(U.S.) Blood For (Chinese) Oil

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OIl could begin flowing out of Afghanistan in 2012

The U.S. has spent a decade, $500 billion and 1,863 lives trying to square away Afghanistan. Yet China – which has done nothing in the past 10 years to bring stability to that troubled land – has just become the first foreign country to ink a pact with the Afghan government to try to tap into its oil and gas reserves. It could be worth billions.

Not sure the notion of the U.S. making the world safe for U.S. oil drilling makes sense, or is wise politically. But there is something unsettling about the world’s most populous nation sitting on the sidelines, waiting for the IED-triggered dust to settle, then swooping in to stake its claim on soil soaked in American blood.

On the positive side, oil revenues could reduce Afghanistan’s need for foreign aid, which now accounts for something like 90% of its economic activity (minus narcotics, of course). Anything that diversifies Afghanistan’s economy is good. And oil is fungible – if China pumps oil from its Afghan fields, that means a corresponding reduction in demand for the rest of the globe’s petroleum. China has also signed a deal to begin mining Afghan copper.

Nonetheless, one is left to wonder: which nation is getting more out of Afghanistan? Something tells me it’s not the nation that’s getting out of Afghanistan.