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oil wealth。 China is furious that Japan has outbid it in their battle to determine 
the route of the pipeline that Russia intends to build to the Far East。〃 At the same 


time it was reported that a Chinese nuclear submarine had accidentally strayed into 
Japanese territorial waters。 The Chinese government apologized for the 〃technical 
error。〃 If you believe that; I have an oil well in Hawaii I would like to sell you 。。。 
In 2004; China began competing with the United States for oil exploration 
opportunities in Canada and Venezuela。 If China has its way; it will stick a straw 
into Canada and Venezuela and suck out every drop of oil; which will have the side 
effect of making America more dependent on Saudi Arabia。 
I interviewed the Japanese manager of a major U。S。 multinational that was 
headquartered in Dalian; in northeastern China。 〃China is following the path of Japan 
and Korea;〃 said the executive; on the condition that he and his company not be quoted 
by name; 〃and the big question is; Can the world afford to have 1。3 billion people 
following that path and driving the same cars and using the same amount of energy? 
So I see the flattening; but the challenge of the twenty…first century is; Are we 
going to hit another oil crisis? The oil crisis in the 1970s coincided with Japan 
and Europe rising。 'There was a time' when the U。S。 was the only big consumer of oil; 
but when Japan and Europe came in; OPEC got the power。 But when China and India come 
into being the consumers; it will be a huge challenge that is an order of magnitude 
different。 It is megapolitics。 The limits of growth in the 1970s were overcome with 
technology。 We got smarter than before; equipment became more efficient; and energy 
consumption per head was lower。 But now 'with China; India; and Russia all coming 
on strong' it is multiplied by a factor of ten。 There is something 

we really need to be serious about。 We cannot restrict China; 'Russia;' and India。 
They will grow and they must grow。〃 
One thing we will not be able to do is tell young Indians; Russians; Poles; or Chinese 
that just when they are arriving on the leveled playing field; they have to hold back 
and consume less for the greater global good。 While giving a talk to students at the 
Beijing College of Foreign Affairs; I spoke about the most important issues that could 
threaten global stability; including the competition for oil and other energy 
resources that would naturally occur as China; India; and the former Soviet Union 
began to consume more oil。 No sooner did I finish than a young Chinese woman student 
shot up her hand and asked basically the following question: 〃Why should China have 
to restrain its energy consumption and worry about the environment; when America and 
Europe got to consume all they energy they wanted when they were developing?〃 I did 
not have a good answer。 China isa high…pride country。 TellingChina; India; and Russia 
to consume less could have the same geopolitical impact that the world's inability 
to accommodate a rising Japan and Germany had after World War I。 
If current trends hold; China will go from importing 7 million barrels of oil today 
to 14 million a day by 2012。 For the world to accommodate that increase it would have 
to find another SaudiArabia。 That is notlikely; which doesn't leave many good options。 
〃For geopolitical reasons; we cannot tell them no; we cannot tell China and India; 
it is not your turn;〃 said Philip K。 Verleger Jr。; a leading oil economist。 〃And for 
moral reasons; we have lost the ability to lecture anyone。〃 But if we do nothing; 
several things will likely result。 First; gasoline prices will continue to trend 


higher and higher。 Second; we will be strengthening the very worst political systems 
in the world…like Sudan; Iran; and Saudi Arabia。 And third; the environment will be 
damaged more and more。 Already; the newspaper headlines in China every day are about 
energy shortages; blackouts; and brownouts。 U。S。 officials estimate that twenty…four 
out of China's thirty…one provinces are now experiencing power shortages。 
We are all stewards of the planet; and the test for our generation is whether we will 
pass on a planet in as good or better shape than we found 
412 
it。 The flattening process is going to challenge that responsibility。 〃Aldo Leopold; 
the father of wildlife ecology; once said: 'The first rule of intelligent tinkering 
is save all the pieces;'〃 remarked Glenn Prickett; senior vice president of 
Conservation International。 〃What if we don't? What if the 3 billion new entrants 
start gobbling up all the resources? Species and ecosystems can't adapt that fast; 
and we will lose a major portion of the earth's remaining biological diversity。〃 
Already; noted Prickett; if you look at what is happening in the Congo Basin; the 
Amazon; the rain forest of Indonesia…the last great wilderness areas…you find that 
they are being devoured by China's rising appetite。 More and more palm oil is being 
extracted from Indonesia and Malaysia; soybeans out of Brazil; timber out of central 
Africa; and natural gas out of all of the above to serve China…and; as a result; 
threatening all sorts of natural habitats。 If these trends go on unchecked; with all 
the natural habitats being converted to farmland and urban areas; and the globe 
getting warmer; many of the currently threatened species will be condemned to 
extinction。 
The move to sharply reduce energy consumption has to come from within China; as the 
Chinese confront what the need for fuel is doing to their own environment and growth 
aspirations。 The only thing…and the best thing…we in the United States and Western 
Europe can do to nudge China toward that understanding is set an example by changing 
our own consumption patterns。 That would give us some credibility to lecture others。 
〃Restoring our moral standing on energy is now a vital national security and 
environmental issue;〃 said Verleger。 That requires doing everything more 
seriously…more serious government funding for alternatives; a real push by the 
federal government to promote conservation; a gasoline tax that will drive more 
consumers to buy hybrid vehicles and smaller cars; legislation to force Detroit to 
make more fuel…efficient vehicles; and yes; more domestic exploration。 Together; 
added Verleger; that could help stabilize the price at around 25 a barrel; 〃which 
seems to be the ideal range for sustainable global growth。〃 
In sum; we in the West have a fundamental interest in keeping the American dream alive 
in Beijing and Boise and Bangalore。 But we have to stop fooling ourselves that it 
can be done in a flat world with 3 billion potential new consumers…if we don't find 
a radical new approach to en413 
ergy usage and conservation。 If we fail to do so; we will be courting both an 
environmental and geopolitical whirlwind。 If there was ever a time for some big 
collaboration; it is now; and the subject is energy。 I would love to see a grand 


China…United States Manhattan Project; a crash program to jointly develop clean 
alternative energies; bringing together China's best scientists and its political 
ability to implement pilot projects; with America's best brains; technology; and 
money。 It would be the ideal model and the ideal project for creating value 
horizontally; with each side contributing its strength。 Said Scott Roberts; the 
Cambridge Energy Research Associates analyst in China; 〃When it comes to renewable 
technology and sustainable energy; China could be the laboratory of the world…not 
just the workshop of the world。〃 Why not? 

::::: TWELVE 
The Dell Theory of Conflict Prevention 
Old…Time Versus Just…in…Time 
Free Trade is God's diplomacy。 There is no other certain way of uniting people in 
the bonds of peace。 …British politician Richard Cobden; 1857 
Before I share with you the subject of this chapter; I have to tell you a little bit 
about the computer that I wrote this book on。 It's related to the theme I am about 
to discuss。 This book was largely written on a Dell Inspiron 600m notebook; service 
tag number 9ZRJP41。 As part of the research for 

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