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the shale boom
Shale Is Helping America’s Trade Balance with China

The United States has been exporting crude oil for less than a year and a half after the four-decade ban on exports was lifted, but already buyers are lining up to tap this new, stable supply. Canada has bought up most of this crude to date, but China just surpassed our northern neighbor to become the biggest buyer of American crude in February. The FT reports:

To date, Canada has taken about half of the 239m barrels exported since the US ban was lifted, while China bought only 7 per cent, according to US census bureau data. But recent pipeline upgrades, and the surge in shale oil and gas production since the 2000s, has created ample supply and pushed output from Texas and Oklahoma into the Gulf Coast, depressing prices enough to justify the shipping cost to Asia. […]

Exports have begun flowing even as China goes head-to-head with the US as the world’s top oil importer. Within the next three to five years China is expected to become the world’s largest oil-refining nation, surpassing the US.

China has eyes on becoming the world’s biggest refiner of crude oil, and it knows that the United States is a much more reliable supplier than the Middle East. Lin Boqiang, dean of the China Institute for Energy Studies at Xiamen University, admitted as much to the FT, saying that “the Middle East is very risky, so we need to diversify, to look at all continents.”

This is an opportunity for the United States to help address its lopsided trade balance with China. The U.S. remains a net energy importer and will for the foreseeable future, but in our bilateral trade relations with China, the shale boom can help us nudge the scales back to a more equitable position.

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  • Suzy Dixon

    It helps, but not much. The US loses more than $1 billion per day to China! And this is despite the regime best efforts to steal IP related to US shale success.
    If General Secretary Xi leaves Florida happy then we can already write Trump off.

  • ——————————

    “This is an opportunity for the United States to help address its lopsided trade balance with China.”

    It’s an opportunity for big oil, but not for the rest of the businesses and citizens that have takes huge losses in all ways with our Chinese trade practices….

    • Sam Pyeatte

      Also, oil shipping costs to Asia from the Gulf just got significantly cheaper with the opening of the new Panama Canal which can take the largest ships in the world – super tankers. Eliminating the trip around the tip of South America saves $millions in fuel and time.

  • Pete

    Sure, exporting oil to China helps the trade balance but that doesn’t let the Chinese off the hook for all their other predatory trade practices.

  • Jacksonian_Libertarian

    China has decided they’re America’s enemy, even though the so called “Chinese Economic Miracle” would have been impossible without the western investors that built state of the art factories in China to take advantage of cheap Chinese Labor and potential 1.3 billion new consumers. In the decades since the fall of the “Iron Curtain”, China hasn’t created a single world class brand name like: Sony, Toyota, Kia, Samsung, Microsoft, Apple, Intel, etc… This lack of creativity is a hallmark of the absence of free markets in China.

    The Chinese Economic Miracle is now at an end. Chinese Labor is no longer cheap, the factories are dated, capital flight indicates the smart money is already gone, and the opportunity to unload the tens of thousands of state owned enterprises is gone. For millennia the way to get rich was to become part of the corrupt government, the backward Chinese still do it that way.

  • Kneave Riggall

    China is stocking up on commodities for when the NORKs drop the bomb . . . Seoul or Tokyo or Hawaii? Decisions, decisions.

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