The Strategic Imperative for the U.S. Senate to Pass an Effective Energy Bill

When China Strategies LLC first published the China Renewable Energy and Sustainable Development Report in 2007, we noted with interest one online publication that “borrowed” our work: the Iran Daily.  The Iran Daily’s interest in our reports on China’s burgeoning renewable energy industry was an early hint of the crucial connection between China’s energy conundrum and the United States’ concern about Iran’s evident aspirations to build a nuclear weapon. The link between energy sustainability and self-sufficiency in China and the success or failure of the U.S. government in preventing Iran from gaining nuclear weapons’ capacity is now crystal clear.

With the dramatic announcement by Presidents Obama and Sarkozy and Prime Minister Brown on the morning of the final day of the G20 meetings in Pittsburgh, that Iran was building a secret and previously undeclared nuclear enrichment facility buried deep within a mountain near the holy city of Qum, the hollowness of the two most cited options for a U.S. response to Iran — military action and direct negotiations — was exposed.

If the U.S. is to exercise the only realistic option it currently possesses to divert Iran from its ambition to build nuclear weapons — international sanctions — it must demonstrate to China its commitment to the construction of the world’s new energy future, a future where Middle Eastern oil is a footnote.

Delivering on that commitment will be the most effective way for the U.S. to enlist China’s support in neutralizing the threat posed by Iran’s pursuit of nuclear weapons. In the long term, building a new energy infrastructure will marginalize Iran and other nations whose oil wealth permits them to flaunt the will of the community of nations. 

If the U.S. is able to demonstrate to China that it is truly dedicated to leading the transformation of the new energy economy, China may become less bound by its economic interests in Iran, freeing it to join with the U.S. in confronting Iran’s nuclear ambitions. 

So long as China remains skeptical of U.S. commitment to proceed aggressively into a new energy future, however, China will continue to be a lukewarm supporter of sanctions that the U.S. may seek to impose on Iran. And while the Obama administration has put in place a host of admirable policies that cumulatively make a strong statement about the Administration’s determination to forge a new energy future, so long as the Senate of the United States fails to pass an effective energy bill, as the House of Representatives did earlier this year, China rightly will continue to question U.S. commitment to renewable energy.

While the U.S. fails to demonstrate its resolve to fashion a future where energy is no longer synonymous with Middle Eastern oil, we should expect a tepid response from China to our entreaties for joint action to impose sanctions on Iran. 

There is a great deal of irony in the fact that in order to gain Chinese support in confronting Iran, the U.S. must demonstrate the same degree of fortitude on energy issues that China has already displayed to the world.

As we have shown repeatedly over the last few years through articles on China’s progress in solar, wind, biofuels, electric vehicles and the smart grid, China is now more proactive than the U.S. in building a new energy infrastructure.  China is moving aggressively right now towards a wide range of alternative sources of energy and the means of delivering the power that China will require to continue its remarkable economic development, free of the impetuousness of international energy markets.

Indeed in recent weeks, citing Western media reports, China has touted itself as being poised to be the “pacesetter” in the race to attain sustainability in energy consumption, limit carbon emissions and foster GDP growth.   

China is committed to a green leap forward because it understands that the next stage in its economic revolution depends on transforming the country’s energy generation and distribution infrastructure. China also fully appreciates that the next great upward movement in economic development worldwide will arise from the wholesale conversion of the world’s energy infrastructure and that it will continue its impressive growth, while achieving sustainability, precisely through the process of restructuring how it generates and delivers energy. 

Some in the West have begun to speak fondly of the effectiveness of China’s top down, command-style approach to transforming its energy infrastructure. The United States Senate must show that our vital economic and national security interests can be achieved through the untidy, yet democratic processes that have served us so well throughout our history.

If we cannot demonstrate a commitment to protect our own vital interests by marching decidedly forward towards the new energy future, how can we expect China to stand with us as we try to address the challenges posed by Iran’s nuclear aspirations? The United States Senate must act decisively and without delay. 

Lou Schwartz, a lawyer and China specialist who focuses his work on the energy and metals sectors in the People's Republic of China, is a frequent contributor to Renewable Energy World.   Through China Strategies, LLC, Lou provides clients research and analysis, due diligence, merger and acquisition, private equity investment and other support for trade and investment in China's burgeoning energy and metals industries. As part of the 2009 ROTH China Conference scheduled for October 12-14, 2009 at Fontainebleau Miami Beach, Florida, ROTH is featuring a designated China Energy Track, which will include presentations from 19 companies that operate within China's energy sector and a keynote speech by Lou Schwartz, President of China Strategies.