China’s Purchases and Investments In US Energy Are On Their Terms

Wind Farm in West Texas       Photo: Jerry Lara, San Antonio Express-News

President Trump trumpeted his trade deal with China, but so far its energy provisions have been a bust, according to The Wall Street Journal. The Chinese have not purchased nearly the amount of energy (in terms of total dollars) as they promised — only $2B in oil and gas purchases against a commitment of $25B for this year.  Clearly market prices dropped due to the coronavirus, but China’s energy purchases lag behind those of agriculture and manufactured products.  At the same time, Chinese businesses are jumping into the renewable energy industry here in the U.S., developing projects even deep in the heart of Texas.

Why This Matters:  Trump’s energy policy is a colossal failure, especially when measured against his outlandish campaign promise of complete energy independence.  Yes, the U.S. is now a net exporter, but that trend was underway before Trump took office.  Even the gas industry admits the export goals Trump set were “too aggressive” — they left our domestic fossil fuel industry particularly vulnerable to price shocks. Instead of using government funds to back fossil fuels, Trump should have been supporting the development of our growing domestic renewable energy industry.  The Chinese recognized U.S. solar and wind as a great investment and stepped into the void. They are beating us at our own game – it’s hardly energy independence.

The Trade Deal Energy Debacle

One of the key problems with the deal was that the U.S. agreed to targets in dollars, which means that the price drop made the financial targets very hard to achieve. Now Republicans and oil and gas execs are urging the President to push China to keep their promises and buy more from us — rather than the Saudis and Russia.  This is a lose-lose proposition given climate change.  China, as the largest greenhouse gas emitter and should be pushed to lower its imports of fossil fuels and cut its overall consumption.

Wind Farm in South Texas

At the same time, a Chinese billionaire’s ambitions to scale up a large wind (and possibly solar) farm in southwest Texas is ringing alarm bells with local conservationists and the nearby Laughlin Air Force Base, a military training installation.  The Trump administration has approved China’s ownership of this energy facility — something they might have blocked — despite the energy trade deal promises broken and the clear concerns of the military.  The lack of regulatory structure in the state of Texas means that no other approvals are currently needed.  Environmental groups are concerned about its construction adjacent to sensitive riverine areas that support a small local outdoor tourism industry.  Apparently, according to the San Antonio Express-News, a right-wing media commentator denounced the wind farm as a national security issue and Foreign Policy magazine did a story on the rift the wind farm development is causing between the President and Texas Republicans in Congress.  The head of the state of Texas’ Parks and Wildlife Department, Carter Smith, wants to protect the region.  “The Lower Pecos and Devils River country represents one of the last true bastions of wilderness in our state,” he told the Express-News.

To Go Deeper: Read the whole TX story in Foreign Policy.

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