It was only a few years ago that the US and its oil companies, in their quest to secure vital oil and gas, were accused of all sorts of transgressions from imperialistic exploitation to coddling corrupt regimes to finding pretexts to invade Iraq, twice. In retrospect it is not quite clear how much of “always blame the Americans even if you are wrong you are right” was justified, but one thing is certain. The insinuations implied that the US government and its foreign policy understood the importance of energy supply to its economy.

This is no longer the case, with the American national debate (and that of several other developed countries) consumed by climate change, carbon emissions, and the preposterousness of solar and wind energies as substitutes for real energy sources. While any realistic and even charitable estimate puts solar and wind as contributing less than 1 percent of world energy demand for the next 20 years, more than 85 percent will still derive from oil, gas and coal; this while world energy demand will increase by more than 40 percent. The lion’s share of the latter will go to China.

The concern for the 1 percent solution, while ignoring the 85 percent question, is tantamount to economic hari-kiri for the US and presents a huge opportunity for China to expand its energy interests worldwide and diversify its supply sources.

The signs of China’s soaring oil demand are obvious. After phenomenal economic growth in the first seven years of this decade, oil demand has grown double digits. A short-lived slowdown lasted for a few months after the dire headlines of last year’s economic crisis. But Chinese economic growth has bounced back to more than 8 percent. So did oil demand, which came back with vengeance. Last January and February, Chinese oil imports stood at 3.1 million barrels per day, compared to an average of 3.87 million barrels per day in 2008. But from March to June oil imports averaged over 4 million barrels per day and in July they jumped to an unprecedented 4.6 million barrels per day, close to a 20% increase over 2008 levels. (Source: China Customs, August 2009.)

International business newspapers are rife with stories and discussion s about blockbuster international oil and gas deals to take advantage of “the relatively low prices of overseas assets” as a senior company executive was quoted by China Daily on August 12. The most obvious deal is the rumored purchase of Repsol’s stake in Argentina’s YPF for some $17 billion. The buyers: China’s largest and third-largest oil companies, CNPC and CNOOC. If the deal happens it will be the largest-ever Chinese oil acquisition. (CNOOC’s failed attempt to take over Unocal almost four years ago to the day would have been slightly larger.)

The deal is one made in oil heaven. Repsol unloads an economically questionable asset, one that became so because of burdensome political troubles in Argentina. For the Chinese, expanding in South America on a grand scale is both a psychological milestone and key to diversification outside of their current assets in Asia Pacific, Middle East and much-criticized projects in Africa, headed by their Sudanese venture.

It is certain that large Chinese oil acquisitions will become commonplace. The likely next target will be in Venezuela, where an eager Hugo Chávez is waiting, and on the periphery of Russia, in particular Kazakhstan and Turkmenistan.

Almost overnight, the US and the EU will be reduced to mere bystanders while China moves into the geopolitical major leagues. Massive Chinese acquisition of energy assets, while the West is philosophizing on the future of the planet and carbon cap-and-trade schemes, will lead to a transfer of political and economic power that the modern world has rarely seen. Why the US would be willing to give up competing for what has arguably been the world’s most vital commodity and for which there is no credible alternative, is mystifying.