US and Australia Sign SPR Lease Agreement

[Jay McKinsey + 1,490]

1 minute ago, ceo_energemsier said:

They did but the Admin should have left it open for US companies to lease and store their own produced/acquired crude not foreign govs.

The Admin offered 30M bbl storage but industry only took them up on 23. Why didn't they lease all 30? 

Most of the SPR storage is designated for sour. Doesn't that make most of the available space inappropriate for US producers other than Mars? Is there enough Mars to fill up the sour space?

[Dan Warnick + 6,100]

4 hours ago, ceo_energemsier said:

The SPR capacity would have better served American oil producers to store their crude and then the American oil companies would have made a very good profit on the contango. Why let the Aussies profit and let the American oil producers take losses? on storing the sweet shale crudes!!!

Just my thoughts, but the government did not say American producers cannot store their crude there, did they?  As has been mentioned earlier in this thread, storage was not an issue late last year, or pretty much any time before that, so why blame the government or the Aussies for making the deal now?

The Aussies are our ally, and they may well need our support in a major conflict with China.  That's a real possibility as China are much more willing to openly challenge the Aussies.  A strong allied front, and this type of agreement surely signals that, is good for the Aussies, obviously, but good for America and the other allies as well.  And American industry can pump more oil when demand is up, and still maintain a proper balance of storage in the meantime.

Yes, bad for oil producers short term, especially smaller players, but I don't believe this deal hits our economy in any significant way at all.

Just my opinion, and I don't have dog in the fight, so my apologies if I go against anyone's sensitivities. 

[Marcin2 + 725]

On 6/5/2020 at 2:07 AM, markslawson said:

You would think that for a strategic petroleum reserve Australia would have its own on-shore storage capacity but I don't recall reading anywhere it is building that capacity. As it is, the reserve is under another country's control and will take two weeks to get to Australia if required.. doesn't seem very satisfactory..

Apart from this, At the end of the day this agreement means nothing. In case of large global turmoil, the exact moment when SPR is needed it would be just prudent for US to breake this agreement and supply oil for domestic market. For National Security reasons. 
SPR kept abroad is a concept so surreal, that  I think in a more reasonable country you can even lose elections because of such behaviour as it is pure fraud.

Next week i am selling Eiffel Tower and all my Moon plots to Australia

[NickW + 2,714]

1 hour ago, Marcin2 said:

Apart from this, At the end of the day this agreement means nothing. In case of large global turmoil, the exact moment when SPR is needed it would be just prudent for US to breake this agreement and supply oil for domestic market. For National Security reasons. 
SPR kept abroad is a concept so surreal, that  I think in a more reasonable country you can even lose elections because of such behaviour as it is pure fraud.

Next week i am selling Eiffel Tower and all my Moon plots to Australia

It makes sense for the Australians to utiliise the SPR in the short term in the absence of having their own facilities. These facilities don't get built overnight. The open question now is whether Australia starts building its own SPR in haste? 

Probably not. 

[Dan Warnick + 6,100]

2 hours ago, NickW said:

It makes sense for the Australians to utiliise the SPR in the short term in the absence of having their own facilities. These facilities don't get built overnight. The open question now is whether Australia starts building its own SPR in haste? 

Probably not. 

It makes sense for the Aussies to show goodwill to THE ally they would need the most help from in the event of open hostilities from China.  I see this as part of an overall strategy of partnership and publicly choosing sides, since the Aussies do feel threatened, right now, today, by China.  Even without military conflict, which I hope never comes to happen, the Aussies may simply want the U.S. to know they can count on them.  As has been mentioned, Australia is vulnerable, isolated and under-defended, and those are pretty good reasons to want to have the largest, most modern navy in the world tooling around the perimeter, dropping anchor in their harbors for both supplies and shore leave, and having a generally good trading relationship with the United States.

As far as the Aussies "owning" oil in the SPR, I'm sure they would gladly gift the oil to the U.S. in exchange for the U.S. Navy defending their way of life.  No reason to "take" it from them, real or imagined.  Besides, it's just "oil" on paper and is more realistically a balance of trade point of data that can be adjusted with an email to/from the right people in both governments.

IMHO.

Edited June 7, 2020 by Dan Warnick

[NickW + 2,714]

1 hour ago, Dan Warnick said:

It makes sense for the Aussies to show goodwill to THE ally they would need the most help from in the event of open hostilities from China.  I see this as part of an overall strategy of partnership and publicly choosing sides, since the Aussies do feel threatened, right now, today, by China.  Even without military conflict, which I hope never comes to happen, the Aussies may simply want the U.S. to know they can count on them.  As has been mentioned, Australia is vulnerable, isolated and under-defended, and those are pretty good reasons to want to have the largest, most modern navy in the world tooling around the perimeter, dropping anchor in their harbors for both supplies and shore leave, and having a generally good trading relationship with the United States.

As far as the Aussies "owning" oil in the SPR, I'm sure they would gladly gift the oil to the U.S. in exchange for the U.S. Navy defending their way of life.  No reason to "take" it from them, real or imagined.  Besides, it's just "oil" on paper and is more realistically a balance of trade point of data that can be adjusted with an email to/from the right people in both governments.

IMHO.

I agree - I believe the Anglo nations (primarily USA, UK, Canada and OZ) need to reforge their strategic alliances in mutual interest. Also form cordial relationships with developed democracies - Japan, South Korea, Taiwan, Phillipines, Singapore to counter the increasing aggression from China. IMO the South China Sea sedbed grab is just the beginning of China ripping up the international rule book in their own favour. 

[0R0 + 6,251]

10 hours ago, Dan Warnick said:

Just my thoughts, but the government did not say American producers cannot store their crude there, did they?  As has been mentioned earlier in this thread, storage was not an issue late last year, or pretty much any time before that, so why blame the government or the Aussies for making the deal now?

The Aussies are our ally, and they may well need our support in a major conflict with China.  That's a real possibility as China are much more willing to openly challenge the Aussies.  A strong allied front, and this type of agreement surely signals that, is good for the Aussies, obviously, but good for America and the other allies as well.  And American industry can pump more oil when demand is up, and still maintain a proper balance of storage in the meantime.

Yes, bad for oil producers short term, especially smaller players, but I don't believe this deal hits our economy in any significant way at all.

Just my opinion, and I don't have dog in the fight, so my apologies if I go against anyone's sensitivities. 

Perhaps it is time to give the Aussies a couple of aircraft carriers....And a nuclear arsenal. Perhaps some nukes for Taiwan.

On the SPR front, the US producers were looking for SPR PURCHASES to pick up their production and produce cash flows. Renting space in the SPR COSTS money. They would rather shut down production if it costs them money. Congress refused to fund the SPR purchases so the SPR might as well not have been there for the US oil producers. If Aussies need an offshore oil storage to make use of the cheap oil, then booyah for the contango trade they are putting on. (Not much of that left actually)

[Dan Warnick + 6,100]

3 hours ago, NickW said:

I agree - I believe the Anglo nations (primarily USA, UK, Canada and OZ) need to reforge their strategic alliances in mutual interest. Also form cordial relationships with developed democracies - Japan, South Korea, Taiwan, Phillipines, Singapore to counter the increasing aggression from China. IMO the South China Sea sedbed grab is just the beginning of China ripping up the international rule book in their own favour. 

And I agree with your selection of nations.  They are the most obvious and most aligned with reality, vs the EU (the body, not the member states) that can't or don't appear to be able to see past the bifocals on the ends of their pompous noses (ask Nigel).  In my eyes, Donald Trump sees the reality of the China threat and is taking necessary, and provocative, steps to thwart it.  If the EU wants to laugh it off, they do so at their peril.  The countries you list appear to see the threat for what it is and have in fact begun a constructive realignment.  

[0R0 + 6,251]

4 hours ago, Dan Warnick said:

8 hours ago, NickW said:

I agree - I believe the Anglo nations (primarily USA, UK, Canada and OZ) need to reforge their strategic alliances in mutual interest. Also form cordial relationships with developed democracies - Japan, South Korea, Taiwan, Phillipines, Singapore to counter the increasing aggression from China. IMO the South China Sea sedbed grab is just the beginning of China ripping up the international rule book in their own favour. 

And I agree with your selection of nations.  They are the most obvious and most aligned with reality, vs the EU (the body, not the member states) that can't or don't appear to be able to see past the bifocals on the ends of their pompous noses (ask Nigel).  In my eyes, Donald Trump sees the reality of the China threat and is taking necessary, and provocative, steps to thwart it.  If the EU wants to laugh it off, they do so at their peril.  The countries you list appear to see the threat for what it is and have in fact begun a constructive realignment.  

You can add the Norse countries and the UK. They seem to be heading towards a detachment from the EU even if EMU doesn't crumble, as they are not in the Euro zone. So they can reorient to UK and US, so add Noway Sweden and Denmark.

[Dan Warnick + 6,100]

10 hours ago, 0R0 said:

You can add the Norse countries and the UK. They seem to be heading towards a detachment from the EU even if EMU doesn't crumble, as they are not in the Euro zone. So they can reorient to UK and US, so add Noway Sweden and Denmark.

Agree, but they are not under immediate and nearby threat.

[NickW + 2,714]

12 hours ago, 0R0 said:

You can add the Norse countries and the UK. They seem to be heading towards a detachment from the EU even if EMU doesn't crumble, as they are not in the Euro zone. So they can reorient to UK and US, so add Noway Sweden and Denmark.

Sweden?

Sweden is ground Zero for SJW's / Fawning over the EU / mass uncontrolled immigration. 

Finland and Denmark maybe, particularly Denmark. 

Norway is in the EEA but not the EU. 

[Wombat + 1,028]

On 6/6/2020 at 10:37 AM, Jay McKinsey said:

I wonder which country suggested the deal first? 

Australia did. It was my idea and both Obama and my then govt agreed it was a good one. It is mutually beneficial on many levels. I am referring to US base in Darwin. Renting space in SPR is very stupid and I don't know which twit in my govt came up with the idea. All I know is they liked it because it was by far the cheapest option. Of course Australia should have it's own SPR, but not even our defence force could sway our penny-pinching govt?

[0R0 + 6,251]

4 hours ago, NickW said:

Sweden?

Sweden is ground Zero for SJW's / Fawning over the EU / mass uncontrolled immigration. 

Finland and Denmark maybe, particularly Denmark. 

Norway is in the EEA but not the EU. 

The Swedes will go where they need to, they always had. Their immigration policy has nothing to do with a relationship with the US.

[Marcin2 + 725]

21 minutes ago, 0R0 said:

The Swedes will go where they need to, they always had. Their immigration policy has nothing to do with a relationship with the US.

They are best in balancing for self protection and benefits for their country.

They would stay in EU and out of Euro zone but at the same time would keep very close ties with Uncle Sam,while on paper neutral out of NATO( Remember that It was Sweden that actually busted Assange).

For Sweden both sides of bread are buttered and they do keep equilibrium.

Edited June 8, 2020 by Marcin2
Typo

[Rasmus Jorgensen + 1,169]

On 6/8/2020 at 1:43 PM, NickW said:

Finland and Denmark maybe, particularly Denmark. 

Denmark won't leave. 

Trumps stunt with Greenland a while showed average Joe in Denmark that the US is for the US and they will run roughshod over anyone they can. And that's fine. Atleast that way cards are on the table. 

Despite all the EUs flaws atleast we get a seat at the table. 

 

[Dan Warnick + 6,100]

2 minutes ago, Rasmus Jorgensen said:

Denmark won't leave. 

Trumps stunt with Greenland a while showed average Joe in Denmark that the US is for the US and they will run roughshod over anyone they can. And that's fine. Atleast that way cards are on the table. 

Despite all the EUs flaws atleast we get a seat at the table. 

 

I agree with you @Rasmus Jorgensen.  If everyone's cards are on the table, we can begin to negotiate from our respective positions.  Trump has trumpeted that from the beginning of his term in office.  If everyone does that, he will send his team to reopen negotiations on free trade with the member States of the EU. 

And also agree that a seat at the table is far superior to not being in the room.

[NickW + 2,714]

44 minutes ago, Rasmus Jorgensen said:

Denmark won't leave. 

Trumps stunt with Greenland a while showed average Joe in Denmark that the US is for the US and they will run roughshod over anyone they can. And that's fine. Atleast that way cards are on the table. 

Despite all the EUs flaws atleast we get a seat at the table. 

 

To be fair to Trump he simply floated an idea. It was then interpreted into Trump is going to invade Greenland scare story. 

[Rasmus Jorgensen + 1,169]

5 minutes ago, NickW said:

To be fair to Trump he simply floated an idea. It was then interpreted into Trump is going to invade Greenland scare story. 

That wasn't what I meant. I didn't even have Trumps rhetoric or childdish behaviour in mind. What I meant was: 

1) Trump floats an idea

2) Idea is rejected 

3) US loses interest in even polite conversation

take-away : you are only interesting to me when I can get something that I want from you. 

[NickW + 2,714]

14 minutes ago, Rasmus Jorgensen said:

That wasn't what I meant. I didn't even have Trumps rhetoric or childdish behaviour in mind. What I meant was: 

1) Trump floats an idea

2) Idea is rejected 

3) US loses interest in even polite conversation

take-away : you are only interesting to me when I can get something that I want from you. 

Yes. Although when he was elected I was hopefully as it made a change from the usually professional politician I have been disappointed by this style of behaviour he tends to exhibit. 

[Rasmus Jorgensen + 1,169]

1 minute ago, NickW said:

Yes. Although when he was elected I was hopefully as it made a change from the usually professional politician I have been disappointed by this style of behaviour he tends to exhibit. 

I dislike Trump. I disagree with my many of his policies. 

But I do like that you appear to get what you see (although I think he is as corrupt as other politicians). 

[Dan Warnick + 6,100]

51 minutes ago, Rasmus Jorgensen said:

That wasn't what I meant. I didn't even have Trumps rhetoric or childdish behaviour in mind. What I meant was: 

1) Trump floats an idea

2) Idea is rejected 

3) US loses interest in even polite conversation

take-away : you are only interesting to me when I can get something that I want from you. 

Well, Trump lost interest.  Most of the rest of us never had any interest to begin with.  Sorry.  😐🤐

[Dan Warnick + 6,100]

37 minutes ago, NickW said:

Yes. Although when he was elected I was hopefully as it made a change from the usually professional politician I have been disappointed by this style of behaviour he tends to exhibit. 

I can understand that feeling.  I empathize.  Seriously.  But most of us accept it (we are not on your side of the equation, so..) because it is just one of hundreds of actions that he has taken that make sense in general, or, far more importantly, right the wrongs of past administrations that we didn't have a voice in (this part is not about you).  In other words, this may have been a big deal to you, but it was a blip on the radar for Trump and us.  No offense.

[Dan Warnick + 6,100]

37 minutes ago, Rasmus Jorgensen said:

I dislike Trump. I disagree with my many of his policies. 

But I do like that you appear to get what you see (although I think he is as corrupt as other politicians). 

And there I thought you were one of his biggest cheerleaders!

Corrupt?  Morally or actually?

[NickW + 2,714]

Just now, Dan Warnick said:

I can understand that feeling.  I empathize.  Seriously.  But most of us accept it (we are not on your side of the equation, so..) because it is just one of hundreds of actions that he has taken that make sense in general, or, far more importantly, right the wrongs of past administrations that we didn't have a voice in (this part is not about you).  In other words, this may have been a big deal to you, but it was a blip on the radar for Trump and us.  No offense.

The Denmark / Greenland issue is irrelevant to me. 

If however Trump / the USA is concerned about China & Russia hemogeny over the world it does need to court its allies carefully. 

[Dan Warnick + 6,100]

13 minutes ago, NickW said:

The Denmark / Greenland issue is irrelevant to me. 

If however Trump / the USA is concerned about China & Russia hemogeny over the world it does need to court its allies carefully. 

Are we concerned about China & Russia hegemony over the world?  Are our allies going to side with China & Russia if words come to blows?  Inquiring minds want to know!