The yanks wolf crying wolf. I believe they started it when a yank visted the Wuhan lab
Food & Resource Security
- Thread starter Maikeru
- Start date
Something I haven't seen discussed is PRC's massively expanding coal->chemical industry. I've been doing some research and napkin math, maybe I'm wildly off, some one more keen can double check. TLDR total PRC oil independance for industry + transportation in 10 years. Coal is god.
Some basic numbers:
PRC uses 14m bpd oil. 4m domestic production 10m imports.
Use: 7m transportation (decreasing) , 5m industry/petrochem (increasing), 2m energy/heating.
Strategically PRC massively rolling out coal -> petrochem production last few years but I had no idea scale, there appears to be significant hedge with coal-to-olefins CTO. This part is key PRC currently already have enough CTO capacity to fully displace ~2m oil - they're simply at 60/70% utilization because CTO more expensive when oil <$70 per barrel. CTO projects in the pipline has potential to displace 1.5m bpd, or 400k bpd per year, i.e. in 10 years domestic oil 4m bdp, domestic CTO at full utilization 5m bdp equivalent, 60% NEV penetration basically sustains full industry/tranport energy autarky. Assumption numbers:
PRC petro chem need: 5m bpd.
Current CTO capacity: 2.5m bpd equivalent / 1m used
10 year CTO pool at current expansion rate: 2.5m+4m = 6.5m bpd equivalent
6.5m CTO bdp equivalent can displace industrial oil, with surplus / 25% increase petrochem capacity
Redirect 4m bdp domestic oil for transport (7m declining)
50/60% NEV penetration = displace 4m bpd
3-4m actual oil need for IC fleet / aviation / shipping
Maybe back to net oil exporter kek.
This projection happens happens in 10 years. Faster if PRC hammers CTO / NEV adoption.
The bottleneck seems mostly policy, i.e. most CTO infra is in water managed/scarce north, CTO process uses 15x more water than oil, but really we're talking about diverting water from 150k acres of farmland, i.e. 0.05% of PRC arable land. Looking at current rollout rate I presume that is what is basically happening, farmers demographically declining / agri centralizing. Other down side is CTO is more emission intensive, but overall current pace of CTO rollout suggest this is plan B (hidden plan A) for industrial/petrochem autharky. Also reminder you can make fertilizer out of coal as well, PRC use to be #1 fertilizer exporter but industry unwound to cut back coal. TLDR is coal is god, and there is increasing coal infra (inclduing all the underutliized coal plants) to for comprehensive domestic energy and industry autarky medium term.
US future: produces more oil than it uses, but can't use the oil mix it produces due to geographic refinery composition and unless they can infrat their way to proper refinery composition in 10 years, will remain net oil importer. Currently they're importing ~6mbb, half from Canada (Edmonton, Hardsky) which are... let's just say within missile range. Combine with PRC having functionally unlimited amount of cheap coal and US shale / tier1 cheap permian oil price expriing in 20-30 years and we are going to look at very interesting reversal of energy autarky scenario in medium term.
Some basic numbers:
PRC uses 14m bpd oil. 4m domestic production 10m imports.
Use: 7m transportation (decreasing) , 5m industry/petrochem (increasing), 2m energy/heating.
Strategically PRC massively rolling out coal -> petrochem production last few years but I had no idea scale, there appears to be significant hedge with coal-to-olefins CTO. This part is key PRC currently already have enough CTO capacity to fully displace ~2m oil - they're simply at 60/70% utilization because CTO more expensive when oil <$70 per barrel. CTO projects in the pipline has potential to displace 1.5m bpd, or 400k bpd per year, i.e. in 10 years domestic oil 4m bdp, domestic CTO at full utilization 5m bdp equivalent, 60% NEV penetration basically sustains full industry/tranport energy autarky. Assumption numbers:
PRC petro chem need: 5m bpd.
Current CTO capacity: 2.5m bpd equivalent / 1m used
10 year CTO pool at current expansion rate: 2.5m+4m = 6.5m bpd equivalent
6.5m CTO bdp equivalent can displace industrial oil, with surplus / 25% increase petrochem capacity
Redirect 4m bdp domestic oil for transport (7m declining)
50/60% NEV penetration = displace 4m bpd
3-4m actual oil need for IC fleet / aviation / shipping
Maybe back to net oil exporter kek.
This projection happens happens in 10 years. Faster if PRC hammers CTO / NEV adoption.
The bottleneck seems mostly policy, i.e. most CTO infra is in water managed/scarce north, CTO process uses 15x more water than oil, but really we're talking about diverting water from 150k acres of farmland, i.e. 0.05% of PRC arable land. Looking at current rollout rate I presume that is what is basically happening, farmers demographically declining / agri centralizing. Other down side is CTO is more emission intensive, but overall current pace of CTO rollout suggest this is plan B (hidden plan A) for industrial/petrochem autharky. Also reminder you can make fertilizer out of coal as well, PRC use to be #1 fertilizer exporter but industry unwound to cut back coal. TLDR is coal is god, and there is increasing coal infra (inclduing all the underutliized coal plants) to for comprehensive domestic energy and industry autarky medium term.
US future: produces more oil than it uses, but can't use the oil mix it produces due to geographic refinery composition and unless they can infrat their way to proper refinery composition in 10 years, will remain net oil importer. Currently they're importing ~6mbb, half from Canada (Edmonton, Hardsky) which are... let's just say within missile range. Combine with PRC having functionally unlimited amount of cheap coal and US shale / tier1 cheap permian oil price expriing in 20-30 years and we are going to look at very interesting reversal of energy autarky scenario in medium term.
Last edited:
PiSigma
"the engineer"
Permian is not going to last 20-30 years, I can promise you that. We are already at a point where shale is a giant money sink and the breakeven cost is closer to $50 per barrel. It is the giant cash flow keeping everything afloat, the margins are thin.
Hardisty is not anywhere near Edmonton, but that is where oil is distributed south. Ironically ever since TMX was completed, China is now 2nd largest oil buyer of Canadian oil and likely to increase more in future.
If US want to retrofit their refineries to handle Permian light oils, it will take over a decade just for the Texas ones. By then Permian will be out of oil, or the economic ones anyway.