Good News: Chinese Big Oil Surpasses America

Posted: Mar 29, 2012 4:05 PM

You need look no farther than the boomtown taking shape in North Dakota to understand the opportunities for employment, prosperity, and economic growth (not to mention tax revenue, if you're into that kind of thing) that can come from developing our own energy resources. Unfortunately for Americans everywhere, the Obama administration has made it clear that they'd rather not make anything easier for the hydrocarbon-energy pushers, and have systematically cut the oil industry off at the knees through regulations, scant permitting, etcetera. Worldwide demand for oil is booming, and we can take ourselves out of the game by disallowing us to take further advantage of our own wildly abundant resources -- limiting the abilities of existing companies to expand and discouraging new businesses from starting up -- but we can bet that that demand will undoubtedly be met by someone else. Farewell opportunity; hello, new world order:

NEW YORK (AP) — A big shift is happening in Big Oil: An American giant now ranks behind a Chinese upstart.

Exxon Mobil is no longer the world's biggest publicly traded producer of oil. For the first time, that distinction belongs to a 13-year-old Chinese company called PetroChina. The Beijing company was created by the Chinese government to secure more oil for that nation's booming economy.

PetroChina announced Thursday that it pumped 2.4 million barrels a day last year, surpassing Exxon by 100,000. The company has grown rapidly over the last decade by squeezing more from China's aging oil fields and outspending Western companies to acquire more petroleum reserves in places like Canada, Iraq and Qatar. It's motivated by a need to lock up as much oil as possible.

The company's output increased 3.3 percent in 2011 while Exxon's fell 5 percent. Exxon's oil production also fell behind Rosneft, the Russian energy company.

[Note: AP tries to spin this story to make it sound as if oil deposits are increasingly 'difficult to find,' and PetroChina outpacing Exxon is merely due to Exxon being more conservative in their investments and expansion, mentioning nothing about the bureaucratic struggles Exxon faces with the U.S. government. Yeahhh.... nice try, AP.]

I do not believe that China's gain is necessarily America's loss. That is the beautiful thing about free trade in a global market: it is not a zero-sum game. There's enough prosperity to go around for all of us, and when we engage in mutually beneficial buying and selling, everybody wins. However, in this scenario, we are not even letting ourselves compete for a market share -- we're simply saying no to jobs, growth, and economic opportunity.

I tend toward the school of rational optimism -- and I actually think that, over the coming years, worldwide oil prices are likely to decline: our 'finite oil reserves' just keeping getting bigger, and we'll continue to innovate and increase our technological efficiency. But if we're forcing ourselves to fit into some self-punishing, backwards-environmentalist vision of how the world should operate, we'll be stuck with relatively stunted economic growth for a long time to come.