Hugo does a deal with China?
Hugo does a deal with China?
(OP)
I'm not sure we should believe everything in this story:
h ttp://www. nationnews .com/story /286256114 042206.php
todays prices for heavy fuel oils are around $350 a ton for 380cst and only MGO and MDO are above $600. OK, it's 2.8% sulphur but even if you add in desulphurisation costs, bunker C isn't going to reach $600 a ton, unless I've missed something (the premium is estmated to be $35-$65 a ton for marine service).
None the less, at $200 a ton, Orimulsion (htt p://www.wo rldenergy. org/wec-ge is/publica tions/defa ult/tech_p apers/17th _congress/ 2_1_06.asp) is good and cheap, all 270 billion barrels of it.
This article suggests that China has secured exclusive access to this fuel. If that is the case, the playing field is approaching the inclination of a cliff.
This could just be a bit alarmist, but it would be a master stroke for Chavez to undermine the US economy still further to enable China to not only have a labour rate advantage but a significant fuel cost advantage also. I don't mean just supplying China, but giving exclusive access to China deprives other economies of equal access. We are talking about 270 billion barrels of proven economic reserves. Compare that to the crude oil stocks available and you'll see why this is unnecessary, unless there is a political motive and we can believe Hugo Chavez has no fondness for the USA and if it takes care of a few other economies on route, will he worry?
Basically, if this story is to be trusted, China would have access to fuel at half the cost of anyone else.
But before we all get too excited, anyone got any confirmation or clarification?
h
todays prices for heavy fuel oils are around $350 a ton for 380cst and only MGO and MDO are above $600. OK, it's 2.8% sulphur but even if you add in desulphurisation costs, bunker C isn't going to reach $600 a ton, unless I've missed something (the premium is estmated to be $35-$65 a ton for marine service).
None the less, at $200 a ton, Orimulsion (htt
This article suggests that China has secured exclusive access to this fuel. If that is the case, the playing field is approaching the inclination of a cliff.
This could just be a bit alarmist, but it would be a master stroke for Chavez to undermine the US economy still further to enable China to not only have a labour rate advantage but a significant fuel cost advantage also. I don't mean just supplying China, but giving exclusive access to China deprives other economies of equal access. We are talking about 270 billion barrels of proven economic reserves. Compare that to the crude oil stocks available and you'll see why this is unnecessary, unless there is a political motive and we can believe Hugo Chavez has no fondness for the USA and if it takes care of a few other economies on route, will he worry?
Basically, if this story is to be trusted, China would have access to fuel at half the cost of anyone else.
But before we all get too excited, anyone got any confirmation or clarification?





RE: Hugo does a deal with China?
Mike
RE: Hugo does a deal with China?
So tell me, is The Nation a highly respected news source, or a paranoid right wing xenophobic rag, or, both?
Cheers
Greg Locock
Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.
RE: Hugo does a deal with China?
Try to connect with thread610-148245.
RE: Hugo does a deal with China?
That's not necessarily an underhanded or evil thing. In fact that is just what we call capitalism/free market / supply-and-demand. No-one in that article suggested the Chinese or Venezuelans were doing anything wrong, did they? I don't think there was any discussion about price. But it would not surprise me to learn that a large consumer may negotiate favorable terms or exclusive rights with a given supplier.
I guarantee this is not the last we will hear about the effects of Chinese activities on resource prices and availability. Better get used to it.
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RE: Hugo does a deal with China?
I should have posted the link myself.
All:
Please note Davefitz's comments there which seem to substantiate the gist of the article, or at least, lend it some credance.
Greg,
I don't have any information on orimulsion prices but the heavy fuel oil prices are daily quoted on a variety of web sites. In fact, they have dropped a bit from their previous high but no-one expects them to recover their price of a couple of years ago.
And yes, I think a lot of people do want it simply because it is cheap. A lot of work has gone into creating Orimulsion and proving it in a variety of situations. (see the thread 25362 refers to and the preceding part I thread).
In the current market everyone has reasonably equal access to fuels, we have a level playing field.
If orimulsion entered the general market it would be fine but I would expect some concern if China, or anyone else, gains a monopoly.
In terms of marine transport, fuel is around 70-80% of the operating costs; so any shipping which has access to such a fuel would have an enormous competitive advantage.
MAN B&W have done a lot of work on fuel water emulsions for their marine diesels and there are some advantages. I'm not sure just how well orimulsion would compare in reality but various reports suggest well.
JMW
www.ViscoAnalyser.com
RE: Hugo does a deal with China?
http
JMW
www.ViscoAnalyser.com
RE: Hugo does a deal with China?
A more credable news source (though not according to some):
http:/
JMW
www.ViscoAnalyser.com
RE: Hugo does a deal with China?
htt
My mistake.
I thought this was new and that it could be mere rumour.
Since this has been public knowledge for at least since this article appeared in 2004 and because the various governments have been so sanguine about it, I guess we have nothing to worry about.
Except I do.
The numbers are significant.
We are not talking about trivial amounts.
JMW
www.ViscoAnalyser.com
RE: Hugo does a deal with China?
Not so good oil source now - really good oil source 20 years from now when oil hits $350/barrel?
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
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RE: Hugo does a deal with China?
I was given to understand that China is leading the world in the investigation, and actual exploitation, of alternative renewable sources of energy to replace the combustion of fossil fuels.
RE: Hugo does a deal with China?
RE: Hugo does a deal with China?
Moltenmetal: you are, of course, absolutely right.
I referred to the efforts the chinese are putting in the use of bio-mass and other renewables, as well as of cleaner coal technologies.
This is one site with interesting reading material on China's energy situation:
http://china.lbl.gov/publications/up_preprint2.pdf