[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 344 Introduced in House (IH)]
109th CONGRESS
1st Session
H. RES. 344
Expressing the sense of the House of Representatives that a Chinese
state-owned energy company exercising control of critical United States
energy infrastructure and energy production capacity could take action
that would threaten to impair the national security of the United
States.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 29, 2005
Mr. Pombo (for himself, Mr. Oxley, Mr. Hunter, Mr. Barton of Texas, Mr.
Ney, and Mr. Hyde) submitted the following resolution; which was
referred to the Committee on Financial Services, and in addition to the
Committee on International Relations, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
RESOLUTION
Expressing the sense of the House of Representatives that a Chinese
state-owned energy company exercising control of critical United States
energy infrastructure and energy production capacity could take action
that would threaten to impair the national security of the United
States.
Whereas oil and natural gas resources are strategic assets critical to national
security and the Nation's economic prosperity;
Whereas the global demand for oil and natural gas is at the highest levels in
history;
Whereas the global excess capacity of oil production, at between 1,500,000 and
2,000,000 barrels per day, is at its lowest level in the past several
decades, contributing to world oil prices reaching historic highs of
above $60 per barrel;
Whereas natural gas globally is the fastest growing component of primary energy
consumption, projected to increase by nearly 70 percent by 2025;
Whereas the National Security Strategy of the United States approved by
President George W. Bush on September 17, 2002, concludes that the
People's Republic of China remains strongly committed to national one-
party rule by the Communist Party;
Whereas China's daily consumption of crude oil grew by nearly 850,000 barrels in
2004, accounting for more than one-third of the increase in world demand
for oil in 2004;
Whereas China's consumption of crude oil is expected to grow by an additional
7.5 percent in 2005, and world oil prices are projected to rise
significantly as a result of increasing demand from China for oil;
Whereas notwithstanding the increasing demand from China for oil, domestic
Chinese output of oil has remained relatively stagnant;
Whereas on June 23, 2005, the China National Offshore Oil Corporation (CNOOC)
announced its intent to acquire Unocal Corporation, in the face of a
competing bid for Unocal Corporation from Chevron Corporation;
Whereas the People's Republic of China owns approximately 70 percent of CNOOC;
Whereas a significant portion of the CNOOC acquisition is to be financed and
heavily subsidized by banks owned by the People's Republic of China;
Whereas Unocal Corporation is based in the United States, and has approximately
1,750,000,000 barrels of oil equivalent, with its core operating areas
in Southeast Asia, Alaska, Canada, and the lower 48 States;
Whereas CNOOC has made various representations about its intention to sell oil
developed in the Gulf of Mexico to the United States, but has not made
any commitment to sell other natural gas and oil it develops into global
energy markets instead of shipping it directly to China;
Whereas a CNOOC acquisition of Unocal Corporation would result in the strategic
assets of Unocal Corporation being preferentially allocated to China by
the Chinese Government;
Whereas a Chinese Government acquisition of Unocal Corporation would weaken the
ability of the United States to influence the oil and gas supplies of
the Nation through companies that must adhere to United States laws;
Whereas Unocal Corporation was responsible for the production of energy
equivalent to approximately 411,000 barrels of oil per day in 2004,
which is approximately one-third of all global excess oil production
capacity;
Whereas CNOOC's control of Unocal Corporation's productive capacity would mean
control of approximately one-third of all global excess oil production
capacity;
Whereas the petroleum sector uses a range of sensitive technologies for
exploration (such as seismic analysis and processing, downhole logging
sensors, and modeling software), production, and refining (such as
processing technologies and equipment), including technologies that have
``dual-use'' commercial and military applications;
Whereas several of the technologies used in oil and energy production require
export licensing for export from the United States to China;
Whereas the CNOOC acquisition of Unocal Corporation could provide access to
Unocal Corporation's sensitive dual-use technologies that the United
States would otherwise restrict for export to China;
Whereas oil companies owned by the People's Republic of China are active in
parts of the world, such as Sudan and Iran, that are subject to United
States sanctions laws, and the national security of the United States is
threatened by the export of sensitive, export controlled, and dual-use
technologies to such countries;
Whereas barriers to the ability of the United States Government to enforce
export controls and sanctions could pose a direct threat to the national
security of the United States; and
Whereas section 721 of the Defense Production Act of 1950 (50 App. U.S.C. 2170)
authorizes the President to suspend or prohibit any foreign acquisition,
merger, or takeover of a United States corporation that threatens the
national security of the United States, if the President finds that
``there is credible evidence that leads the President to believe that
the foreign interest exercising control might take action that threatens
to impair the national security'' and other provisions of law ``do not
in the President's judgment provide adequate and appropriate authority
for the President to protect the national security'': Now, therefore, be
it
Resolved, That it is the sense of the House of Representatives
that--
(1) the Chinese state-owned China National Offshore Oil
Corporation, through control of Unocal Corporation obtained by
the proposed acquisition, merger, or takeover of Unocal
Corporation, could take action that would threaten to impair
the national security of the United States; and
(2) if Unocal Corporation enters into an agreement of
acquisition, merger, or takeover of Unocal Corporation by the
China National Offshore Oil Corporation, the President should
initiate immediately a thorough review of the proposed
acquisition, merger, or takeover.
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