Congressional Moves To Stop Unocal Buy

Congressman Richard Pombo, R-Calif., wants the energy bill amended to force a thorough -- and probably deal-killing -- study of the impact of CNOOC's proposed $18.5 billion bid for Unocal on the nation's economy and military readiness. In a letter to Joe Barton, R-Texas, chairman of the House-Senate energy bill conference committee, Pombo said:

"I am writing to to encourage you to consider including provisions in the energy bill conference report that would ensure a complete understanding of the implications of China's growing energy requirements on national security, energy security and economic future of the United States before the government could approve a takeover of Unocal by CNOOC."

Pombo wants the Energy Department to work with Defense and Homeland Security to study:

• energy assets that have been sought for investment by Chinese companies;
• whether the energy investments have been on market-based terms without government subsidies;
• the impact such energy investments would have on U.S. control of dual-use and export-controlled technologies;
• the relationship between the Chinese government and Chinese energy businesses such as CNOOC;
• U.S. energy policy and foreign policy as they relate to ensuring a competitive global energy market; and
• the relationship between the United States and the Chinese government on pursuing energy interests in a manner that avoids conflicts.

I would add to that list:

• Minerals and other materials of strategic significance, in addition to oil assets, that the Chinese are buying up;
• The strategic naval implications of extensive CNOOC oil lease holdings in the Malacca Strait, which would occur if the acquisition goes through

h/t Green Sheets (subscription required)