The Axis of Oil: How China and Russia are using state-owned oil companies to constrain and eventually defeat American power

This is a must-read Weekly Standard article by Irwin Stelzer . Excerpt:

SO PICTURE THIS WEB OF INFLUENCE that is being woven by countries eager to constrain American power. Canada and China become joint venturers, as do Venezuela and China. Canada is America's largest source of imported oil, and Venezuela sells us the light, sweet crude oil that our refineries are best equipped to handle. This means that a significant portion of the incremental production from these countries--and perhaps some of what is now headed here--goes to China, rather than to the United States, as energy planners here have been assuming. More important, no one believes that these deals are strictly economic, or would meet shareholder approval were such a force present in China. These are deals by state agencies, designed to extend China's influence to corners of the world from which it has until now been absent.

China has also solidified relations with Iran and other countries on America's list of international pariahs, trading arms for oil, and using its financial clout to establish close diplomatic ties in the region that contains the largest reserves of oil and gas in the world.

Meanwhile, Russia is using its reserves to dominate the European energy market, and make Germany, France, and other countries heavily dependent on Putin's good will. Not that he would cut off supplies at the slightest provocation. He doesn't have to. All the Russian "dyed-in-the-wool democrat" has to do is rely on German and French self-interest to tip those countries to his side in any dispute with the United States, just as China can rely on Latin American countries that benefit from its billions of investment to give that fact some weight in formulating their foreign policies.

Add the emerging relationship of China and Russia, and you have something to worry about. But not, it seems, if you are in the Bush administration. The president has nominated Samuel Bodman as his second-term secretary of energy. Bodman is no doubt an estimable executive, but his only prior experience in energy markets came when he gassed up his car. Besides, his main assignment, other than tending to the security of our nuclear facilities, is to push the president's energy bill through Congress. And that bill contains no realistic provision to reduce American dependence on oil imports. Bush will use legislation that cannot be filibustered in an attempt to win his fight to open the Arctic National Wildlife Refuge (ANWR) to drilling, but even if he succeeds--which is doubtful--he will have added perhaps one million barrels per day to domestic supplies some two decades hence, by which time the Energy Information Administration estimates that oil consumption in America will be over 20 million barrels per day, of which over 15 million barrels will be imported. ANWR oil may some day come to more than a drop in the bucket, but it won't be enough to change the geopolitical consequences of American dependence on imports. Unless Bush's new coolness to the Saudi regime is accompanied by other policies to reduce the dependence that prompted FDR to strike a bargain with Ibn Saud in the first place, the president may wish he had limited the scope of his endorsement of democratic reform to countries that don't have any, or at least not much, oil under their soil. If we fail to reduce our reliance on oil, we will be obliged by economic self-interest to defend the Saudi royal family if--more likely, when--its control over some 25 percent of the world's oil reserves comes under assault.

I highly recommend this read.