Honeymoon Period Over for Kamala Harris Polls Show Tight Race

[rooster59]

China tariffs on LNG, oil aim at U.S. energy dominance agenda

By Scott DiSavino and Chen Aizhu

 

FILE PHOTO: An oil tanker passes underneath the Golden Gate Bridge during a rainfall in San Francisco, California, February 26, 2014. REUTERS/Beck Diefenbach

 

NEW YORK/BEIJING (Reuters) - China's proposed tariffs on U.S. liquefied natural gas and crude oil exports opens a new front in the trade war between the two countries, at a time when the White House is trumpeting growing U.S. energy export prowess.

 

China included LNG for the first time in its list of proposed tariffs on Friday, the same day that its biggest U.S. crude oil buyer, Sinopec, suspended U.S. crude oil imports due to the dispute, according to three sources familiar with the situation.

 

On Friday, China announced retaliatory tariffs on $60 billion worth of U.S. goods, and warned of further measures, signalling it will not back down in a protracted trade war with Washington.

 

That could cast a shadow over U.S. President Donald Trump's energy dominance ambitions. The administration has repeatedly said it is eager to expand fossil fuel supplies to global allies, while Washington is rolling back domestic regulations to encourage more oil and gas production.

 

“The juxtaposition here is clear: it is hard to become an energy superpower when one of the biggest energy consumers in the world is raising barriers to consume that energy. It makes it very difficult," said Michael Cohen, head of energy markets research at Barclays.

 

The United States is the world's largest exporter of fuels such as gasoline and diesel, and is poised to become one of the largest exporters of LNG by 2019. U.S. LNG exports were worth $3.3 billion in 2017. China is the world's biggest crude oil importer.

 

China had curtailed its imports of U.S. LNG over the last two months, even before its formal inclusion in the list of potential tariffs. It had also become the largest buyer of U.S. crude oil outside of Canada, but Kpler, which tracks worldwide oil shipments, shows crude cargoes to China have also dropped off in recent months.

 

It comes at a time when the United States has several large-scale LNG export facilities under construction, and after Trump's late 2017 trip to China that included executives from U.S. LNG companies.

 

China became the world's second-biggest LNG importer in 2017, as it buys more gas in order to wean the country off dirty coal to reduce pollution.

 

"This will not affect the trade but will simply make gas more expensive to Chinese consumers," said Charif Souki, chairman of Tellurian Inc <TELL.O>, one of several companies seeking to build a new LNG export terminal.

 

China, which purchased almost 14 percent of all U.S. LNG shipped between February 2016 and May 2018, has taken delivery from just one vessel that left the United States in June and none so far in July, compared with 17 in the first five months of the year.

 

"The U.S. gas industry will be much harder hit by this as China imports only a small volume whereas U.S. suppliers see China as a major future market," said Lin Boqiang, professor on energy studies at Xiamen University in China.

 

(U.S. LNG shipments to China falling,

 

(For an interactive graphic on U.S. LNG shipments to China, see https://tmsnrt.rs/2n9bQKn)

 

Meanwhile, according to Kpler, crude exports to China dropped to an estimated 226,000 barrels per day (bpd) in July, after reaching a record 445,000 bpd in March. Sinopec, through its Unipec trading arm, is the largest buyer of U.S. crude.

 

China would likely hike purchases from Saudi Arabia, Russia, the United Arab Emirates and Iraq if the tariffs slowed U.S. flows, said Neil Atkinson, head of the oil industry and markets division at the International Energy Agency.

 

There will be "others who will be offering barrels to China, so it could find itself able to replace lost volumes from the U.S.," Atkinson said.

 

With LNG demand expected to skyrocket over the next 12 to 18 months, there are still some two dozen firms seeking to build new LNG export terminals in the United States and tariffs may limit their ability to secure sufficient buyers to finance their proposed projects.

 

"Cheniere continues to see China as an important growth market and LNG as a ‘win-win’ between the United States and China," said Eben Burnham-Snyder, a spokesman at Cheniere Energy Inc <LNG.A>, which owns one of the two LNG export terminals currently operating in the United States. He added they do not see tariffs as productive.

 

One project being developed is in Alaska, which would carry natural gas through an 800-mile (1,287 km) pipeline across the state to a terminal that would convert it to LNG to take it to China.

 

The $43 billion project is still in development, and the Alaska Gasline Development Corp said on Friday that it believes the "current trade tensions between the United States and China will be resolved well in advance of Alaska LNG exports to China."

 

 

-- © Copyright Reuters 2018-08-04

[pegman]

No worries, Trump will bailout the oil & gas guys. What's a bit more taxpayer debt to the King of Debt. Didn't he state during the campaign that he knew debt better than anyone? 

[pokerface1]

The bet is that the US. LNG will still make it's way into China via third party hence no added Tariff and life goes on.

[pegman]

22 minutes ago, pokerface1 said:

The bet is that the US. LNG will still make it's way into China via third party hence no added Tariff and life goes on.

Doubtfull, as the world is awash in natural gas. That's why the price has tanked so bad. 

[edwinchester]

"Trade wars are good and easy to win"

[spidermike007]

Trump is so far out of his element with this trade war. He could not negotiate his way out of a paper bag. His threats and tirades on adolescent twitter, have only emboldened Xi, who is the most powerful premier China has had since Mao. Xi is not going to back down, and the result is going to be very painful for the tangerine tornado. His base will be hurt big. Trade wars are not good, as this fool likes to brag. That is simply his fake spin, on a tragic situation of his own making. This huckster redefines the term fake narrative. He embodies it. Navarrro, Bolton, Ross and Mnuchin are men of such fabulous ignorance, that they threaten the security of the nation. 

 

The irony in this situation, that none of the American leaders seem to understand, is that the US needs China far, far more than China needs the US. The majority of the companies that are going to be taxed (tariffs are simply a huge tax hike Donny) are American companies manufacturing in China, or American companies dependent on China for the importation of products they sell. Dumb and dumber. 

 

At this point in time, Tiny Donny is the most dangerous man in the world, and he is making America less great, every day he wakes up. Moving America backwards at an astonishing pace. 

[IAMHERE]

I don't own any gas or oil companies in the USA. That oil and gas not going to China will be used somewhere, you be sure of that. A little sea lane blocking in the middle east and china will beg for oil/gas from America.  

[thesetat2013]

it's kind of funny this trade war.. us imposes 50 billion in tariffs... China imposes 60 billion which will cause their consumers gas prices to increase.. and at the same time increase gas quantities in the USA which should reduce prices there.. Doubtful any of this would have a lasting impact on the gas conglomerates and if they did..perhaps it would be a good thing for the USA and smaller businesses. 

USA  need to hike up the stakes and impose 70 billion in tariffs now... 

[edwinchester]

4 minutes ago, IAMHERE said:

I don't own any gas or oil companies in the USA. That oil and gas not going to China will be used somewhere, you be sure of that. A little sea lane blocking in the middle east and china will beg for oil/gas from America.  

Russia will already be ramping up production is my bet.

[thesetat2013]

6 minutes ago, spidermike007 said:

Trump is so far out of his element with this trade war. He could not negotiate his way out of a paper bag. His threats and tirades on adolescent twitter, have only emboldened Xi, who is the most powerful premier China has had since Mao. Xi is not going to back down, and the result is going to be very painful for the tangerine tornado. His base will be hurt big. Trade wars are not good, as this fool likes to brag. That is simply his fake spin, on a tragic situation of his own making. This huckster redefines the term fake narrative. He embodies it. Navarrro, Bolton, Ross and Mnuchin are men of such fabulous ignorance, that they threaten the security of the nation. 

 

The irony in this situation, that none of the American leaders seem to understand, is that the US needs China far, far more than China needs the US. The majority of the companies that are going to be taxed (tariffs are simply a huge tax hike Donny) are American companies manufacturing in China, or American companies dependent on China for the importation of products they sell. Dumb and dumber. 

 

At this point in time, Tiny Donny is the most dangerous man in the world, and he is making America less great, every day he wakes up. Moving America backwards at an astonishing pace. 

You are lost in your own fantasy... America has been put in so much debt due to these deals with China that should China decide to collect it would mean a war for sure... Better a trade war and getting some of the money back instead of increasing America's debt to China more.. 

 

[whatsupdoc]

24 minutes ago, thesetat2013 said:

You are lost in your own fantasy... America has been put in so much debt due to these deals with China that should China decide to collect it would mean a war for sure... Better a trade war and getting some of the money back instead of increasing America's debt to China more.. 

 

Who is to blame for America having such an unsustainably large debt? Nobody but themselves.

[Srikcir]

3 hours ago, thesetat2013 said:

should China decide to collect it would mean a war for sure

China can't decide to "collect it" (the debt) other than in accordance with the terms of the Treasury Bill. A T-bill is a debt instrument and repayment of borrowed principle and earned interest is prescribed by the bill, ie., maturity date.

https://money.howstuffworks.com/personal-finance/financial-planning/treasury-bills.htm

So no war "for sure" according to your scenario.