By THEODORE MORAN

By THEODORE MORAN
NEW YORK DAILY NEWS
NO: Congress has correctly recognized that the offer by CNOOC -- a Chinese-government owned oil company -- to buy Unocal poses important questions that require careful examination.
When Congress passed legislation in 1988 (the Exon-Florio bill) to protect the U.S. against potentially harmful foreign acquisitions, the principal worry was that foreigners might gain control of critical defense technologies and deploy them in ways hostile to the national interests of the United States.
But Unocal's expertise lies in finding and developing new oil and natural gas resources. The government of China, with a voracious appetite for energy, will deploy this technology to expand production wherever Unocal has properties. Chinese success with Unocal know-how will help relieve the strains on world oil markets and will not damage U.S. interests.
The Exon-Florio legislation emanated from a second fear as well, that a foreign acquisition might deprive the U.S. of control over assets that would be difficult to replace or reproduce. Here, the worst-case scenario is that the Chinese government would order CNOOC to redirect Unocal output to meet mainland energy demand. While cumbersome and expensive, the Chinese government might even order North American production sent to the homeland.
Balance of payments
But oil is highly fungible. North American buyers would replace Unocal's 70,000 barrels per day (approximately one-tenth of 1 percent of U.S. consumption) from alternative suppliers. Unocal's exports to China would be canceled out by new imports. U.S. dependence on external sources of energy -- however lamentable -- would remain unaffected, as would the burden on the U.S. balance of payments.
Thus, the two "worst-case scenarios" -- leakage of technology to foreigners, and external control over valuable assets -- do not prove to be particularly worrisome or harmful to the United States. Entirely the reverse, Unocal's potential contribution to CNOOC's ability to find and develop new energy resources would have a positive impact on world markets, and U.S. consumers.
X Theodore Moran, a former State Department senior adviser, teaches international business diplomacy at Georgetown University in Washington. He wrote this for the New York Daily News. Distributed by Knight Ridder/Tribune Information Services.