House Republicans push Unocal inquiry

Congress may be asked to consider a resolution today requesting that the White House investigate whether a Chinese state-owned energy company's bid to buy U.S. oil firm Unocal would be a threat to national security.

The resolution by Republican members of the House will not call for denial of the plan by the Chinese National Offshore Oil Co., or CNOOC, to buy Unocal for $18.5 billion in cash. But a spokesman for House Resources Committee Chairman Richard Pombo, one of the authors, said it would ask the Committee on Foreign Investments to investigate the deal.

"We just want national security concerns to be investigated," spokesman Brian Kennedy said.

Rep. Joe Barton of Ennis took a much harder stance on the CNOOC offer this week, asking the White House in a letter sent to President Bush to block the deal outright.

"If approved, the transaction would put vital oil assets in the Gulf of Mexico and Alaska directly into the hands of a company controlled by the government of China," Barton wrote. "We urge you to protect American national security by ensuring that vital U.S. energy assets are never sold to the Chinese government. The Chinese are great economic and political rivals, not friendly competitors or allies in democracy."

Discontent over America's $160 billion trade deficit with China, that country's protectionist monetary policies and worries about its growing military power is helping to fuel Congress' wariness.

CNOOC's bid for Unocal, which employes about 1,100 in Houston, is a direct challenge to Chevron's $16.65 billion cash and stock offer for the California-based oil company.

The Federal Trade Commission approved Chevron's bid earlier this month, and on Wednesday the Securities and Exchange Commission also gave its blessing.

Chevron has issued a waiver allowing Unocal to enter into negotiations with CNOOC, which have already begun, but Unocal also said it would hold a shareholder meeting Aug. 10 to vote on the Chevron proposal.

If the Chevron offer is turned down in favor of the CNOOC offer, California could also intervene in the case, given environmental liabilities Unocal still has there related to former refinery and mining sites.

"For California, that's a very legitimate concern when you look at both the assets and liabilities that Unocal has," Pombo said. "Would the Chinese really care about abiding by U.S. laws?"

It's time to play hardball.

The rising economic clout of China***......Yet some moves are already being made. On Tuesday, the House voted to add to this year's foreign-aid bill a provision that would prohibit the US Export-Import Bank from approving loans to help US firms build nuclear power plants in China.

Backers of the move argued that US government agencies should not help finance China's rise, and that the Chinese should be prevented from obtaining sensitive American nuclear technology.

Rep. Dana Rohrabacher (R) of California went so far as to call China a "Frankenstein monster" threatening US interests..............***

SORRY STATE (Communist, Nationalist, and Dangerous) ***...............Is there anything we can do about all this? One thing only. We must understand clearly that there will be lasting peace in East Asia when, and only when, China abandons her atavistic fantasies of imperial hegemony, withdraws her armies from the 2 million square miles of other people's territory they currently occupy, and gets herself a democratic government under a rule of law. Until that day comes, if it ever does, the danger of war will be a constant in relations between China and the world beyond the Wall, as recent events in the South China Sea have illustrated. Free nations, under the indispensable leadership of the United States, must in the meantime struggle to maintain peace, using the one, single, and only method that wretched humanity, in all its millennia of experience, has so far been able to devise for that purpose: Qui desiderat pacem, praeparet bellum.

China's Lunar Ambitions Have Produced Tensions at Home

Gertz (2nd of two parts) Thefts of U.S. technology boost China's weaponry

(part one) Chinese dragon awakens

Chinese bid for Unocal raises concern in U.S. *****.......Unocal, which has operations in Houston, has oil and gas operations in China's back yard, including Thailand, Indonesia and Bangladesh. But the company's enticement goes beyond natural resources.

Chinese energy companies need better access to technology and Western-style management know-how as much as they need reserves.

Even though China has huge coal reserves, one Chinese company bought a U.S. coal outfit for its technology. It had a coal gasification pilot project the company wanted to learn from, Spiegel said.

Unocal's deepwater technology, field operations expertise and political negotiating skills could fill some seriously gaps at CNOOC. ......... ***

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.