Analysis by Energy Workforce President Tim Tarpley
Following a series of aggressive moves by China in response to the Taiwanese President’s visit to the United States, the temperature has clearly risen in the South China Sea. While this kind of rhetoric is typical by the Chinese and should not be taken 100% seriously by us, the prospect of two worldwide conflicts going on at the same time certainly could have dramatic impacts on energy prices and the worldwide movement of goods and services to Asia.
China’s military declared on Monday that it is “ready to fight” after completing three days of large-scale combat exercises around Taiwan that simulated sealing off the island. This was in conjunction with a media blitz on Chinese state television with digital animations showing how an assault on the island would take place.
The live-fire exercises disrupted flights and shipping within the Taiwan strait, one of the busiest worldwide waterways for global trade. Much of the display of force was focused on showing air power. Taiwan air defense stated that more than 200 flights by Chinese warplanes had occurred in the past three days. Chinese state broadcaster CCTV, citing the People’s Liberation Army, said the exercises are “simulating the joint sealing off” of Taiwan as well as “waves of simulated strikes” at important targets on the island. Also on Monday, the PLA said its Shandong aircraft carrier was taking part in the exercises encircling Taiwan for the first time.
The escalation is significant in its potential to disrupt worldwide trade as well as its potential significant effects on the global energy markets. The Chinese have recently brokered long-term energy deals with Saudi Arabia, which could prove instrumental in providing a pathway for China to secure energy in the event they face international sanctions given a potential escalation beyond the status quo with Taiwan. Never in modern times since World War II have the world energy markets been tested by a ground war in Europe in combination with a conflict in Asia occurring at the same time. International isolation of China could also lead them to be more willing to support Russia with lethal weapons for its continued invasion of Ukraine, which could prolong that conflict as well.
All Eyes on the SEC as Good Friday Holiday Passes Without a SEC ESG Rule
One of the oldest tricks in Washington is that if an agency is going to release a controversial rule that they want to drop and have it go under the radar, the best time to release it is the Friday before a holiday weekend. Good Friday came and went with no ESG reporting rule released by the SEC. Most SEC watchers have been betting on April as the expected release date for the rule. With no more holiday weekends left in the month, perhaps we will see a Memorial Day weekend release. The longer the agency waits, the closer the release will come to the next election cycle, meaning that political pushback against the rule may increase.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
