Alex Turnbull

Because particularly in the case of some sort of Taiwan or any other security contingency, China could essentially put a blocking presence between Australia and the US, and I'm Australian, I care about that.

They could also prevent US force projection or resupply to Taiwan in some sort of conflict there.

They would essentially be able to prevent the US having free or unmolested operations anywhere

in the Pacific pretty much all the way to Hawaii.

It's entirely possible.

This crunch is now getting very severe in Asia.

You are seeing China allow select cargos of diesel fuel oil to places like the Philippines and Vietnam.

I'd be shocked if there wasn't an ask on the other side of that.

So Taiwan's grid relies very heavily on gas-fired power, all supplied by LNG.

Summer is when it's really hot and humid in Asia, and that's when the household and non-industrial demand is very high.

The other large sources of power demand in Taiwan, of course, are things like petrochemicals, and that goes into things like the semiconductor sector.

So we're very quickly going to get into a, not so much guns and butter, but air con or chips type scenario in Taiwan.

And that's going to lead to some very hard choices

in a democratically elected government as to whether you support your voters who want air con or support US interests to do a massive AI build out.

Sure, so you get into the summer and you essentially have to cut your energy demand by

15% maybe.

And you will have to essentially choose between running your industries for the export sector, so producing silicon chips from the likes of TSMC and others, memory, and of course, AI is very memory intensive because it is currently designed.

Or you can, and you'd have to somehow go into a massive crunch in household energy demand and commercial energy demand, or you can somehow curtail the output of chips.

And frankly, the supply of chips might be curtailed anyway, because if you have a lack of petrochemical supply because of a lack of oil supply, then you might not be able to make the chips, whether you're restricted on helium or other compounds that are required in the manufacturing of semiconductors.

And that's where it would hit the U.S.