Posted on 11/23/2004 12:32:19 PM PST by conservativecorner
SHANGHAI, China -- About a three-hour drive south of Shanghai, along the East China Sea, workers are building 52 gigantic tanks, each capable of holding more than 25 million gallons of oil -- enough to supply every driver in China with gasoline for a month.
The storage tanks will help accommodate China's thirst for oil as it looks to fuel its booming economy. And it has plans to stockpile much, much more.
China, the world's second-largest consumer of oil after the United States, has plenty of cash to secure sources of petroleum and natural gas. But as aggressively as any nation, it is also cutting deals and forging alliances to get the energy it needs.
In South America and Africa, the Chinese government is helping build roads and ports in exchange for oil supply contracts. Beijing pledged to support oil-rich Russia in its bid to join the World Trade Organization as the two countries agreed that Russia would boost its exports of crude by rail to China.
And after a Chinese company's deal to develop an oil field in Iran, Beijing tacitly offered political support for Tehran's budding nuclear program. That put China in direct cross hairs of the Bush administration. The hunt for energy in the former Soviet Union and political hotspots such as Sudan is making China few friends in Washington.
China is "throwing around its economic muscle like crazy," said David Lampton, head of China studies at Johns Hopkins University's School of Advanced International Studies. "The Chinese are throwing incredible amounts of money to lock up long-term (energy) contracts. ... It's going to be a real topic of U.S.-China relations."
Some Chinese officials dismiss the threat of increased friction over energy.
"Although oil trade plays an important role in every field, it has a limited influence in Sino-American relations," said Han Wenke, vice director of the energy institute affiliated with the National Development and Reform Commission, an important regulatory agency of the Chinese central government.
Beijing's pursuit of energy is all about maintaining the nation's strong economic growth, which Communist Party leaders believe is the linchpin to social stability and ultimately their legitimacy. Oil and natural gas, and lots of both, are needed to keep factories running and to power all the new cars hitting freshly paved streets.
Only a decade ago, China shipped out more crude than it imported. This year it has sharply reduced exports to meet domestic needs -- and it is now the world's second-largest importer of oil after the United States.
Although crude prices have settled back in recent days to less than $50 a barrel, China's rapid economic expansion is almost certain to add pricing pressure over the long haul. The country accounts for about 6 percent of world consumption; that's projected to rise to more than 9 percent in 2020, as Chinese oil fields dry up. (One-fifth of global oil demand comes from the United States.)
Wary of its increasing reliance on a few foreign oil suppliers, China has formulated a "go-out" strategy to diversify and expand its energy capabilities. The plan involves cooperating with 27 countries for oil exploration.
Beijing also is pouring money into developing its own pipelines and liquid natural gas terminals and launching an array of energy conservation programs at home, including imposing fuel economy standards on new cars.
One of China's biggest and latest energy ventures involves Iran, which the United States has sought to isolate for its alleged development of a covert nuclear arms program.
Late last month, Chinese and Iranian officials signed a preliminary deal in which China's Sinopec Group would develop Iran's Yadavarn oil field in exchange for Sinopec agreeing to buy millions of tons of Iranian liquefied natural gas. The Chinese government media valued the deal at $70 billion.
each capable of holding more than 25 million gallons of oil -- enough to supply every driver in China with gasoline for a month.
That'll make a hell of a target.
for security reasons i guess.
"Strategic petroleum reserve."
I think the Chinese have decided that he who has the fuel will make the rules.
They are putting huge berms around the tanks so when the tanks collapse the oil will be contained until they can mop it up with sponges. Absorbent, yellow, and porous. Otherwise they are setting up yet another colossal potential catastrophe.
In short order, the price of oil is going to go through the roof. But, of course, as it rises it brings into feasibility a huge array of alternative energy sources, some of which have yet to see the light of day (except in science fiction publications).
Any agressive move (Taiwan?) that China makes would almost certainly lead to some kind of embargo / boycott. Having this oil would enable China to continue with its plans in spite of any "temporary interruptions".
No kidding, of course even in an all out war the United States would be accused of creating an Environmental War Crime if it ever attacked the reserve.
I'm not sure if I"m kidding or not.
Makes sense for the chinese, but it will pospone its invasion much much more which is good news.
Their reserve is above ground.
If the fire is hot enough, there will not be much pollution, well not from the oil, anyway. Know what I mean? :)
Why the USA hasn't doubled the size of our SPR is sheer stupidity.
In the worst case scenario, if China attacks Taiwan, we could hit their reserves with conventional bunker busters.
The fact is China will be our main competitor and we should expect this and hope we can coexist. But the PRC has become a fascist state, the economy is run by the military and they will expand their military presence to protect their expanding global interests. We must maintain our strength and push for human rights reforms in the PRC, and accept them (with caution) as trade partners.
This is a primary reason why a Republican strong on defense must win the 2008 election. He or she must continue the tone Bush has firmly set.
Who's there?
Berm.
Berm who?
By contrast, the US Petroleum Reserve is at 670 million barrels (there are 42 gallons to a barrel of oil).
I agree that it should be higher, and I believe that ANWR oil should be mandated to increase its size. ANWR oil should only be for sale in the US, and a large portion therefrom should be targeted to the west coast, which pays higher prices for gasoline and oil.
One problem, though, with increasing the size of the SPR is that the huge salt caverns we use to store our reserve make it incredibly cheap to do so. The SPR site says how much cheaper - something like 90% cheaper:
---Salt formations offer the lowest cost, most environmentally secure way to store crude oil for long periods of time. Stockpiling oil in artificially-created caverns deep within the rock-hard salt costs about $1.50 per barrel. Storing oil in aboveground tanks, by comparison, can cost $15 to $18 per barrel - or at least 10 times the expense. Also, because the salt caverns are 2000-4000 feet below the surface, geologic pressures will seal any crack that develops in the salt formation, assuring that no crude oil leaks from the cavern. An added benefit is the natural temperature difference between the top of the caverns and the bottom - a distance of around 2000 feet; the temperature differential keeps the crude oil continuously circulating in the caverns, giving the oil a consistent quality.
Storage capacity from our current SPR facilities is 727 million barrels, so if we want to substantially increase our reserve, other solutions must be found: either expensive, above-ground storage, or further development of salt caverns (if posible).
25 million gallon tank
55 gal per barrel
$45 per barrel
$20.4 Billion of oil in each tank
52 tanks
= $1.06 Trillion in oil reserves.
Or
25 million gals x 52 tanks = 1.3 billion gallons
1.3 billion gallons = 23.6 million barrels
23.6 million barrels x $45 = $1.06 Trillion
That's alot of oil.
no doubt they don't have baba boxer there interferring with their every move.
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