YOU BETCHA, AND IT SOLVES A LOT OF PROBLEMS WITH ONE (WELL-EXECUTED) MOVE, TOO
Earlier in the week, China announced, as did western bankers who watch this data, an unprecedented $1.2 trillion global trade surplus for 2025, its second 13-figure surplus in 2 years. Wowzer! Europe was pissed; having only themselves to blame. And China looked sheepishly like the cat that swallowed the golden canary, foolishly ignoring the kind of pressure this puts upon western politicians.
Oh-Oh-Oh, what to do with all that money we took in?
Now to his credit, Donald Trump has reduced America’s exposure to this gargantuan sum by 20-25%+ in the just the last few years. This, since his first term’s China tariffs, the ones the Biden Administration kept in place, with their lapdogs in the US mainstream media failing to report it.
China still needs a way to spend all the Dollars, Pesos, Euros, and any other currency it’s raking in, and do it quickly enough without sending the world into a runaway spiral of MATD: i.e. “Mutually Assured Tariff Destruction”, and the inevitable global depression and war that would follow.
But how to do it so reciprocal trade stays more or less balanced?
One Answer: America sells ‘em natgas directly from her gigantic Permian Basin, transshipped thru SE Arizona, via pipeline, to the Mexican Baja. Where it’s processed into liquefied natgas and loaded into giant, cryogenic carriers, avoiding the Panama Canal and the US westcoast’s militant longshoreman unions. Along the way, SE Arizonans and the Sonora Mexicans get to share in the gas flow for their localized needs, and pick up a tidy transit fee. Such-a-deal!
Right now all American oil & gas activities have slowed, awaiting what happens in Venezuela; but that’s something, and judging from Trump’s recent initial meeting with oil execs, that will take much longer to sort out. Given Venezuela’s vastly decayed energy infrastructure, it maybe as long as 10 years.
Using SE Arizona as a landbridge to the Pacific Rim is a far faster, more definable objective.
A planned giant natgas pipeline from the Permian hub in Waha Texas into SE southern Arizona-New Mexico is already underway. Dallas based pipeline giant, Energy Transfer LP, has committed to such, and recently upgraded its original size, with this very spur trunk-line idea to the Baja in mind.
Meanwhile, down in the Baja, the Mexicans with an initial Singapore $$$ startup investment, were planning a giant natgas cryogenic processing and port facility at Puerto Libertad, some 145 km. north of Bahia Kino.
The pre-COVID company they created with other O&G logistics experts in the US oilpatch, Mexico-Pacific, has since been put on hold, awaiting several Mexican environmental determinations, the least being how do LNG supertankers send intelligent ultrasonic warnings to whales to get out of the way? (we do this with deer all the time on US highways) Another no-brainer determination: why run the natgas pipeline from Texas thru the nearly impassable northern Sierra Madre Occidental mountain range, not to mention that route’s crazy environmental destruction vs. 90%+ less of everything bad, by running it instead through southern NM and SE AZ, and then going due south from Nogales? (KISS = “keep it simple, stupid”)
Meanwhile back in the Permian Basin (W.Tx & NM), oil company consolidation goes on with the latest proposed combo being giant superregionals, Devon Energy and Coterra, talking a merger. That entire Permian geologic formation is morphing into a domain of large, well-capitalized players that need a large, consistent customer like China, and a reasonably quick & efficient means of product delivery.
The Permian’s single biggest technical problem still remains water, and effective water reuse. There’s a multi-billion $$$ solution right now, but it’s looking for that big guaranteed customer, and their cash-flow back-buttress. A longterm supply deal with China, spending its ungodly foreign currency horde, would fit the billing.
Just the ticket for the man who’s now President, and who’s first 1987 book was entitled, “Trump: The Art of the Deal.”
Sellers is a Southpark, Roosevelt-Republican (Teddy) living in incorporated Oro Valley; his background is federal technology commercialization.
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