Is everyone comfortable with China investing in US resources?

[Drachen]

The Chinese resource shopping spree has reached our own backyard. The oil Shale formations Southwest of San Antonio to the Mexican border have been being developed by Chesapeake Energy and the Chinese Oil Co has bought the rights to a third of whatever comes out of the ground for $2.2 B. To be clear, the Chinese will have nothing to do with the drilling. They won't even own an interest in the company, just in the resources themselves. This will allow Chesapeake to increase their operations from 10 to 40 rigs over the next year and a half and will create an estimated 20k jobs. Is this a good thing or no? I don't have an extremely clear opinion here, but wanted to find out what yall think.

On a side note, Chesapeake is moving some major operations here to SA. They only have a satellite office now, but they are going to be purchasing a LARGE building (think 10 stories) in the next year or so to house all of the support structure and business operations for these projects.

Article (http://www.mysanantonio.com/business/local/China_stakes_claim_to_S_Texas_oil_gas_104753969.ht ml)

[ElNono]

As long as we have the bigger guns...

[MannyIsGod]

Why are you worried about them investing here?

[boutons_deux]

How many Chinese nukes falling on USA would ElNono say would be acceptable as the USA dropped more nukes on China?

US corps will sell US oil to anybody, just like US corps will buy jobs anywhere.

Corporate profit-seeking knows nor owes any allegiance to any country.

[CosmicCowboy]

They are investing their surplus trade dollars in hard assets that will keep up with the inflation they know is coming. I have no problem with it. They are doing it all over the world. They have a 40 Billion dollar offer on the table right now for the biggest Potash (fertilizer) mine in the world...(in Canada)

[coyotes_geek]

China getting rich at the expense of U.S. taxpayers via government debt bothers me far more than this does.

[Drachen]

Why are you worried about them investing here?


Not as worried about THEM investing here as I am about one entity controlling so many of the world's natural resources as evidenced by their recent shopping spree. I will admit that there is a little twinge of worry about THEM, but I write that off as more of an irrational conditioned response, and do my best to ignore it.

[CosmicCowboy]

China getting rich at the expense of U.S. taxpayers via government debt bothers me far more than this does.

They only have about 800 Billion of US debt. It will probably turn out to be a bad investment when the US starts monetizing it's new debt and inflating the dollar.

[ElNono]

How many Chinese nukes falling on USA would ElNono say would be acceptable as the USA dropped more nukes on China?


If we ever reach that point, does the amount matter?

[RandomGuy]

The Chinese resource shopping spree has reached our own backyard. The oil Shale formations Southwest of San Antonio to the Mexican border have been being developed by Chesapeake Energy and the Chinese Oil Co has bought the rights to a third of whatever comes out of the ground for $2.2 B. To be clear, the Chinese will have nothing to do with the drilling. They won't even own an interest in the company, just in the resources themselves. This will allow Chesapeake to increase their operations from 10 to 40 rigs over the next year and a half and will create an estimated 20k jobs. Is this a good thing or no? I don't have an extremely clear opinion here, but wanted to find out what yall think.

On a side note, Chesapeake is moving some major operations here to SA. They only have a satellite office now, but they are going to be purchasing a LARGE building (think 10 stories) in the next year or so to house all of the support structure and business operations for these projects.

Article (http://www.mysanantonio.com/business/local/China_stakes_claim_to_S_Texas_oil_gas_104753969.ht ml)

Oil shale?

China has a lot of capital, and the Chinese have, from what I have seen, been making some rather shaky investments in a lot things.

You can get natural gas out of shale formations to my understanding, but if they have bought into the "oil shale" pipe dream, then that is really kinda sad.

It seems, though, that their stake is in exactly the gas drilling, so here that isn't quite the case. Hopefully they will get a return on the investment.

I have no problem with capital being put to good use. The ultimate source does not bother me. This seems to be a good case of the benefits of allowing foreign direct investment (FDI).

Countries that don't, like Mexico, Venezuala, Bolivia, and Iran, for example, tend to see their outputs drop rather nastily over time as their infrastructure ages and fields deplete.

[CosmicCowboy]

Oil shale?

China has a lot of capital, and the Chinese have, from what I have seen, been making some rather shaky investments in a lot things.

You can get natural gas out of shale formations to my understanding, but if they have bought into the "oil shale" pipe dream, then that is really kinda sad.

It seems, though, that their stake is in exactly the gas drilling, so here that isn't quite the case. Hopefully they will get a return on the investment.

I have no problem with capital being put to good use. The ultimate source does not bother me. This seems to be a good case of the benefits of allowing foreign direct investment (FDI).

Countries that don't, like Mexico, Venezuala, Bolivia, and Iran, for example, tend to see their outputs drop rather nastily over time as their infrastructure ages and fields deplete.

uhhh...that Eagle Ford Shale play is not a pipe dream...they are producing like crazy...theres a huge amount of gas there...

[boutons_deux]

China and India and Japan have been buying up agricultural land in Africa and elsewhere. I don't know where they are going to get the water to make it productive.

The over-populated planet appears to be on a trajectory of resource depletion, aka unsustainable, that will lead to crippling commercial and very probably shooting wars.

As resources diminish and commodity prices skyrocket, corporations will pockets $Ts in profits, so they will buy the politicians' silence on this critical issue of resource depletion.

[RandomGuy]

Not as worried about THEM investing here as I am about one entity controlling so many of the world's natural resources as evidenced by their recent shopping spree. I will admit that there is a little twinge of worry about THEM, but I write that off as more of an irrational conditioned response, and do my best to ignore it.

Well they don't really control all that much.

Most nations tend to be very guarded about letting foreigners buy energy resources, so there is a fairly small pool of available stuff to buy in the first place.

This limits both the Chinese, the US, and anybody else for that matter, with money to spend.

Also remember that they have been, until fairly recently, net exporters of oil.

They started off owning almost literally no outside sources. So their buying spree can be seen as simply increasing their percentage from nothing to something.

Another thing about new capital entering this market is that it does mean more of the stuff will be extracted than would otherwise be the case.

[RandomGuy]

uhhh...that Eagle Ford Shale play is not a pipe dream...they are producing like crazy...theres a huge amount of gas there...

Yup.

Just to be clear:

Oil shale has lots of natural gas.

My reference though was that you get a lot of people pushing shale for the trapped oil. That is a pipe dream. "We can get all of this oil out of the rock, if only..."

I am not sure what the valuation basis was for the sale. Hopefully they didn't pay for the supposedly trapped oil, and it was valued on the gas only. I would hate to see anybody fleeced.

[boutons_deux]

China elsewhere:

China’s Pipelineistan "War": Anteing Up, Betting, and Bluffing in the New Great Game

China’s economy is thirsty, and so it’s drinking deeper and planning deeper yet. It craves Iraq’s oil and Turkmenistan’s natural gas, as well as oil from Kazakhstan. Yet instead of spending more than a trillion dollars on an illegal war in Iraq or setting up military bases all over the Greater Middle East and Central Asia, China used its state oil companies to get some of the energy it needed simply by bidding for it in a perfectly legal Iraqi oil auction.

http://www.truth-out.org/china%E2%80%99s-pipelineistan-war-anteing-up-betting-and-bluffing-new-great-game64124?print

[CosmicCowboy]

Yup.

Just to be clear:

Oil shale has lots of natural gas.

My reference though was that you get a lot of people pushing shale for the trapped oil. That is a pipe dream. "We can get all of this oil out of the rock, if only..."

I am not sure what the valuation basis was for the sale. Hopefully they didn't pay for the supposedly trapped oil, and it was valued on the gas only. I would hate to see anybody fleeced.

Nobody is doing Eagle Ford for the oil. It's about the gas. It's not like China is buying this for domestic use. IMHO it's just an investment/commodity play thats an inflation hedge.

[Drachen]

Oil shale?

China has a lot of capital, and the Chinese have, from what I have seen, been making some rather shaky investments in a lot things.

You can get natural gas out of shale formations to my understanding, but if they have bought into the "oil shale" pipe dream, then that is really kinda sad.

It seems, though, that their stake is in exactly the gas drilling, so here that isn't quite the case. Hopefully they will get a return on the investment.

I have no problem with capital being put to good use. The ultimate source does not bother me. This seems to be a good case of the benefits of allowing foreign direct investment (FDI).

Countries that don't, like Mexico, Venezuala, Bolivia, and Iran, for example, tend to see their outputs drop rather nastily over time as their infrastructure ages and fields deplete.


The way that I have understood it was that although Chesapeake has large natural gas interests in the same area, that they are focusing on development of oil shale fields due to the fact that Chesapeake has developed a more efficient way of extracting this. The primary reasoning is that there is currently a glut of Nat G which is keeping prices low and they are waiting for more favorable economic conditions to act on those leases.

Some of this info is based on another article posted on the same subject on mysa yesterday that I can't seem to find anymore.

[Wild Cobra]

Yep, when once they buy the majority of resources across the world, they can squeeze the world population any time they want. It's called power.

[MannyIsGod]

Not as worried about THEM investing here as I am about one entity controlling so many of the world's natural resources as evidenced by their recent shopping spree. I will admit that there is a little twinge of worry about THEM, but I write that off as more of an irrational conditioned response, and do my best to ignore it.

I'm not really sure they can control it considering its on our soil.

[Drachen]

Well they don't really control all that much.

Most nations tend to be very guarded about letting foreigners buy energy resources, so there is a fairly small pool of available stuff to buy in the first place.

This limits both the Chinese, the US, and anybody else for that matter, with money to spend.

Also remember that they have been, until fairly recently, net exporters of oil.

They started off owning almost literally no outside sources. So their buying spree can be seen as simply increasing their percentage from nothing to something.

Another thing about new capital entering this market is that it does mean more of the stuff will be extracted than would otherwise be the case.


This makes sense, I guess this is a case of perception being based on splashy headlines (yes I read the stories too, but you know what I mean "China buys all of Nigeria's oil" and stories like it have been in my face recently). Sorry for that.

Ok, well how about Google's move into energy production, anyone see that?

(yes I just took an embarrassing post of mine, gave a quick mea culpa and more quickly changed the subject.) - LOL

[MannyIsGod]

Google sees wind power as a good investment. Boutons posted a link in the wind thread.

[Drachen]

Google sees wind power as a good investment. Boutons posted a link in the wind thread.

Cool. Then I won't talk about it here. I had quit going in that thread because it devolved like it always does. After about 4 pages straight of "wind isn't a plausible replacement for all of our energy needs you dickface" and "no one said it would replace, only augment you oil co shill" or "the flux capacitor just doesn't work that way Marty" and "We have to produce a 1.21 Gigawatt charge at a low voltage or we will be stuck in 1955." I just decided to back out.