Replies

Owen: "pretty much by now everyone knows rare earth metals are not rare, but processing is.
Total Chinese monopoly.
95+% of neodymium magnets come from them.
Can the US make its own? Yes.
After 10-15 years of process development.
Is 15 yrs required to produce a single neodymium magnet? No.
You can do that in a few months.
But how long to produce domestically the amount imported from China in 2024?
That’s the 10-15 yrs."

I think your information is outdated.
What's true is that:

The US produced our own Neodymium Magnets for around 25 years, ending circa 2011, when production was moved to China.
So, we know how to do it, and we did it for decades.
In recent years, the US has returned to Neodymium Magnet production, currently at the rate of circa 3,000 tons per year, which is a drop in the bucket compared to US total consumption of some 80,000 tons per year, 90% of that in consumer electronics and other imported equipment.
The US current 3,000 tons is barely enough to cover critical national security needs and is being expanded to 12,000 tons by the end of 2028.
12,000 tons of Neodymium Magnets is enough to cover all US manufactured products' requirements, but not enough to replace magnets in imported consumer goods.
A US "green field" project to add another 10,000 tons capacity will cost ~$6 billion and take 5 years (under Trump) to 10 years (under anyone else).
But "brown field" projects to expand existing infrastructure cost only half as much and take only half the time -- as little as 2-3 years.

Bottom line: in the foreseeable future, Chinese Neodymium Magnets will continue to fill the vast majority of consumer goods imported into the US, but US domestically produced magnets will go into every US produced application, prioritized for national security and technological advancements.

Owen: "I have also noticed that after this first awareness of the situation, he stopped using (and shipping to Ukraine) precision weapons.
The inventory is all we have, and will have for 10-15 yrs. "

Domestic Neodymium Magnet manufacturing will increase from 3,000 tons today to 12,000 tons by the end of 2028.
That will supply all of our national security needs, though none for imported consumer electronics & other general applications.

Owen: "It must not be widely spoken of for fear of encouraging enemies, but this is a horrible constraint on foreign policy.
Those weapons must be conserved for something important, which Iran and Ukraine are not."

Since at least the Obama presidency, US national defense documents have identified China as the US major "geostrategic threat".
There is a long list of CCP Chinese threats to Western Civilization, beginning with military threats against Taiwan, the South China Sea and others, and including such things as intellectual property thefts, cultural corruptions, etc.

Owen: "As for oil timelines, as noted before shale wells die vertically.
Talking about Reserves is always somewhat weak. You mentioned KSA.
If you hit the Global Reserves wiki you can find things country by country.
For KSA in particular, pumping about 7 billion barrels/year, they quote a number of about 260Billion barrels in some year 20-30 yrs ago.
hen each year after that the reserves hold at that number.
Year after Year.
Same number."

Sure, I understand all that, which is why the numbers I've used here are not "proven reserves" (which are fictitious) but rather the larger estimates of "oil in place", or "oil in the ground".
Yes, you can argue against those too, however, they do represent the total potential of oil now known to be available, given necessary oil prices and extraction technology.

What "oil in place" numbers tell us is that there are huge reserves of energy remaining to be extracted as current "proven" resources are consumed.

Owen: "As for what most defines a timeline, well, of course it is war.
China consumes 17 million bpd and domestic production is 4.5 mbpd.
So they import. A lot.
It only takes the slightest interference in those imports for them to be forced . . . note that, forced . . . to grab the flow to Japan, which has zero domestic production."

Japan maintains huge Strategic Oil Reserves, approaching nearly a year's supply at peacetime usage rates.
China produces roughly 1/3 of its own peacetime oil requirements and maintains Strategic Oil Reserves to cover those imports for 121 days.
The USA's Strategic Oil Reserve, when full will cover about 90 days of US imports -- though the US is a net exporter of oil, imports are still necessary to keep some refineries busy.

So, yes, of course, wartime changes everything, however, there's no need to hyperventilate over one or two bulk oil ships being hijacked by terrorists on their way to China or Japan.
Neither country will suffer in the least from minor disruptions.

But a major war which, God forbid, lasts for months or years, is a very different situation.
And this could only happen under conditions we have not seen since 1945 -- a CCP Chinese invasion of Taiwan and closure of the South China Sea would roil the planet like nothing we've seen in my lifetime.
Every US ally from Japan, South Korea, Taiwan, Philippines, Australia & Thailand to Canada, UK & France would be forced into whatever major adjustments are necessary to deal with lunatic Chi-Com leadership.

Of course, nobody wants that to happen, but please keep in mind, if it ever did, then a few redirected oil tankers would be the least of the world's problems.

Owen: "The US responds? With what?
Escorting middle east tankers along that huge Chinese coastline north to Japan?
The first actual action will require use of precision weapons. Reluctance.
Ship oil from the US to Japan?
We don’t have enough excess for that, certainly not with the Permian peaking.
Japan is a big consumer of oil."

Japan consumes ~3 million barrels of oil per day.
China consumes ~16 million barrels of oil per day.
The USA consumes ~20 million barrels of oil per day.

Under emergency conditions:

Japan's oil reserves can last nearly a year.
Middle Eastern resupply tankers will reach Japan along the Second Island Chain, not via China's coastline.
US Gulf Coast refineries can process up to 2 million barrels per day of Venezuelan crude oil for export to Japan via the Panama Canal and north-Pacific ocean.

So, Japan will not run out of oil absent direct Chinese attacks on Japan's infrastructure, which will certainly evoke an equal and opposite response.

Bottom line: WWIII or an asteroid strike will end civilization as we know it today, but anything short of that will not destroy life on earth and, indeed, the world can adapt and respond to a lot, if we have to.

Okay, first of all the introduction of Neodymium into the discussion was to show how this magical transition to alternatives to oil, when faced with grinding scarcity, faces its own obstacles — namely no magnets for the motors.

As for MP Materials, that website is under rapid modification and I have followed the text within for sometime. Production of ore (even refined) vs production of magnets far too often gets presented as the same thing, which it is not. Rare Earths (the focus was neodymium and samarium) were the #1 topic at the Xi trade talks in S. Korea. That is not consistent with belief that the US can readily replace Chinese inputs — and yes, to national security requirements.

The probably most quietly important development on this matter took place just a few weeks ago, when Ford Motor Company announced that their application for magnets from China had been approved after 8 months. The small print said “these products must not have any military application and if it is found that these products were transferred by Ford to any sanctioned entities, all magnet shipments to Ford will end.”

The US, in December, announced a $12 Billion Taiwan weapons package. Two days later China announced sanctions against all US defense firms including some senior executives of those firms (who cannot now fly over any Chinese held territory, including oddly, large swaths of Africa) without being seized.

This is why the US made them the #1 priority in the trade talks. Rapid replacement would have made them 0 priority.

Now then, some oil matters:

The world of oil consumption has evolved to be embarrassing and controversial. The World Statistical Review releases June of each year so our newest info is 2024, until June.

Japan consumption, 3.24 mbpd. Pop 123.3 million.
KSA consumption 3.96 mbpd with Pop of just 37 million.

This is a Japan cut almost in half over just 20 years. Population loss nowhere near that. In contrast, the Saudi increase ran afoul the Green crowd globally. The Saudis have challenged the consumption number for Japan, claiming it is intended to humiliate the Saudi royal family.

Regardless, the Middle East flow to Japan is along the Chinese coast and it is that which is the easiest for the Chinese to grab if somehow their own imports were obstructed.

Chinese domestic production is near the Daqing fields of Manchuria. Their offshore stabs of the sea floor have been many, with the usual declarations of potential, but nothing is flowing. Other than near the Senkaku islands, there is likely nothing there, and Senkaku is Japanese.

Japan’s SPR is about 200 days of crude capacity, and this must be reduced by 12% because storage is typically in rock structures that absorb oil. All countries face this. You can not recover every barrel you inject into an SPR. Then there is the flow rate issue. The US SPR is far larger than Japan’s, but the flow rate outwards from the US SPR is only 4 million bpd, only 20% of daily consumption. Japan would face the same issue and so the 200 days becomes much longer because they cannot extract it at 3 million bpd. Their society would face a slash to daily consumption.

This stuff has been thoroughly analyzed. There are no magical solutions.

Of interest: https://tinyurl.com/mryycve7 this is Google Earth’s look at the Neodymium production region of China. Scroll upwards on the map a few miles north to see size. Then do the same for the MP Materials facilities/mines.

Not even in the same ballpark of extent.