Expressing the Sense of the House that a Chinese State-Owned Energy Company Could Take Action that Would Threaten the United States

EXPRESSING THE SENSE OF THE HOUSE THAT A CHINESE STATE-OWNED ENERGY COMPANY COULD TAKE ACTION THAT WOULD THREATEN THE UNITED STATES -- (House of Representatives - June 30, 2005)

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Mr. GARY G. MILLER of California. Mr. Speaker, I rise today in support of H. Res. 344, which expresses the sense of the House of Representatives that a Chinese government acquisition of a critical United States energy company could impair our national security and therefore justifies a comprehensive review.

As a member of the Congressional China Caucus, I would like to commend Chairman POMBO for his hard work to ensure our country and its resources are protected.

The bid by the China National Offshore Oil Corporation (CNOOC), whose majority owner is the Chinese government, to acquire Unocal Corporation is China's first attempt to secure energy resources in the United States and must be thoroughly evaluated.

Unocal is one of America's leading independent natural gas and crude oil exploration and production companies. It is the country's ninth largest oil company, producing 159,000 barrels of oil and more than 1.5 billion cubic feet of natural gas per day.

The Chinese oil company's plan to buy California-based Unocal poses serious questions about national security. In addition, this acquisition could mean less energy for the United States.

In a free market economy, mergers and acquisitions are a common way to enter foreign markets. However, China does not yet comprehend laissez faire economic principles. While our economy promotes competition for the sake of consumers, China's economy is easily influenced by political forces. As a state-owned corporation with ties to Chinese government leaders, I am worried that CNOOC's motivation is aligned to political and nationalistic goals. Specifically, I am troubled that CNOOC may use Unocal's technology to advance China's military.

As is evidenced by passage of the Energy Policy Act in the House and the Senate, I know that all Members of Congress understand the critical need to secure the future availability of energy resources for American consumers. I fear China is attempting to buy Unocal not as an investment, but to use the company's vast reserves, especially its natural gas fields, for its own benefit at the cost of the U.S. economy. For these reasons, Congress must ensure the Chinese company's bid is carefully reviewed by all of the relevant agencies.

I urge my colleagues to support this resolution to demonstrate that we will not let China damage our economy or compromise our national security through hostile acquisitions of oil and natural gas resources.

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