True those are not your exact words. You said: "when oil prices go up they will still have to pay higher and higher prices" which is equivalent, except my words do also allow for the unlikely possibility that prices could go down as well as up. My point was (and is) that you were falsely assuming that China would need to pay future prices but China has paid in full up front - will not be effected by future prices as you falsely assumed. Oil exporters are promising to re-pay loans with fixed amounts of oil, not money. For example, in Brazil's case the 10billion it has received will be paid back with 200,000 barrels/day of oil for a fixed period of years. Same is true of Venezuela. It is the US that will suffer if the price of oil increases, not China. Who is not "reading well"?
No, they will have to pay future prices, china has not paid in "full up front", they certainly will get deductions for it price but the price will still be at the whim of prices then. Do the math, that less then 3% china present oil consumption, add in Venezuela claimed 400 kbpd for fun and you still have less then 10% of china present oil consumption. This means china will still be bound by oil prices, and the countries that china is providing investment for when oil prices go up dramatically will feel very inclined to renegotiation there contracts. Same thing happened to the US when its oil investments in the middle east backfired in the 70's.
That is mainly false, the part I made bold in your text is 100% false. Try to back it up. My memory was partially wrong. China will be effected by the price of oil in that it will get 160,000 barrels/day from Brazil (not the 200,000/ day I stated) and for a variable period. BUT CHINA HAS PAID 100% UP FRONT as I stated. I found one of my older post with the facts, as I remembered them back then. Also there is a Bloomberg link about the 10 billion up front loan to Kazakhatan for oil and the a 25 billion dollar deal with /Russia for 20 supply of oil. Below, in blue is the footnote from: http://www.sciforums.com/showpost.php?p=2221537&postcount=774 *Here are a few of the 2009 deals China has made (in part to invest in real assets, not US treasury paper): “China, the world’s second-biggest energy consumer, may agree next week on lending $10 billion to Kazakhstan in return for the right to take a stake in an oil producer in the Central Asian country. …The central Asian nation is seeking $10 billion in Chinese investments, while talks are under way with China’s biggest oil company on the sale of a stake, Energy Minister Sauat Mynbayev said on April 6, {2009}. …Russia, which agreed in February to supply China with oil for 20 years in return for $25 billion in credit, is in discussions with the country for additional loans for natural gas supplies … “ From: http://www.bloomberg.com/apps/news?pid=20601087&sid=aUOIM8lpvLrM&refer=home Earlier in 2009, Brazil and Venezuela each got 10 billion dollars for delivery of oil. (As I recall, Brazil gives 160,000 Barrels / day until the $10E9, priced at market daily, and has been repaid. Think Venezuela has same deal.) I cannot find article of only yesterday, but China is giving a few billion or so to Ecuador for minerals as I recall. China has expressed fear of the dollar and is doing things rapidly now to protect its self from holding too many. My point was and remains that China is locking up the energy (and mineral and food) supplies it will need far into the future with UP FRONT loans and will not pay anything more in the future. It is doing this for the two reasons I mentioned: (1) assured future supplies & (2) to spend dollars in its reserves now while they still have value.
Excuse me but please show me how to correct the math such that where china consumes 7 Mbpd and your saying they have paid already for .2 Mbpd equals "China is locking up the energy (and mineral and food) supplies it will need far into the future", I can't get the math to work! Also do show me the contract where china gets that .2 Mbpd with no future cost what so ever for supposed many years, that quite a deal! There is a difference between guaranteed supply and fixed prices.
I thought Biofuels where the Big Oils fu*k wads great distraction, we need agricultural land to feed the growing world population. I thought the deal with hydrogen was that the Oil lot is only pushing hydrogen (and pushing it with close to no effort at best) to try and not seem like their doing what they did to the electric car (which would be the cold blooded murder of it).
Biofuels don't need to be grown on farmland, in fact the man focus now is biofuels from non-food stocks, ethanol for all cellulose be it cardboard to agriculture waste (which would mean farms would make a product out of the waste from making food) and algae grown from flue gas in the middle of deserts or afloat at sea. Biofuels are being implemented now so its not a distraction, already most gasoline in the USA is at 10% ethanol (bet you didn't notice that, interesting thing about bio-fuels is it can be implemented invisibly) I don't follow.. ?
Perhaps you do not know what a loan is? It is when you get money UP FRONT and then pay it back during future years. There are 78 pages of Google hits for search “Chinese loans for oil”I.e. the countries are getting the UP FRONT money and will payback in future with deliveries oil or natural gas. China does NOT pay more later to these countries as you falsely assert. (That is what UP FRONT means.) You are still making the same false statement!!! I never said that the 10 billion dollar loans to Venezuela and Brazil would supply all of China’s future needs. Thus, there is no math to do. Also you seem to be forgetting that China produces a higher percent of its own oil than the US does. (imports a smaller fraction). You are falsely putting words in my mouth – trying to make it look like I stated a falsehood AS YOU DID by repeating insisting that China was not paying upfront and would need to pay more in the future as oil prices increased. I admit, now that you are shifting focus away from the already signed loans for oil, that if China is not able to lock up all of its future needs it will need to pay market prices for oil. China has a lot of money left with which to lock up more future delivers and is very anxious to spend dollars in their reserves while they still have value, so they may be able to lock up their future oil needs for more than a decade. This is in sharp contrast to the US, which is both not locking up any future deliveries but also borrowing money from China to buy what it currently needs! Below is the first page of 78 pages of hits. Notice that the third uses my very words “lock up future supplies” This does not mean that deal (OR EVEN THAT DOZENS OF LOANS FOR FUTURE OIL) is supplying all of China’s oil consumption. • Oil deal gets $28b China loan {for} Oil & Gas} - NZ Herald News18 May 2010 ... CARACAS - Venezuela secured a US$20 billion loan from China and agreed to form a joint venture to pump crude oil from a block in the Orinoco ...www.nzherald.co.nz/oil-gas/news/article.cfm?c_id... • UPDATE 2-China signs $10 bln loan-for-oil deal with Brazil | Reuters 200000 barrels per day of oil * Petrobras needs funds to develop costly sub-sea reserves * Similar deal previously signed ...www.reuters.com/article/idUSPEK26898520090519 • China: a new model in overseas oil strategy - China.org.cn 11 Sep 2009 ... The loan-for-oildeals have three distinct advantages for the Chinese: they allow China to lock up future supplies, extend its presence in ... {&Use up dollars in reserves} www.china.org.cn › • China, Kazakhstan, Central Asian, China National Petroleum Corp ...• 16 Apr 2009 ... China has signed three other loan-for-oil agreements with Russia, Brazil and Venezuela this year, taping its $1.95 trillion foreign-exchange ...www.oilandgaseurasia.com/news/p/0/news/4604 • Chinese Oil Company Gets $30 Billion Loan for Acquisitions ...9 Sep 2009 ... It was the latest sign that Beijing was deploying its vast cash reserves to ensure that its economy had the resources it needed to keep ...www.nytimes.com/2009/09/10/.../10oil.html - • China inks 'loan-for-oil' deal with Kazakhstan - China - World ...18 Apr 2009 ... This is the four deal signed by China since February offering loans and investments totalling $46 billion to four countries in exchange for ...timesofindia.indiatimes.com/...loan-for-oil.../4418468.cms • China loan turns Russian oil east*** - Asia Times Online :: Central ...24 Feb 2009 ... The loan and oil-supply agreements implement the inter-government ... "We believe that two options are possible: greater [Chinese] access to ...www.atimes.com/atimes/Central.../KB24Ag01.html • TIMELINE-China signs $45 bn in loan-for-oil deals since Feb | Reuters 7 May 2009 ... For related story see CHINA/LOANFOROIL (ANALYSIS), or [ID:nPEK308883]) May 7 (Reuters) - China has signed five loan-for-oil deals since ...uk.reuters.com/.../idUKHKG5851620090507 - Reino Unido • Brazil sells oil to China, expects $10b loan 20 Feb 2009 ... Brazil sells oil to China, expects $10b loan. (Agencies) Updated: 2009-02-20 11:38. Brazil signed an agreement on Thursday to supply China ...www.chinadaily.com.cn/bizchina/.../content_7496823.htm Note that oil (of same grade) is fungible. Thus, the actual barrel of oil being used to re pay a loan to China may not actually go to China if due to lower net shipping cost, China or the producing country, can sell it more locally and with the money of the sale buy equivalent oil nearer to China. ***Billy T comment:This opening a market for its oil and gas to China instead of EU is extremely important, and not much discussed. IMHO, Russia also expects the dollar to collapse, and both US and EU to go soon thereafter into deep depression. So for the same reason that China is trying to rapidly convert to a domestic based economy Russia is trying to convert to an eastern market. Both fear that their current markets will be in depression and not able to buy their exports. Russian 48 inch natural gas pipeline from the Siberian gas fields is now at the Chinese boarder, waiting for China to finish the internal line to the coastal cities. Like much of the world in China too Natural gas is displacing oil. Thus with huge reserves still China may be able to lock up much of the world's proven oil supplies and meet it oil needs for the decade or so it requires to switch to nature gas and electric vehicles - already via BYD a world leader in Li-ion Batteries. China also controls ~95% of the world's supply of Rare Earth elements, some of which are essential for the batteries and magnets in motors these electric vehicles need to be light and efficient: "Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota's plans to boost the car's fuel economy." From: http://www.reuters.com/article/idUSTRE57U02B20090831 They are needed for magnetic levitation trains too. - There is a reason why China has the only one in the world in routine commercial service. The hard drive in your compute uses a neodymium magnet and China has announced it will be cutting exports in half, and probably ceasing entirely soon as internal demand is rapidly growing. China has Uncle Sam by the balls in more than one way. (Financially, Rare Earths, and locked up oil and mineral supplies)
Instead of the usual loans for oil etc. sometimes cash rich China just buys: "Sinochem Group, China’s biggest chemicals trader, agreed yesterday to pay $3 billion to Statoil ASA for 40 percent of the Brazilian offshore Peregrino field." From:http://www.bloomberg.com/apps/news?pid=20601087&sid=aw8PzaedBooU&pos=3 That field is projected to produce 100,000 barrels/day for 30 years {3.07B was actual price} Earlier this week China bought seven electric facilities in Brazil for 3.097 billion. China is spending its dollars ASAP for energy, minerals and food farms. Last year China loaned 10B for 200,000B/day of Brazil's oil- Paying less per barrel now because as owner China will have the production costs, not just get oil with no more cost. ElectricFetus's claims are still false. See prior post.
What about the fresh water problem? it take 20 gallons of water to produce 1 gallon of ethanol, seems there are already major problems around the world because of lack of fresh water.
And perhaps you don't know that the global economy is more complex then simple fixed loans! By the way how much oil does china get out of this, the vales you have been giving back aren't very encouraging to begin with. So? I'm not comparing the US to china am I? I need to put no words in your mouth, your claims are crazy, predictions based to aggregations extrapolation. China will not be able to acquire its oil needs anymore then the US did when it financed oil development in the middle east in the 50-60s. These countries change governments, regulate, monopolize, and all bets are off. Lets say you got 9 barrels of oil but you need 10 to keep your economy running, what does this mean, oh yes that your fucked, your still fucked. And this has to do with peak oil how? So? My argument is that china is going to suffer when oil prices go up dramatically from peak fallout, your argument seems to be the china will crush the US if not the world in the years and decades to come, these arguments have nothing to do with each other and don't even counter each other. As for magnetic levitation trains, air cushion trains would be cheaper.
Your talking about corn ethanol, not cellulosic ethanol, heck algae fuel can produced off of sea water and waste water.
Jesus, Billy T, tell me are the Chinese the Borg, are they a singular mind entity, fuck Sinochem Group is a company that not under the direct control of the Chinese government! Companies buy and merge and grow everywhere but when chinese companies do you think that means the Chinese government has direct power over all those resources?
Certainly the global economy is very complex, but we were NOT discussing that. I was correcting your erroneous statement that China was not paying up front for a lot of its future needs of oil and minerals. I had said China was making loans which would be paid back by delivery of these materials. Your “global economy is complex post” is another nice try to duck and switch the subject. You could have been done with this discussion if you had simply admitted your mistake and thanked me for setting you straight. That is what I always do when corrected -for example, only two days ago here: http://www.sciforums.com/showpost.php?p=2547324&postcount=76 I made no such predictions, (another duck and switch). Again you are putting words in my mouth. Here is what I actually said: I will add now that China is spending a lot of money, on the order of 10 billion dollars each month, mainly in loans for future oil, gas and mineral deliveries. 10 billion ain’t what it useto be but still buys a lot of oil. Note also they are paying less than $50/ barrel as receiving country get money now and delivers the oil (on average) at least a decade later. (“Time value of money” makes the current cash worth more) Thus, assuming at least half of China’s 10 Billion is spent on oil contracts, $5E9/50 = 1,000,000,000 barrels each month China is “locking up.” That is 33,000,000 B/day so it is true that the two contracts for 200,000B/day from each Brazil and Venezuela I specifically mentioned is just a small part of the total. But there are many such contracts. For example half a dozen with Venezuela alone or the just three day old purchase of a 100,000B/day Brazilian oil field that was owned by Norway. Read some of the 78 pages of Google hits on search “China’s loans for oil” to see that there are dozens of such long term contracts AREADY existing. No you need to buy 10% of your oil needs in the open market. US will need to buy about 70% of its LARGER needs there (assuming can produce 30% itself). Will hit US’s “suburban infrastructure” very hard. I have already stated this: Note too that is the SECOND time I did NOT say China was locking up ALL of its future oil needs. Please stop putting words in my mouth which are exactly the opposite of what I have said. Quite a lot! You do understand do you not that “peak oil” DOES NOT imply that the world will use up all the oil one day. It only implies that the price of oil will dramatically rise so that some current uses will no longer be economically feasible. Thus, the discussion of “peak oil” is really a discussion about the future price of oil and the ability of various competing nations to buy it. Here China has a great advantage over the US. Not only does China have huge financial reserves and essentially no external debt, but also China has paid in advance for much of its oil needs for the next decade at today’s prices. Also, before the price doubles, China will up the value of the Yuan wrt the dollar so it buys more barrels of oil than it can now. A decade should be enough for China to switch to natural gas and electric cars for mobile fuel needs. Also China is developing a lot of public transport including high speed trains. (Already Southern China Airways is in economic trouble as the new train line is much cheaper and equally fast, or faster between city centers, for several cities these trains now serve.) Trains are energetically much efficient people movers than airplanes are. China is preparing for the era of high cost oil. The US is not.
less then 1/10 their demand is not "a lot", as for other minerals I'm not discussing that, never was. No its the same subject. Your the one mistaken. China won't have hagged its demand, world oil prices $100, $150, $200+, will hurt china dearly, they have hedge not nearly enough to match their ever growing demand in financing that they don't have to pay for directly, and as long as its oil not under their direct government control its going to vary by market prices. Wow, your an asshole, what a fool to think you actually know something, what an asshole to try make everyone else believe the same thing. Investment cost does not work like that, chinas invest in a percentage of stock and development for say Venezuela oil reserve mining, that means that as Venezuela produces oil china will get back some of the profit, assuming Venezuela does not in a future date say "fuck you, we are nationalizing, we want to renegotiation, we hold all the ards now that oil prices are so high" as many countries have throughout history. If china buys that oil they get it at a reduced price only if your assume the Chinese government directly controls that profit, which they don't, Chinese corporations do and they while profit by making china pay a arm and leg just like any American corporation does to the US. As I demonstrated the oil does not even calculate that way, you do not take into account contract changes, indirect control, indirect return of profits, and the universal greed of business men over their fellow countrymen, be them Chinese and not the fucking borg. Chinase share of oil or any other mineral as you prance on about its no more beneficial to china then all the US shares of oil and other minerals are to america. Why don't you do the same google search on US mineral investments? So? Not arguing against that, nor does it have anything to do with my argument that china will hurt from peak oil, end of story, what countries will hurt more or less is all depend on their income, china is certainly a very powerful country financially but china is also on a political precipice in that the only way to keep their people appeased is to keep the economy growing at extreme rates, any large distortion in their economic growth could cause massive political fallout from a population that already rich enough to question their leadership. It does not need to be "all", I'm arguing they aren't locking up enough and that they physically can't. Oh I'll grant you that but I was never talking about US, just China, chinas preparations won't be enough.
Here is an example of China's mineral hoarding: " Officially, China claims to have roughly a quarter of a million tons of copper - valued at $1.3 billion. But, "official reports" from China are rarely based in reality. There's almost 4 times that much copper sitting unreported in Shanghai warehouses. It's a vital component in China's attempt to establish a reliable electric grid across the country. The metal is already up over 110% this year and this is just the beginning. " China expects the dollar to crash and is spending them from reserves for real assets ASAP. Quote from: MoneyMorning's daily Email to me today. Back up (give Ref) for your post 55 claim: "less then 1/10 their demand is not "a lot".." (I don't think you can as I think it too is false.) Reason I think that must be false also is that until about three (or four?) years ago, China was a net exporter of oil.* They still (2009 data from The oil drum) produce more than half of their current needs internally. Their needs are much smaller than the US's needs. Thus when they lock up approximately 1,000,000,000 barrels more of oil each month (supporting data in prior post) it is much more than 1/10 of their imported oil needs / market demand. BTW, calling me an "asshole" is not much of an argument - have you been reduced to that by lack of facts to support your false and often repeated claim that China will need to pay more later for the loans for oil deals. For example: In post 42 you falsely said: “ No, they will have to pay future prices, china has not paid in "full up front" …” And in post 36 you falsely said: “when oil prices go up they will still have to pay higher and higher prices, unless and there is no fucking way, they have set prices contracts extended for decades! …” It is these false statements, now in blue, I have been trying to get you to retract. Again if you had been smart, you would have thanked me for the correction and last 10 posts (including Kmguru's 57, and X-man2's 59) would not have rubbed your nose in these errors. --------------------- *China had a very low price on gasoline at the pump. In addition to official exports, many who lived near the border bought at retail and sold on the other side of the boarder. That has stopped as China has raised the price at the pump.
From quote in Kmguru's post 57: "China Development Bank announced that it was investing $50 billion to buy 6 billion barrels of oil reserves in Nigeria." To put 6 billion barrels of oil into perspective, that is more than in any of Brazil's newly discovered deep water fields! "That is only 8 dollars per barrel - an exceptional deal for China but probably will also require China to pay for both extraction and to build facilities to deliver it to the port China will build, etc. That is the usually case when China gets African resources as Africa has limited infrastructure. In their deal with the Congo for many years of copper, that is all they are paying. (Zero dollars for the copper ore) - I.e. only making port and railroad into eastern Congo for the copper. Perhaps China will build a smelting facility too to reduce the shipping cost. - I forget the details.
I find BillyT's post educational and even interesting,his post are of facts.Unfortunately some people namely Americans are having to face the US isn't any longer the big dog.We the US have made one after another after another poor financial decisions for short term greed resulting in running the US into the ground.Many or most Americans will not or cannot accept the US demise.All we have left is our Military,thats it! The powerful in the US are responsible for all this and as much as you hate it it's the truth.Might as well get used to it or move to a Country(s) where they have their act together.I hope to see more of BillyT's post cause even though as an American I hate all of this,at least I can watch it unfold in real time without waking up one day and saying what the hell happened.Just saying.........
thanks. A strong military can do a lot of things, when the victim does not have ICBMs and subs that can launch nuclear weapons. One thing it can not do, even in a weak country like Iraq or Iran is keep oil flowing thur pipelines from the oil fields to the port. It is far too easy for one or two men under the cover of darkness to blow up pipelines. The output from Iraq is just now beginning to get back to the pre-invasion levels. War with Iran would send oil prices to near $300/ barrel - destroy the US economically; to $600/ barrel if their rockets can set fire to the Saudi oil port facilities or sink a big tanker in the straight of Hormuz. (block oil export from the gulf for at least a month). The Saudis and Iranians hate each other already for religious reasons. They will do these things even before one rocket is fired at Israel. Years ago I suggested, only half in jest, to the CIA in an open post here that they should watch the Chinese restaurants in coastal cities of Iran. The Chinese had sold their "silkworm" cruise missiles to Iran. Iran has several islands in the straights. I suspect some have horizontal tunnels with silkworms in them. In principle, but highly unlikely in practice, China still is in control of how and when they can be used. There are Chinese with the missiles. These Chinese will be buying their food in the coastal mainland restaurants as often as they can.
