (Loretta Napoleoni, Maonomics, 2011).
If the population discerns signs that the government has lost the Mandate, it ceases to see the government as legitimate and vast social and political unrest and extremely violent upheaval may follow (John King Fairbank and Merle Goldman, China: A New History, 2006). In other terms, the Chinese political authorities need today to protect their population from the permanent pollution-related countrywide airborne chemical attack that it now suffers, because it may be perceived as a sign that the Mandate of Heaven is lost:
“Towards the close of each regime, for example, natural calamities, earthquakes, floods, comets, eclipses, and other heavenly portents become more numerous in the record, evidence that the improper conduct of the ruler was losing him the Mandate of Heaven” (Fairbank & Goldman, Ibid: 48).
This perception of legitimacy may have contributed to the Chinese central government’s vigorous efforts in addressing the twin challenge of cleaning the air and reducing the Chinese greenhouse gas emissions over the last few years (Paul Joffe, Geoffrey Henderson, “Taking Stronger Action on Climate Change: China and the United States”, China FAQs The Network for Climate and Energy Information, The World Resources Institute, 16 November, 2014)
For China, the only way to clean the air is to regulate the number of cars and to very significantly decrease the use of coal. To achieve that, the Chinese energy industry needs to access other fuels in order to maintain the economic growth of the Middle Kingdom while depolluting the air.
President Xi Jinping announced very ambitious goals about the decrease of coal use, and the development of renewable energies, which could reach 20% of China’s energy production in 2030, at the APEC summit in Beijing, as part of a US-China deal on climate change (Office of the press Secretary, “FACT SHEET: U.S.-China Joint Announcement on Climate Change and Clean Energy Cooperation », The White House, November 11, 2014).
However, less polluting fuels must be found to change the gigantic park of coal plants (“China’s Long Farewell to Coal”, Deutsche Welle, 15 December 2014), especially natural gas and oil, which emit less greenhouse gas and other pollutants than coal. Thus, on 26 May 2014, the Russian and Chinese governments signed an energy agreement, according to which Beijing agreed to pay 400 billion dollars during the next thirty years for Russian natural gas (Ding Ying, “A Gas bond, energy cooperation will serve as a new link between China and Russia“, Le Revue de Pékin, 22 May, 2014).
Russia agreed to have their giant State company Gazprom supply the China National Petroleum Company with 1.3 trillion of cubic feet of gas a year, during the next thirty years, which amounts to about a quarter of the current Chinese gas consumption. Gazprom and its partners will invest 55 billion dollars, while their Chinese counterparts will invest 20 billion dollars to build the needed pipeline, which will link northeast China to western Siberia (Marin Katusa, The Colder War, How the Global Energy Trade Slipped from America’s Grasp, 2015).
This agreement was 11 years in the making, because of a long negotiation regarding the pricing structure.
The closing of the deal came at a moment politically important for both governments. For the government of President Vladimir Putin, the tensions with the West were heightening because of the situation in Ukraine and the economic sanctions that it triggered against Russia (Lavoix, “An Isolated Russia? Think again”, La société d'analyse rouge (Team), September 15, 2014). Meanwhile, for President Xi Jinping, it was a way to demonstrate to the government, to the Chinese Communist Party and to the Chinese population, his will to implement politics favouring better life conditions (Reuters, “China Economic Growth to be Sustainable: Xi Jinping”, 15 Nov 2014), while also probably to show, internationally, its ongoing support to Russia.
The signature of the deal took place only four months before the major joint declaration by President Xi Jinping and US President Barack Obama at the APEC summit in Beijing, announcing their resolve to diminish the carbon emissions of their respective countries, which, for China, clearly means to start its “long walk” away from coal.
The natural gas will begin to flow from Russia to China in 2018 or 2019 (Katusa, ibid). This huge deal, which opens the door to numerous others (“Record High Chinese Imports of Russian Oil in 2014”, Russia Today, January 23, 2015), has a very profound political meaning: each of the two giant and powerful countries rests upon the other in order to ensure its economic, political, and existential security and future.
It means that the legitimacy and the viability of the Russian government and of the Chinese government are now interlinked, and are both dependent on the success of the Chinese energy transition from coal to oil and gas. Thus, it will lead China to reach its “peak” emissions sooner, in a less polluting way, while preparing itself for another “post-oil” energy transition.
That is why it should not have been a surprise when the Chinese government declared, in November 2014, it would help Russia to protect and support the Ruble, badly affected by the western sanctions (Tomas Hirst, “The Russians Have Persuaded The Chinese To Bail Out Their Oil Industry”, Business Insider, November 13, 2014).
The Arctic Imperative
Climate change, driven by greenhouse gas emissions inherent to the use of oil and gas on a worldwide scale, is so profoundly and so deeply altering the Arctic, that the summer ice pack is said to have entered “the Arctic death spiral” (Joe Romm, “Arctic Death Spiral: CryoSat Reveals Decline In Arctic Sea Ice Volume Continues“, Progrès en matière de climat, September 11, 2013).
This massive geophysical change is the support of industrial, infrastructural, political and military development of the region by Russia, and of the emergence of the “Near Arctic nation” implemented by China with Iceland, Greenland, Denmark, Finland, Norway and Russia (Valantin, “The Chinese Shaping of the North”, La société d'analyse rouge (Team), 9 June 2014).
As the massive Siberian gas fields are nearing their peak production (Michael Klare, La course pour ce qui reste, 2012), new sources of gas must be found in order to, literally, ensure the future energy security of both countries, and, in particular, the heightening of electricity production by gas-powered plants in China.
In fact, the Russian commitment to ensure a large part of the Chinese current and future oil and gas supply gives a new meaning to the development projects for such giant gas fields as the Shtokman field, in the north of the Barents Sea, the Prirazlomonoye field, discovered in 1989, in the east of the Barents Sea (Fabienne Costadau, La Mer de Barents, un nouvel enjeu géostratégique, 2011), the Bovanenkovo field, close to the South-west coast of the Yamal Peninsula (Klare, ibid), and, since September 2014, the mammoth Universitetskaya, in the Kara Sea, north of Siberia. (This sub-sea structure, potentially, could contain reserves of oil and gas equal or superior to the Gulf of Mexico).
Furthermore, the Russian Arctic could now play such a key role in the domestic cohesion, energy transition and security of China, that it would contribute to further insure the support of China when or if the Russian situation and its Arctic influence were to be questioned.
The Russian and Chinese energy politics are changing the relationship between the economy, the atmosphere and strategy in an era of climate change and energy transition.
The world is shifting.
Dr Jean-Michel Valantin (PhD Paris) leads the Environment and Security Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defense sociology with a focus on environmental geostrategy.
Featured image: The Presidential Press and Information Office – President of Russia – Before the start of an official reception for the APEC economies’ leaders.November 10, 2014.