Oil Greed--And The Lawyers--Goes To China
Bullish on China Shops
The oil industry, facing conservation efforts and a diminishing market in the US and other Western countries, is already seeding the huge marketplace that is the People's Republic of China. Like Wal-Mart, the oil industry is not limiting their options to gouging people of the West, but are now reaching into the largest market in the world knowing that they will not be able to set their own prices as freely as they do in the western part of the world, but will more than adequately make up for it by the sheer volume of sales and consumption.
There are folks, especially those in favor of regime change and the Bush Doctrine, that will argue the presence of capitalistic entities in communist China will bring about reforms. These folks are ignoring the history of China. China has never suffered reforms easily and has always maintained a sense of isolation whenever possible. Even during the era when colonial forces controlled most of the ports and coastlines of China, the vast interior was all but inaccessible. Such is mostly the case today, and the Chinese government places tight controls on where Westerners--even business executives--can travel.
Our energy corporations are a weak link in our national security. Most of these companies have become multi-national corporations that owe no allegiance to any particular entity other than those select individuals that own the vast majority of their stock. The executives of these entities have an in with all levels of our government, are receiving tax breaks and royalty incentives, are gouging the consumers at the point of delivery, and have opposed energy conservation at every turn. Now that there is, once again, talk of conservation and investigations into gouging (and it is just all talk), the energy providers are going to run for cover and hedge their bets. They have us all by the gonads in terms of dictating the terms by which we are provided our energy consumption. The electric companies have irrevocable rights of way throughout our country and pay nothing for the access, but many charge "infrastructure" fees to the end-consumer (i.e. Public Service of New Hampshire). The propane industry has an almost monopolistic stranglehold on the LPG market because they have locked out competitive delivery by having state and federal laws that mandate delivery by a single service provider unless the entire tank is exchanged. While this is ostensibly mandated for "safety reasons", the argument for safety is trumped up by the industry because most folks that use LPG get their tanks from the entity that placed (not installed, but placed) the tank on the premises.
The alternative energy sources are no better. The technology for solar panels has been around since at least the 1970s. The cost of producing the necessary panels and equipment has come down, but the cost of solar energy systems have tripled approximately every five years. The cost of alternative energy vehicles is still so high that most of us cannot reasonably expect to choose those alternatives.
Every once in a while I receive a chain e-mail bemoaning the cost of energy that blames the Arabs (especially the Saudis) and other OPEC members. The problem that most of these folks that originate these chain letters do not realize is that it is our own policies and practices--developed and implemented by our own government--that are the major obstacle and the cause of our energy costs.
The energy business is far and away the leading reason why a growing number of large Texas firms have opened offices halfway around the world in the booming market of China. "The reason we decided to open an office in Asia is we regard ourselves as the pre-eminent law firm in the world representing energy clients," says Stuart Schaffer, a partner in Baker Botts, which opened an office in Hong Kong in 2005 and has asked the Beijing Municipal Justice Bureau for permission to open an office in Beijing. "We open in key energy hubs," says Schaffer, head of the global projects group at the 717-lawyer Houston-based firm.
"That's why we are in London and Moscow and Dubai [United Arab Emirates]. We felt the biggest hole in our network of foreign offices was Asia." Baker Botts isn't the only large Texas firm established in Hong Kong, Beijing or Shanghai, or considering it. According to a report in November 2005 in The American Lawyer, a Texas Lawyer affiliate, 39 of the 250 largest U.S. firms have offices in at least one of those Chinese cities. Other Texas-based firms in China include Fulbright & Jaworski, Vinson & Elkins and Andrews Kurth. The management committee of Dallas-based Akin Gump Strauss Hauer & Feld is expected to vote today on opening an office in Beijing.
The oil industry, facing conservation efforts and a diminishing market in the US and other Western countries, is already seeding the huge marketplace that is the People's Republic of China. Like Wal-Mart, the oil industry is not limiting their options to gouging people of the West, but are now reaching into the largest market in the world knowing that they will not be able to set their own prices as freely as they do in the western part of the world, but will more than adequately make up for it by the sheer volume of sales and consumption.
There are folks, especially those in favor of regime change and the Bush Doctrine, that will argue the presence of capitalistic entities in communist China will bring about reforms. These folks are ignoring the history of China. China has never suffered reforms easily and has always maintained a sense of isolation whenever possible. Even during the era when colonial forces controlled most of the ports and coastlines of China, the vast interior was all but inaccessible. Such is mostly the case today, and the Chinese government places tight controls on where Westerners--even business executives--can travel.
Our energy corporations are a weak link in our national security. Most of these companies have become multi-national corporations that owe no allegiance to any particular entity other than those select individuals that own the vast majority of their stock. The executives of these entities have an in with all levels of our government, are receiving tax breaks and royalty incentives, are gouging the consumers at the point of delivery, and have opposed energy conservation at every turn. Now that there is, once again, talk of conservation and investigations into gouging (and it is just all talk), the energy providers are going to run for cover and hedge their bets. They have us all by the gonads in terms of dictating the terms by which we are provided our energy consumption. The electric companies have irrevocable rights of way throughout our country and pay nothing for the access, but many charge "infrastructure" fees to the end-consumer (i.e. Public Service of New Hampshire). The propane industry has an almost monopolistic stranglehold on the LPG market because they have locked out competitive delivery by having state and federal laws that mandate delivery by a single service provider unless the entire tank is exchanged. While this is ostensibly mandated for "safety reasons", the argument for safety is trumped up by the industry because most folks that use LPG get their tanks from the entity that placed (not installed, but placed) the tank on the premises.
The alternative energy sources are no better. The technology for solar panels has been around since at least the 1970s. The cost of producing the necessary panels and equipment has come down, but the cost of solar energy systems have tripled approximately every five years. The cost of alternative energy vehicles is still so high that most of us cannot reasonably expect to choose those alternatives.
Every once in a while I receive a chain e-mail bemoaning the cost of energy that blames the Arabs (especially the Saudis) and other OPEC members. The problem that most of these folks that originate these chain letters do not realize is that it is our own policies and practices--developed and implemented by our own government--that are the major obstacle and the cause of our energy costs.
posted by Jim Downey at 9:50 AM
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