Excellent article! China is serious country, serious about establishing energy security. The West is seemingly on a path of economic and cultural suicide pursuing the hopelessly unattainable idiocy of Net Zero and trying to power their modern societies with hopelessly intermittent, hopelessly non-dispatchable, hopelessly dilute, and hopelessly expensive, sunshine and breezes energies. But, even given those caveats--command, planned, central economies are never efficient from a societal overview...just witness the massive harm and impoverishment which Xi has inflicted on the Chinese nation with his moronic Covid lockdown policies. China has its real estate crisis, its massive debt crisis, vast overbuilding in its high speed rail network, massive youth unemployment, and a demographic implosion with its "centrally planned" one child policy. So...I don't have a great deal of hope that China can become a fracking powerhouse, though I hope they do. The world needs to consume massively more energy for human flourishing and hydrocarbon fuels are the only thing that works both at scale and affordability. Nothing else is even in the same universe.
The West really needs to focus on real issues, rather than trying to project, fantasize, and claim that anything they are doing to make nicer weather 80 years from now is anything other than idiocy- immoral, impoverishing, destructive idiocy Grid wind and grid solar are parasites, leeches, thieves, impoverishment vehicles, fraud, and manifestations of the capture of the police power of the state by the Climate Industrial Complex. Everyone is going to be truly worse off with these subsidy queens... and they will never change the weather.
A quibble... note grammatical errors below and some syntax recommendations. Thanks again for your article!
As always(,) none of this is investment advice(.) (T)his is merely my opinion base(d) on observe(d) facts. There is a chan(c)e I could be wrong and (I) welcome comments-even if (the viewpoint) is different (than mine). I will change my mind and narrative if the facts change and being that I can’t know every fact, my narrative will inevitably change.
China is also feverishly building out a nuclear base-load infrastructure, much of it paid for by selling EVs and solar panels and other garbage produced using coal energy, to the West.
Most of your response it true, pricing power? not really but your point is basically akin to what Charlie, R.I.P, Munger opine when ask about oil & gas. "If I could use up my neighbors oil & gas while keeping mine in the ground and give them worthless piece of papers for it, I mean that's a hell of a deal". Their are other factors to consider-with respect to your point-to consider. Like the factor that neither Russia nor China have the reverse currency so while the can trade with each, eventually their is only so many rubles and Yuan that they will need from each other. Russian needs Western Technology continue it drilling schedules-the scope of this is beyond this post but review their large LNG project which are mostly JV with Western countries-and they are cut off from the West. This in a nut shell will be the main issue. To give you a scope of this issue since the weaponization of the UDS, it has grown in usage and importance, which will further imped China and Russia's relationship.
I’d be interested to understand a bit more about the technology that Russia and China need. I presume industrial espionage is occurring and that eventually China / Russia will mimic it. What they don’t have is the “know how” which I guess is embedded in the oil industry work force.
Great article. I only wish Canada could join the global party and fully developed its abundant natural resources. I believe Canada could be one of the richest countries if only the federal shackles could be removed.
The transition from consumer to producer coming at a time when labor prices are going up and competitiveness is slipping is pretty good for China.
Not gonna lie when I first saw this article on the stack I thought "Canada? No, impossible, the Canadian government hates CO2 so much they'd stop breathing if they could." I love-hate that I'm right.
Great article. China Oilfield Services（2883.HK), a subsidiary of CNNOC, benefits the most from the Chinese offshore expansion and global offshore rig shortage.
The very notion of fair trade is a misnomer. Countries can deal with comparative advantage for a time until it turns into an absolute advantage. Countries get to an absolute advantage because of the structures the government as facilitated. In China the fact they have an open communistic/socialistic/fascist economic structure vs American closed door democratic/fascist structure-which if you understand the details and how the structure work-means that China will have absolute advantage over America in trade. Think about this why is that China can build power plants faster than America? Is it because the are better engineers, what to the contrary, we have a comparative advantage over them yet they out build us.
Yes in theory, but in application it does not work out that way. Let's go back in time to January 15, 2015 when Switzerland broke it's peg to the euro. Why did it do this well it came as a response to the EU stimulus response, in other words TRADE. and what did it do the break the peg, it printed a lot of swiss francs and brought USD assets-as 90% of assets on the banks books are foreign-siphoning off USD dividend and capital gains all from nothing they exchanged nothing and got hard currency all which they used to suppress their currency to not make their trade balance get out of wack with their Europeans counter parts. Where is the fair trade, this coming from a country known and respected for the rule of law and fair trade.
china has pricing leverage on imported russian energy, given it is and will be the largest adjacent neighbor.
that means it may be able to do this for a long time w/out capex cost, technical challenges, and political (offshore) disputes to exploit its quasi-regional reserves. you may have seen numerous articles on why china's economy may no longer have an appetite for huge new capex binges as in the past.
Excellent article! China is serious country, serious about establishing energy security. The West is seemingly on a path of economic and cultural suicide pursuing the hopelessly unattainable idiocy of Net Zero and trying to power their modern societies with hopelessly intermittent, hopelessly non-dispatchable, hopelessly dilute, and hopelessly expensive, sunshine and breezes energies. But, even given those caveats--command, planned, central economies are never efficient from a societal overview...just witness the massive harm and impoverishment which Xi has inflicted on the Chinese nation with his moronic Covid lockdown policies. China has its real estate crisis, its massive debt crisis, vast overbuilding in its high speed rail network, massive youth unemployment, and a demographic implosion with its "centrally planned" one child policy. So...I don't have a great deal of hope that China can become a fracking powerhouse, though I hope they do. The world needs to consume massively more energy for human flourishing and hydrocarbon fuels are the only thing that works both at scale and affordability. Nothing else is even in the same universe.
The West really needs to focus on real issues, rather than trying to project, fantasize, and claim that anything they are doing to make nicer weather 80 years from now is anything other than idiocy- immoral, impoverishing, destructive idiocy Grid wind and grid solar are parasites, leeches, thieves, impoverishment vehicles, fraud, and manifestations of the capture of the police power of the state by the Climate Industrial Complex. Everyone is going to be truly worse off with these subsidy queens... and they will never change the weather.
A quibble... note grammatical errors below and some syntax recommendations. Thanks again for your article!
As always(,) none of this is investment advice(.) (T)his is merely my opinion base(d) on observe(d) facts. There is a chan(c)e I could be wrong and (I) welcome comments-even if (the viewpoint) is different (than mine). I will change my mind and narrative if the facts change and being that I can’t know every fact, my narrative will inevitably change.
Thank you
Fascinating article and a new Must Read.
China is also feverishly building out a nuclear base-load infrastructure, much of it paid for by selling EVs and solar panels and other garbage produced using coal energy, to the West.
Thanks for the support
Most of your response it true, pricing power? not really but your point is basically akin to what Charlie, R.I.P, Munger opine when ask about oil & gas. "If I could use up my neighbors oil & gas while keeping mine in the ground and give them worthless piece of papers for it, I mean that's a hell of a deal". Their are other factors to consider-with respect to your point-to consider. Like the factor that neither Russia nor China have the reverse currency so while the can trade with each, eventually their is only so many rubles and Yuan that they will need from each other. Russian needs Western Technology continue it drilling schedules-the scope of this is beyond this post but review their large LNG project which are mostly JV with Western countries-and they are cut off from the West. This in a nut shell will be the main issue. To give you a scope of this issue since the weaponization of the UDS, it has grown in usage and importance, which will further imped China and Russia's relationship.
I’d be interested to understand a bit more about the technology that Russia and China need. I presume industrial espionage is occurring and that eventually China / Russia will mimic it. What they don’t have is the “know how” which I guess is embedded in the oil industry work force.
Great article. I only wish Canada could join the global party and fully developed its abundant natural resources. I believe Canada could be one of the richest countries if only the federal shackles could be removed.
The transition from consumer to producer coming at a time when labor prices are going up and competitiveness is slipping is pretty good for China.
Not gonna lie when I first saw this article on the stack I thought "Canada? No, impossible, the Canadian government hates CO2 so much they'd stop breathing if they could." I love-hate that I'm right.
Great article. China Oilfield Services（2883.HK), a subsidiary of CNNOC, benefits the most from the Chinese offshore expansion and global offshore rig shortage.
Very detailed and clear. Thanks
You are welcome
An agrarian civilization won't do fair trade.
The very notion of fair trade is a misnomer. Countries can deal with comparative advantage for a time until it turns into an absolute advantage. Countries get to an absolute advantage because of the structures the government as facilitated. In China the fact they have an open communistic/socialistic/fascist economic structure vs American closed door democratic/fascist structure-which if you understand the details and how the structure work-means that China will have absolute advantage over America in trade. Think about this why is that China can build power plants faster than America? Is it because the are better engineers, what to the contrary, we have a comparative advantage over them yet they out build us.
Fair trade means stick to agreement. A long losing trade will shut down trade.
Yes in theory, but in application it does not work out that way. Let's go back in time to January 15, 2015 when Switzerland broke it's peg to the euro. Why did it do this well it came as a response to the EU stimulus response, in other words TRADE. and what did it do the break the peg, it printed a lot of swiss francs and brought USD assets-as 90% of assets on the banks books are foreign-siphoning off USD dividend and capital gains all from nothing they exchanged nothing and got hard currency all which they used to suppress their currency to not make their trade balance get out of wack with their Europeans counter parts. Where is the fair trade, this coming from a country known and respected for the rule of law and fair trade.
russian gas is likely offered below china's capex+production cost for 10+ yrs (more if needed for war reparations). yes\no ?
critical issue if china's own own economy in deep trouble.
Confused on the question?
china has pricing leverage on imported russian energy, given it is and will be the largest adjacent neighbor.
that means it may be able to do this for a long time w/out capex cost, technical challenges, and political (offshore) disputes to exploit its quasi-regional reserves. you may have seen numerous articles on why china's economy may no longer have an appetite for huge new capex binges as in the past.