Such a neat area. We stayed in Oakland, MD, and traveled in every day. The wells that were drilled were among the many windmills on the "mountain" and was near their power plant.
OT: Chinese company buys West Virginia....sorta
- Thread starter The Spin Meister
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Such a neat area. We stayed in Oakland, MD, and traveled in every day. The wells that were drilled were among the many windmills on the "mountain" and was near their power plant.
All true.
Also true is the fact that we could sell only 90 day treasuries at near zero interest if we wanted to.
Also true is the fact that Congress could change the laws that require treasuries to be sold in equal amounts to deficit spending.
Selling bonds was necessary when we were on gold standard, now it's just "welfare for the wealthy".
Unfortunately, I did not make it into Davis while on location. Spent most of my time on-site, and near the hotel in Oakland
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While I understand your skepticism knowing the history of coal & WV, the Chinese are not buying the assets. Almost all the oil and gas fields are owned by coal companies and or private owners. Also, most all the fields are already leased to US E&Ps (exploration and production) companies that will do the drilling and sell the gas/oil. The Chinese have no experience in fracking so even if they buy the leases they will still have to subcontract to US firms.
The Chinese have signed on to build out facilities to take the raw oil, gas and liquids and process them into things like alcohol, fuel, acetone, xylene, polypropylene, ethylene, and more. They may take it a step further and make various plastics, synthetics, pharmaceuticals, and more. They could ship all those materials to China if they have a need for them there.
It is the profits that go to China, as others have said. And those could be substantial. But there are dozens of fields across the US so they will not dominate the market and set prices....unless they are far more aggressive in buying up other fields. This is also a way for them to learn our technology so they can use in China or really anywhere on the planet. I think that is the biggest goal of theirs.
Country boundaries are becoming obsolete in the business world. We live in a world economy, where investment and resources move more or less freely around the globe. While trade agreements, tax policy, and immigration regulations can have some impact, people anywhere in the world will invest anywhere in the world where they believe they will get the maximum risk adjusted return. If someone wants to invest in the USA, that’s a good thing. It’s a free market.
They can't just invest in anything, there are restrictions for foreigners.
While the United States has a general policy of openness to foreign investment, it does restrict foreign investment, including from SWFs, in certain U.S. assets. The U.S. government has issued policy statements supporting openness to foreign investment and entered into international agreements to protect investors. However, sectors with specific restrictions on foreign investments include transportation, communications, and energy. For example, foreign governments may not be issued radio communications licenses and foreign entities are not allowed to own or control more than 25 percent of the voting interest of any U.S. airline. In other cases, foreign investors can purchase companies or assets in a sector but face restrictions on their activities once they invest. For example, foreign companies can invest in U.S. banks, but if a company's stake exceeds 25 percent or the company would control the bank, the company must receive prior approval and become regulated by banking regulators and would be limited in the types of nonbanking activities in which it can also invest. Foreign investors can generally invest in U.S. agricultural land, but must disclose purchases above certain thresholds to the Department of Agriculture (Agriculture). In addition, while not specifically a restriction on foreign investment, a recently strengthened U.S. law authorizes interagency reviews of certain foreign investments, potentially in any sector, for national security considerations. Most federal laws limiting foreign investment were put in place decades ago in response to national security or economic concerns at the time. GAO's analysis of state-level restrictions on foreign investment indicated that some states had restrictions on foreign entities' ability to invest in real estate, including agricultural land, and some had restrictions on foreign government ownership of insurance companies. The agencies responsible for enforcing the U.S. laws affecting foreign investment--Agriculture, Department of Transportation (DOT), Federal Reserve Board, Federal Communications Commission (FCC), Nuclear Regulatory Commission, and Department of the Interior--have processes for addressing key elements of enforcement, including those for (1) identifying all transactions subject to the law, (2) verifying the identity and amount of foreign ownership, and (3) monitoring changes in ownership. To identify investments potentially subject to restrictions and disclosure laws, each agency largely relies on requirements that entities seeking to establish new operations or invest in existing ones must first seek approval or licensing, or disclose their activity. To verify foreign ownership and ensure limits are not exceeded, agencies obtain and verify information about investor identities through information provided by the investors. Finally, to ensure that subsequent changes of ownership are disclosed and do not exceed legal limits, agencies review information from required ownership change declarations. Some agencies reported additional processes to identify new investments and ownership changes such as monitoring press releases, and receiving tips from competitors. Some agencies, but not all, reported using data from other government or private sources to independently verify changes in ownership information self-reported by entities in their sector.
Also... If they invest in infrastructure they can later sell it but they can't take it with them.
I wrote a college research paper, back in the 70's about what happens when technology and companies outstrip the necessity of physical boarders. Will there be an Apple Army to protect their interests if the USA can/will not?
I am actively working with companies that want to/need to tear down money movement barriers worldwide.
Interesting times.
Did I say it was? No, but it is the reason the Japanese stock market has never fully recovered from its 1988 peak. Almost 30 years their market has lagged.
At one point, the real estate market in Japan was worth "18 Trillion Dollars." The Emperors Temple with the property was worth more than the country of France.
Their economy totally collapsed within a year of those astronomical real estate values, and their GDP has not recovered sufficiently for the stock market to come back.
I work for a specialty contractor and our company has had a decent presence in the various petrochemical facilities in West Virginia - Kanawha Valley in Charleston region and the Ohio River Valley from Parkersburg upstream.
For the past 10 - 15 years, the facilities have employed more contractors in the demolition of their operations than construction and/or maintenance of the facilities. It has been extremely frustrating seeing these plants being eliminated and the associated jobs (both in plant and plant support) being lost to ???.
If the Chinese want to invest in development of these types of facilities, I personally welcome it because the US Corporations that owned and operated them let the facilities deteriorate to the current state.
One last point, when Shell announced the site for their new cracker facility in Monaca, PA, one of the biggest impacts of that facility will be that it will probably spawn 10 other facilities that will utilize the cracker's end product in production of other goods. There were two other cracker facilities in the upper Ohio Valley - across the river from Moundsville, WV, and just south of Parkersburg, WV. I think that there may just be a lot of potential industrial development in the region in the next 10 years.
For the past 10 - 15 years, the facilities have employed more contractors in the demolition of their operations than construction and/or maintenance of the facilities. It has been extremely frustrating seeing these plants being eliminated and the associated jobs (both in plant and plant support) being lost to ???.
If the Chinese want to invest in development of these types of facilities, I personally welcome it because the US Corporations that owned and operated them let the facilities deteriorate to the current state.
One last point, when Shell announced the site for their new cracker facility in Monaca, PA, one of the biggest impacts of that facility will be that it will probably spawn 10 other facilities that will utilize the cracker's end product in production of other goods. There were two other cracker facilities in the upper Ohio Valley - across the river from Moundsville, WV, and just south of Parkersburg, WV. I think that there may just be a lot of potential industrial development in the region in the next 10 years.
They aren't strategic thinkers of their own free will. It's because the party mandates it. So long as your "day trade" doesn't conflict with long-term state strategy then you're okay to trade on. Such is the premise of China's Opening Up. One day the party approached entrepreneurs and said, we'll make you rich beyond your wildest dreams in exchange of subservience. And so the Faustian bargain was made. Now China's GDP is greater than ours. But remember this: Jack Ma may assume the persona of a Steve Jobs or a Jeff Bezos but he's anything but free. And therein lies the trade-off.
I know you meant to finish it so I will. Providing there's someone willing to buy the new issue. The problem occurs when there's no buyers to help pay our bills. If it sounds like a giant kiting scheme then it's because it is. And it depends solely on the creditworthiness of the debtor. It won't take much to lose our AAA rating. States fighting federal government? Check. Government shutdown? Check. Civil unrest? Check. Tax revolt. Coming soon to a theatre near you.
Why do you think that? This "deal", if it ever comes to full fruition,of which I am skeptical, will exploit energy deposits that no one else is. It will create considerable economic growth, not only in WV, but elsewhere.
that is true. the shale gas is going to put a lot of heavy industry in that area for the super cheap nat gas. that will bring a lot of high paying blue collar jobs.
I know you meant to finish it so I will. Providing there's someone willing to buy the new issue.
That has never been a problem. The Federal government creates money out thin air when it spends. This money shows up as reserves in the banking system. The fed drains some of these reserves via treasury sales to maintain it's target interest rate. Treasury auctions never fail because the reserves needed to purchase the treasuries already exist. Most treasury auction are over subscribed.
The problem occurs when there's no buyers to help pay our bills.
No buyers are needed to help us pay bills. The federal government does not need to obtain dollars from anyone in order to spend.
If it sounds like a giant kiting scheme then it's because it is.
No it's not.
And it depends solely on the creditworthiness of the debtor.
Our government can always pay debts denominated in dollars.
It won't take much to lose our AAA rating.
That is total bs. It makes no sense at all to rate a monetarily sovereign country less than AAA.
Art I suppose my response is becoming a theme. Trust or lack of. There will be benefits for the USA and it's citizens but whats behind the curtain. I am 100% certain that China will benefit much more. Keep in mind these are not companies that are free, independent thinkers. They are 100% Chinese Govermental entities with great NATIONAL interest to advance CHINA.
The coal companies which own gas rights are themselves owned by people who do not live in WV, and there is no reason to think these people who devastated the environment in service of coal will hesitate to further destroy it in service of gas.
There'sa lot to what you say, but if WV-owned businesses do not run these plants, or the plants are in other states, WV's long history of giving it's resources away will continue.
We just announced a record trade deficit with them, caused by our habitual savings shortfall. China has been a resource investor for more than a decade. Buying those resources, like energy, farmland etc., because our consumption society, the counterpoint to their saving society, has given them the financial resources to invest both domestically and increasingly overseas.
They will ship product to markets that give them the greatest return on capital,as they should like any investor, and use those resource investment in their national interest, not ours.
The US is the worlds largest net external debtor by a mile. Some, like Krugman et.al, will say no problem. They may be right, they may not.
This reminds me of a certain political group that went apesh*t when the government gave a certain russian company control of some uranium. Will they go apesh*t again, it would be consistent.
Doesn't make sense Dem. First of all, large public companies are all owned by people from around the world. There's nothing unique about energy companies. Second, whoever does business in WVa is required to comply with state and local environmental laws that are voted on by state and local officials.
Your comment about giving their resources away is perplexing because you also don't want them to use their resources themselves.
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Well, a Chinese company wanting to invest billions in communities sounds a lot better than a politician promising to bankrupt these communities because people like Tom Steyer pull their strings
Not a lot of poor people own a lot of stock. Agree? Ordinary WV folks were not large shareholders in the coal companies. Now they won't own any share of the finished product, and a damn small share of the gas.
But, they will be left with the environmental devastation, and the diseases.
true, but the fact that it's a Chinese company makes it no worse (or better) than if it was some group of American pirates- like Bain Capital, for example
No doubt coal operators did serious damage to WV. Shame is it is a beautiful state.
But hopefully this is different. Environmental laws are so much better than they were before. Just be sure they are enforced.
And coal was shipped out because there was little local market for it. Steel mills and power plants across the country used coal so it was shipped to where it was needed. And coal was burned as is and not processed into some other product.
The raw gas/oil from wells can and will be processed into hundreds of other products. It is usually cheaper to do that near the source and ship the finished product afterwards. Thats why Shell is building a $8B cracker plant north of Pittsburgh. Cheaper to build that plant than pipe all the ethane to Tx, make the ethylene, and then ship it back to east coast.
WV, SW Pa, and SE Oh will be a major source of the petro chemicals for the country for the next 50-100 years. Should be good times ahead for all.
I sure hope that this political group opposes or deeply investigates the parameters of this deal. Think about this, What is "China Kings" soul purpose? Is it to sell cheap Chinese food? How many Americans work in these Establishments? Why is it this way? The people that work there are not free, independent workers. Are they here on work visa's? Why? Could it be possible that the"China Kings" that are everywhere are part of a grander plan? I don't like the deal. Nittany look behind the curtain.
Simple solution is to do what the rest of the world did: nationalize the industry. OK I don't know what the state term would be, but just let the state claim ownership of the mineral assets like Mexico and Venezuela. Better yet, just let the US government truly nationalize the assets for the good of all the people of the US.
Would WV residents be better off if their mineral rights and environmental concerns were controlled by Washington 100%? Be careful what you wish for since money would only flow down the Potomac and not back to WV. History should remind you of mistakes but not prevent progress into the future.
WV is kind of third world-ush. The few rich folks have lots of political power. Environmental regulations get blown off.
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Those cracker plants North of Pittsburgh are already burning and using West Virginia gas from the Wheeling area. Just saying, WV has a long history of snatching defeat from the jaws of victory.
I never said anything about the locals owning stock but more will have jobs. The company will have to follow federal, state, and local environmental laws.
Come on a tour of the stripped out southern coalfields, the destroyed streams and poisoned water, and tell me they will have to follow the laws. Lol.
We mined billions of ton of coal and lots of people got mine work, but the coal largely got used elsewhere. Most of the steel mills and power plants are ELSEWHERE.
A LOT, if not all of this gas will go elsewhere, too. Once the wells are drilled and the pipelines laid, there are not that many jobs in gas until you get to the plants that crack it to make products.
Those plants will be built in states near WV that also have gas. The Chinese are going to build these plants in places that have no broadband internet? Surrrre.
Have you ever even driven through this state?
We just print money and pay them.....its pretty much what we have been doing the last 20 years! even more so the last 10 or so.......but in all seriousness they need a strong America as well or their economy would go to crap, as long as the dollar is world currency America is the standard and I don't see it changing any time soon despite our dysfunctional political climate
In the 70’s and 80’s the Japanese bought up American. In the 90’s politicians sold out America thru trade agreements. In 2000’s the Chinese began buying up America. Makes you wonder how there’s anything left to take.
