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On Iranian Sanctions And Chinese Energy Needs

Tyler Durden's picture




 

US reliance on oil imports as a share of consumption is gradually declining; but China's, however, is rising and is now higher than the US. As JPMorgan's Michael Cembalest notes, China now has the world's largest new car market and most extensive network of superhighways - which given the lack of a viable, affordable electric car - means fossil fuel consumption is expected to continue to rise. The trends that lead to this inexorable rise have critically important implications for the West in the ongoing containment of Iran's nuclear ambitions. Unfortunately for the West, the prospects for cooperation on sanctions appear dim as the following nine points (on China's relationship with Iran) should make clear.

 

Via JPMorgan

 

As shown below, US reliance on oil imports as a share of consumption is gradually declining. China’s percentage, on the other hand, is rising and now higher than in the US (in dollar terms, US imports are higher but they should converge in a few years)

 

The penetration rate of passenger vehicles in China is considerably lower than in other countries. China’s per capita GDP is lower as well, so the gap will not close overnight. The second chart below gives a good indication of the potential rise in automobile use in China over time. These trends are part of the reason why we do not expect reduced US imports to result in lower oil prices.

 

Vaclav sees these trends as important, since they affect prospects of China co-operating with the West on containment of Iran’s nuclear ambitions. Unfortunately for the West, the prospects for co-operation on sanctions appear dim. Some things to keep in mind about China’s relationship with Iran, described in greater detail in a 2012 Rand Institute report:

  1. Iran and China share a deep ambivalence about the West given their prior experiences as semi-colonial states in the beginning of the 20th century. The US supported a coup against a popular Iranian leader in 1953 (and also influenced other political transitions), and Communist China was under U.S.-led international sanctions for most of its existence.
  2. China extended recognition to Iran’s Islamic Republic only 3 days after its founding, and improved relations with Iran through arms sales during the Iran-Iraq war (small arms, ballistic and anti-cruise ship missiles)
  3. China became a net oil importer in 1993, and further strengthened ties with Iran. Once China was accepted into the World Trade Organization in 2001, the West lost the little leverage it had over Sino-Iranian ties.
  4. From 1985 to 1996, China provided Iran with civil nuclear technology and machinery, assistance in uranium exploration and mining, training for nuclear engineers, and instruction on the use of lasers for uranium enrichment. China ended its direct support for these nuclear programs in 1997. Chinese design and technology are seen in Iranian ballistic and anti-cruise ship missiles, anti-ship mines and fast attack boats.
  5. For the last two decades, China has built railroads, bridges, dams, ports and tunnels throughout Iran. In 2007, China became Iran’s largest trading partner, and the two countries announced plans to broaden bilateral trade to $100 bn per year by 2016.
  6. The two countries formed a joint oil and gas committee to broaden energy cooperation. China is the most important investor in Iranian exploration and extraction operations, and has been selected to develop the Azadegan and Yadavaran oil and natural gas fields, and the South Pars field. Iran is the largest methanol exporter to China, displacing Saudi Arabia.
  7. Iran used to be vulnerable to refined fuel sanctions when it imported 40% of them; China helped Iran build out its refining capacity, and Iran is now a refined fuels exporter.
  8. China is paying Iran in rice and medical/engineering supplies (and cash) in exchange for Iranian oil, and a Chinese shipyard delivered the first of 12 supertankers to Iran, giving it extra capacity to transport its oil to Asia.
  9. A couple of quotes on the geopolitics of all of this, from the Peking University School of International Studies and Renmin University: “It is beneficial for our external environment to have the United States militarily and diplomatically deeply sunk in the Mideast to the extent that it can hardly extricate itself”, and “Washington’s deeper involvement in the Middle East is favorable to Beijing, reducing Washington’s ability to place focused attention and pressure on China.” [Rand report]
 

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Tue, 10/23/2012 - 20:05 | 2914519 VonManstein
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metals acting stranger thn usual this PM.

that could be it

Tue, 10/23/2012 - 20:30 | 2914565 DoChenRollingBearing
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PM action (non-trader Bearing, physical buyer only) sees nothing strange in the the PM markets now (8:26 PM US ET).

Iran producing and sending their oil to China?  Hey, I have no problem with that.  I follow Exxon's very logical appraoch I read about a couple of months or so ago: It's the total worldwide production (flow) that matters, not ownership of the resource!

The more the world produces, the better for everyone!  The logic is simple, think about it.

Tue, 10/23/2012 - 21:02 | 2914632 VonManstein
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by "it" i meant a bottom. Asians loving these prices tonight

Wed, 10/24/2012 - 03:54 | 2915134 AldousHuxley
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TO CONTROL CHINA:

 

  1. military influence (US BASES) over China Sea
  2. control oil price
  3. trade in dollars

 

That's how US gets to live large while making nothing folks.

Most of you are just doing busy bull shit work.

 

Wed, 10/24/2012 - 09:04 | 2915460 SWRichmond
SWRichmond's picture

Wanna know who the low price of gold benefits?  CHINA.  Why?  Who is the largest national accumulator of gold?  Who is using gold to buy Iranian oil in order to bypass US sanctions?  Wanna know who will dump Treasuries the minute gold soars?

Wanna know why your sons are being mutilated in the middle east?

Wed, 10/24/2012 - 22:39 | 2917620 berlinjames02
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Interesting factoid I heard...so take it FWIW:

90% of Chinese oil imports are transported by sea through the Straits of Hormuz.

I don't know if mining the Straits would help or hurt the Chinese. Regardless, they would need some Blue Water war ships to protect the tankers to keep the supply flowing to China.

Tue, 10/23/2012 - 21:51 | 2914691 DoChenRollingBearing
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I see a junk. 

EDIT: Make that 2 junks!

The logic IS simple.  Here's a reference making my point about Exxon's thinking re world oil production:

http://tinyurl.com/9pp6569

Tue, 10/23/2012 - 20:09 | 2914526 Alea Iactaest
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JPM saying oil consumption up due to increased auto demand in China. Talking their book? Not that it matters insofar as China is forging ties with all its raw material producers. And laying the framework for a post-USD world in the process.

Tue, 10/23/2012 - 23:40 | 2914880 CrashisOptimistic
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"US reliance on oil imports as a share of consumption is gradually declining . . ."

 

THIS IS THE KIND OF BULLSHIT FROM ANALYSTS THAT IS ENRAGING.

Who in the FUCK said this was continuing?

Here's the fucking curve, and there were probably JPM pimps celebrating in 1985, too.  Just as they are celebrating a tiny little 3 year uptick now.

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus1&f=a

Wed, 10/24/2012 - 00:15 | 2914948 SelfGov
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Oil imports as a share of declining consumption would have been a better way to put it.

 

Either way, yes a 3 year uptick that is already beginning to level out.

Tue, 10/23/2012 - 20:17 | 2914538 max2205
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The axis of Evil.....

Tue, 10/23/2012 - 20:18 | 2914540 Buckaroo Banzai
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Tyler for the love of Pete please stop with these pop up ads, they are a disaster on the iPad.

Tue, 10/23/2012 - 20:24 | 2914551 Bennie Noakes
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Are you implying that ZH is not an AAPL-friendly site?

Tue, 10/23/2012 - 20:47 | 2914599 scatterbrains
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speaking of AAPL if you drop back for a minute and look at the weekly long term chart it looks like a perfect blow off bubble top if ever there was one.. and it's RSI signal should have all those long only hedge funders smoking the crack pipe tonight.  The only question is will 500 hold at this point..

http://fiatflaws.blogspot.com/

Tue, 10/23/2012 - 20:20 | 2914547 Messianic
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I think the rise of India as a major power will dwarf China within 5-10 years - Demographically and politically their growth is less inhibited than that of China. But I tend to find less quality analysis on India's geopolitical influence than that of China...

China has largely succeeded in spite of itself; it constantly manipulates, interferes, and wastes tons of resources on silly governmental projects.

Tue, 10/23/2012 - 20:27 | 2914561 Matt
Matt's picture

And India is different how? What exactly do you see that tells you they have better demographics and a better political system? How is India better than China in regards to manipulation, corruption, and government malinvestment?

Tue, 10/23/2012 - 20:41 | 2914584 Messianic
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1) India never took efforts to limits its population growth, so their civilization's demographic peak (i.e. the point at which you have a ton of prime-age workers before your civilization shifts to an older, less productive society) hasn't occurred yet and won't occur for some time. China's is happening right now (if it hasn't already).

2) India is far less uniform and centrally controlled by virtue of its sheer diversity and the incapability of government to manage 30+ official languages and local cultures - diversity has a strong correlation with higher growth rates across history. Uniformity tends to breed parochialism.

3) The Corruption/Manipulation/etc part is pretty difficult to measure, but India's central government and local governments do far less with regard to trying to force utopias to happen and haven't excessively spent on needless infrastructure. Perhaps they've underspent in that area, but that's better than the alternative.

This is a conclusion i've come to over a long period of time and from studying MENA/Afghan/Indian growth for years during my undergrad, and from a number of other readings...these are the easiest links to provide:

http://articles.economictimes.indiatimes.com/2012-04-11/news/31325183_1_creative-destruction-prosperity-economic-historians (one of the scholars in the talk in my second link, but a newer article than most of his material and a bit more condensed as opposed to listening to a very boring series of talks for 90 minutes) & http://www.cato.org/event.php?eventid=8045

Tue, 10/23/2012 - 22:55 | 2914822 jeff montanye
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imo your opening sentence is too extreme.  closer to reality would be india has taken less strenuous efforts than china to limit population growth but india's efforts have included cash bonuses for fewer children, near forced sterilizations and limits on number of children officials of various states may have:  http://www.berlin-institut.org/online-handbookdemography/india.html

p.s. and in the original post above, is anti cruise ship missile the best term?  wouldn't anti ship cruise missile make more sense?

Wed, 10/24/2012 - 17:00 | 2916802 Matt
Matt's picture

As pointed out by another poster, India has, in the past, attempted programs to control population growth. 

The diversity can be good, but India has had some severe problems with tensions between groups in the past; while government-induced oppression is less likely than in China, spontaneous outbreaks of violence can occur.

As for malinvestment, didn't India just finish a massive 8-lane superhighway system throughout the country, in an effort to get more people into cars? When what they really need, is investment in the electric grid. Also, seems the justice system in India is quite overwhelmed / corrupt with severe backlogs going into the decades, people paying their way out of trouble, and turbo-trials lasting something like 45-seconds.

Trying to compare whether India or China has a brighter future is certainly challenging. 

Tue, 10/23/2012 - 20:43 | 2914590 Jack Burton
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Good point Matt! I believe India has severe structural problems. If anything, the Indian miracle is in trouble. In a decade I can see India in crisis. China may waste money on projects like roads, bridges, ports, rail roads, air ports, huge new cities, canals, dams and the like. Some of this may be waste, but if in the end you have all these hard assets, I would say it is not all waste.

I read nothing to indicate that India is taking off to surpass China. Every item an American buys except food seems to come from a Chinese manufacturer. Not so for India!

Tue, 10/23/2012 - 21:46 | 2914717 Ness.
Ness.'s picture

China has been in the "accumulation" stage for awhile.  

 

With time and patience the mulberry leaf becomes a silk gown.

Tue, 10/23/2012 - 20:21 | 2914548 stocktivity
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China may keep a floor on the price of oil but if the economy does fall off a cliff, the price of oil will still drop with it. What will be interesting will be all the hundreds of hedge funds that bought iApple and what they will do if this selloff continues. Who will buy all these shares once the mass dumping starts? It might be getting close to the time to get out the popcorn and pull up a chair. The Bernanke must feel like a cornered mouse.  Could we see QE 3 1/2 soon?

Tue, 10/23/2012 - 20:26 | 2914557 Eally Ucked
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Us reliance on import oil is falling only because deep recession, those graphs are good for 2009-2012 but if anybody has any hope for US reemergence from it those graphs will change very fast and then what?    

Tue, 10/23/2012 - 20:28 | 2914562 Zgangsta
Zgangsta's picture

WTF is up with these daily melt-ups on the Nikkei?

Tue, 10/23/2012 - 20:53 | 2914613 Dr. Engali
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Their central bank is printing and directly buying equities.

Tue, 10/23/2012 - 20:43 | 2914588 bxy
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Is it that hard to see through this electric car nonsense?????  Do people not realize that we get the vast majority of our electricity from fossil fuels?

Tue, 10/23/2012 - 20:46 | 2914598 Jack Burton
Jack Burton's picture

Yes bxy, it amazes me that people think electricity is an alternative to fossil fuels. In most cases you burn coal or natural gas to get electricity.

The energy in versus energy out equation is not very favorable when you must build a power plant, burn the fuel, transport the electricity on power lines and get it to an outlet that you plug a car into. Versus just putting that same energy of fossil fuel into you tank.

This electric car thing is a hoax. Unless you charge your car from wind or solar electricity, you are just another fossil fuel burner.

Why do articles like this imply that electric means "Non Fossil Fuel?"

Tue, 10/23/2012 - 21:42 | 2914712 goodrich4bk
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First, see my reply above.

Second, even using fossil generated electricity is cheaper than gasoline.  Run the numbers.  An electric car costs about 5 cents a mile in electricity use at $.10 a kw.  Compare that to an ICE engine at 25 mpg (avg best fleet mileage) and $4 gas: 16 cents a mile.  The ICE engine costs over three times to run as the electric motor, and that's not counting the savings on oil changes, plus, fuel injectors and all of the polution control maintenance.

 

Wed, 10/24/2012 - 00:54 | 2914994 Flakmeister
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For starters compare efficiencies of an ICE to that of a typical modern FF based power station...

Next take into account the increased use of renewables as a fraction of capacity....

Wed, 10/24/2012 - 06:34 | 2915209 Acet
Acet's picture

Plenty of countries get most of their energy from other sources, mostly nuclear and hydro.

That said, electric cars only make sense together with nuclear (if safe designs like pebble-bed reactors became widespread, that would be perfect) or fusion (which is not there yet) since the other solutions cannot produce enough energy to feed tens or hundreds of millions of electric cars.

The massive strategic advantage of electric is that compared with any other resources it's effectivelly unlimited since as long as the Sun keeps working, we can keep making electricity (should be good for another 6 billion years) and that it can be produced in any country in many different ways. Furthermore, it can be produced in central, high-efficiency plants and easilly distributed, which is why even if we replaced all fuel powered cars with electric cars + oil burning power plants, it would actually use less fuel and be better for the environment since large power plants are more efficient than the much smaller car engines and there are many economies of scale such as with fuel delivery or with regards to scrubbing nauxeous components from the resulting smoke (imagine replacing millions of catalytic converters with a couple of large and more efficient scrubbers at the power plants).

The problem with electric cars at the moment is that electricity storage still sucks - electricity is still stored in batteries that are too large, heavy and made from expensive and not very common elements. Things like supercapacitors might help solve this.

Tue, 10/23/2012 - 21:02 | 2914633 Messianic
Messianic's picture

It's true, and its moronic that people don't simply look beyond step 1.

That said, there are some really good uses for electric vehicles in a limited capacity. I'm actually fascinated by the Vectrix (all electric scooter/low power motorcycle) because it is a bit better of an application of the technology than the Volt.

But the money we pour into electric cars is pointless. The market needs to figure out where those kinds of technologies need to be appropriated, particularly before politicians start spraying money all over it.

Tue, 10/23/2012 - 21:56 | 2914737 goodrich4bk
goodrich4bk's picture

It is not pointles because here is "the point":

avt.inel.gov/pdf/fsev/costs.pdf

This is a chart that compares the cost of electricity vs. the cost of gasoline per mile in electric vs. ICE engines.

This does not include the hidden costs of our Middle East wars, veteran benefits or interest on the debt we incurred fighting those wars.  It does not include the tax subsidies we give oil companies.  It does not take into account that oil is becoming more difficult to find, that China's rising use will make it more expensive for us as competing customers, and that alternative source of electrical generation ---- natural gas, nuke, solar and wind --- have NONE of these costs or problems.

Yet even ignoring all of these hidden costs of oil, electric motors are so efficient that they carry you THREE TIMES THE DISTANCE per dollar than do ICE engines --- and that is with a 25 mpg ICE engine at $3.80 a gallon vs. $.10 a kwh.

Granted, the technology to implement this on a large scale is not yet there.  But in 1960 when Kennedy committed us to landing on the moon by 1969, the technology wasn't there yet, either.  But we did it.  I have no doubt we can convert to electric motors within ten years if we put our minds to it and our politics aside.

The cost of a 100 mile trip by quiet electric car in 2022?  50 cents.  The price of telling the freaks in the Middle East they can drink their fucking oil?  Priceless.

Wed, 10/24/2012 - 05:28 | 2915172 falak pema
falak pema's picture

+100 

We have to keep going down the alternative energy road, until we hit a tipping change moment where producing renewable, stockable and transportable energy becomes grid compatible with oil.

Just to come back to the other products that oil makes; aka petrochemicals and aviation fuels, which electricity cannot replace (the mega road truck haulers and airplanes are two transport segments where electricals cannot replace oil).

Synfuels based on coal liquefaction, if it is LIMITED to middle distillate production, aka heavy natphta-kerosene cuts, could be a replacement in the USA/Europe for imported oil. Remember, as Flakmeister pointed out, the S. African Sasol syn fuel program shows us that TOTAL replacement of gasolne + heavier oil Fuels markets by coal is impossible as the Coal to liquid yield is too low. But it could service the kerosene C7 cut for jet engines, and also, along with nat gas, the petrochemical plants that work either on nat gas (LNG or pipeline) and/or on naptha oil cuts (C6 oil fraction).

The global energy road to future will have to get as diversified as possible to allow all natural sources to contribute, as the energy crunch from "peaked lo-cost oil" will be huge!

The biggest challenge to the new industrial age of the developing world.  Keep blowing that alt-energy bugle horn! 

One impediment to investment in optimal refinery reconfiguration, in Europe at least, is the reluctance of Oil majors to invest in the "dodo" market of eurorefining from their greedy perspective; witness the Petroplus debacle. These global shills couldn't care less of Euro or US local market needs, they prefer making big money upstream in their extractive empires of the neo-colonial economy (Nigeria-North pole- you name it-oil-kurdistan), than in less attractive welfare state economies of first world.

Tue, 10/23/2012 - 21:35 | 2914701 goodrich4bk
goodrich4bk's picture

And you believe this will always be the case ---- why?

MIT has recently developed a new moten salt nuclear reactor that will eliminate 98% of the nuke waste created by current designs and is entirely "meltdown proof".  If successful, you'll see nuke plants grow like mushrooms.  Improved battery life or an infrastructure of quick-replace battery "stations" will mean the electric cars will beat ICE cars on every metric: torque, speed, mileage, durability,

Try to think outside the box, man.  The world is not standing still.

Tue, 10/23/2012 - 22:03 | 2914747 ebworthen
ebworthen's picture

Corrosive salts, and a high level of toxic tritium production.

If they can do it safely in an earthquake zone not a bad idea, but...

Tue, 10/23/2012 - 22:13 | 2914761 wretch
wretch's picture

Nuclear reactors make fuel for very big bombs.  That's their raison d'etre.  On the side, they also lose money and wreak havoc on the living.  Meltdowns of existing reactors will probably extinguish life on the planet.

This is not Star Trek.  MIT will not save us.  In fact, blind technological allegiance got us here.

"Intellectuals solve problems; geniuses prevent them."  If only we could all be Einsteins.

Tue, 10/23/2012 - 23:30 | 2914870 toomanyfakecons...
toomanyfakeconservatives's picture

Nuclear reactors also make electricity, but I don't know of any that produce billions of tons of plastics, rubber, chemicals, and other stuff like oil does.

Tue, 10/23/2012 - 21:54 | 2914734 ebworthen
ebworthen's picture

bxy - don't pop the dream cloud, it's such a pretty dream, and such a pretty cloud.

People can feel really good about themselves in an electric car, despite the fact that they are toting around hundreds of pounds of toxic batteries and plugging into coal, oil, and natural gas fired electricity.

It's about how people feel, not what is real.

The dream is what counts.

Forward!

Tue, 10/23/2012 - 23:41 | 2914892 toomanyfakecons...
toomanyfakeconservatives's picture

I've popped the cloud for a few people. When they realize there is a huge smokestack at the other end of the electrical connection, the smile fades and the dream dies. If they only knew how much oil-based paint, chemicals, plastic, rubber, fabric, and so on was involved in the manufacture of their dream car.

Tue, 10/23/2012 - 20:51 | 2914609 Jack Burton
Jack Burton's picture

As to Iran and China. Given the Chinese need for oil and Iran's need to sell oil. Given China's need for a Middle East friend to counter balance the NATO forces now all over the Middle East, given Iran's need for a friend in the face of NATO threats to bomb and invade them. Given this, it seems China and Iran are natural allies in the face of a war crazed US/Israel/NATO.

After all, China is not invading and bombing all over the middle east. Nor in Iran. Who actually is using military force at will from Afghanistan, to Pakistan, to Syria, to lebanon, to Gaza, to Libya and now to Mali. Yemen and Somlia as well. The US and NATO are like mad dogs tearing and attacking everywhere they can.

Tue, 10/23/2012 - 21:52 | 2914730 Harbanger
Harbanger's picture

Why would China give their Gold to Iran when they can give their USD's to say, Brazil for example.  Or anyone else who will take those useless USD's.

Tue, 10/23/2012 - 22:07 | 2914754 fonzannoon
fonzannoon's picture

I thought the had no USD's? If so then that is a fantastic question.

Tue, 10/23/2012 - 22:26 | 2914778 Harbanger
Harbanger's picture

What do you think we've been buying their shitty products with.

Wed, 10/24/2012 - 00:10 | 2914941 Umh
Umh's picture

They are building infrastructure. Take a look at a map. It's like us with Canada or Mexico. To put it another way they are looking out for their self.

Tue, 10/23/2012 - 21:16 | 2914660 ekm
ekm's picture

I have never read more idiotic stuff than this. Mr Cembalest knows way better than what he is writing and I'm sure he's just writing shit to mislead.

 

There are many ways to control a country but the most brutal ways are the following:

1) Control food supplies

2) Control energy supplies.

 

1) China is self sufficient on food, but has absolutely no food abundance. This is due to lack of efficient farming. Chinese arable land is fractioned between small groups of people. Even Tien an Men massacre was about Food Inflation in China.

2) Controlling oil coming from Saudi Arabia, Iraq and very soon, very, very soon.......Iran, is one sure way to control China.

 

What a freaking piece of turd of article.

Tue, 10/23/2012 - 22:05 | 2914749 cranky-old-geezer
cranky-old-geezer's picture

 

 

Controlling oil coming from Saudi Arabia, Iraq and very soon, very, very soon.......Iran, is one sure way to control China.

Dream on. 

US won't be controlling China nor Iran in the forseeable future. 

Why do you suppose our government has been blabbering on about Iran getting a nuke for what, over 10 years now, with no substantial action to stop it?

Simple.  Our government knows Iran is the line in the sand.  They cross it, and it's WWIII.  Simple as that.

Thermonuclear WWIII by the way.

Tue, 10/23/2012 - 23:16 | 2914851 ekm
ekm's picture

If China were as strong militarily as USA, that would make sense. But, China is nowhere close to being a military rival to USA, yet. Probably by 2050, but not now.

Iran is simply next on the list.

 

Russia showed that they can draw the line on the sand by attacking the country of Georgia. That's why the West is taking it easy in Syria. The fact is Russia has military influence residual from Soviet Union. But, China has close to zero military influence.

Wed, 10/24/2012 - 04:07 | 2915100 Zwelgje
Zwelgje's picture

"Russia showed that they can draw the line on the sand by attacking the country of Georgia."

Wrong! In 2008 Georgia attacked South Ossetia.

Then the Russian Federation stopped Georgia.

Sounds quite different doesn't it? 

Tue, 10/23/2012 - 23:57 | 2914919 Money Squid
Money Squid's picture

A second nuclear war is very not likely. The US has great space, air, land, sea, cyber and financial attack and defense capabilities. The best way to control China is by controlling its money (inflation via the Yuan/Dolla peg), controlling the major oil exporting countries and controlling the routes in which China can send good and receive eneergy supplies. Ever wonder why Obama and Paneta recently stated the US military is being repositioned in the Pacific theater...all around China? Gun boat diplomacy. Remind the Chinese that the US can cut off all air, land and sea routes to starve the country of energy imports. The US is making Iran, and soon China, and offer they can not refuse....because the US is peaceful.

Tue, 10/23/2012 - 21:32 | 2914670 q99x2
q99x2's picture

Gasoline in the CA is too expensive to drive. I'm up to half marathons just to get to where I need to go and back. And when I do drive the freeways are less congested than 10 years ago.

But that is the result of NWO technocrats. When they move on a country they shut down the infrastructure as part of the takeover.

That's ok less smog to jog in.

Let China have the oil. That is my vote.

Tue, 10/23/2012 - 21:48 | 2914723 Harbanger
Harbanger's picture

I'm glad you like it.  If the NWO technocrats shut down the infrastructures before they takeover, then they must be Democrats.  Years of liberal policies, taxes and regulations have put a crimp on California's gasoline supply. Only Hawaii has a harder time obtaining gasoline. They also have one of the highest gasoline taxes in the country. That is why it costs more to fill up in California than it does elsewhere in the continental U.S.

Tue, 10/23/2012 - 23:47 | 2914901 Money Squid
Money Squid's picture

It costs more to fill up in california because of the highest gas taxes, 51 cents per gallon, and the fact that the fucking air resources board (ARB) mandates which additives refiners can use to meet air emission standards rather than letting the refiners use their own blend and compete with each other. Oh, and by the way the fuel additives required by the ARB polluted the hell out of the groundwater, in the groundwater basins, which are heavily relied upon, by the people who need water, to survive, in an area that is practically a fucking desert.

Wed, 10/24/2012 - 08:13 | 2915334 toomanyfakecons...
toomanyfakeconservatives's picture

50,000 less factories certainly cleans up the air a bit, but at what price? Thank you NAFTA.

 

When I talk to people, I often wonder if they remember $.90/gallon gas or even $.30/gallon gas.

Tue, 10/23/2012 - 21:52 | 2914729 ebworthen
ebworthen's picture

The much more pressing demand for oil is FOOD PRODUCTION (yes, I'm shouting).

China is well on it's way to copying all the mechanized advances of the West, and will soon be producing John Deere and Case/IH knockoffs.

Certainly, cars and trucks and rail need oil, but FOOD is the primary need.

Petroleum used not just in tillage, planting, harvesting, transport and processing but essential for fertilizers and pesticides to increase yield/acre.

Killing over food starts much sooner than killing over convenience or cost of a tank of gas in the car.

Tue, 10/23/2012 - 22:01 | 2914743 Zaphod B.
Zaphod B.'s picture

Tyler, what exactly is an 'Anti-Cruise Ship Missile"? Not sure of many ports of call northeast of the Straits of Hormuz....

Tue, 10/23/2012 - 23:40 | 2914891 Money Squid
Money Squid's picture

"US reliance on oil imports as a share of consumption is gradually declining."

 

Now lemme see....when the US economy was rolling imports as a share of consumption were increasing, then as the economy tanked and consumption decreased imports decreased. In 2009 production from the Balkan began to take off so this also help to decrase oil imports. US reliance has nothing to do with it. If the US economy actually began to recover imports would need to increase. One way to throttle back the US ecnomy is to keep the price artificially high, this was supposed to help delay the acknolowledgement of peak earl, but the Chinese and Indians are vacuuming up all the oil. If we could only threaten a major oil exporter with an attack to keep the price high the US might be able to force the Chinese to pay a lot extra then the OPEC oil profits can be deposited in US banks, paid no interest, and used for gambling and shoring up broke-ass banks.

Wed, 10/24/2012 - 00:44 | 2914969 toomanyfakecons...
toomanyfakeconservatives's picture

There you have it... bombing Iran would be the smashing up of a country that, for the most part, China built. I bet their underground bases and weapons are better than you think. Hearing Hillary talking about nukes, Iran, and Israel in the same line made me want to wretch.

 

The U.S. military and the long arm of the law better right the ship and stop the treason before the criminals start WWIII to cover their tracks. JFK warned us and you can't put the cat back in the bag once a real war kicks off. Also, I don't suggest testing Chinese and Russian hardware such as this: http://en.wikipedia.org/wiki/Shkval

Wed, 10/24/2012 - 03:46 | 2915130 onebir
Wed, 10/24/2012 - 03:41 | 2915128 onebir
onebir's picture

I don't know if the Chinese auto penetration rate depicted here is relevant. Most (all?) of the people who can afford cars are urbanites. The cities are already getting gridlocked. Continuing urbanisation will only make that worse.

Cars are definitely perceived as a status symbol. But can that continue to drive demand where the only place to use them is a long car park, and where locals are pushing for air quality improvements?

Wed, 10/24/2012 - 08:08 | 2915322 Aegelis
Aegelis's picture

So sanctions on Iran are our way of 'fighting China' without fighting China.  Our legacy of proxy-wars continue. 

Wed, 10/24/2012 - 09:49 | 2915561 my puppy for prez
Wed, 10/24/2012 - 14:01 | 2916199 Head_Shots_Work
Head_Shots_Work's picture

Holy crap! I won't be taking any long cruises in Strait of Hormuz any time soon!

"and improved relations with Iran through arms sales during the Iran-Iraq war (small arms, ballistic and anti-cruise ship missiles"

Those nefarious Chinese and Iranians - their plan to destroy the western world is to ruin our vacations! This really sucks!

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