January 29, 2012
Energy Security: China is hungry for Canadian oil. And Canada plans to diversify.
In a widely-circulated AP article today, Rob Gillies reported that "with pipeline to US on hold, Canada eyes China". This development is also likely to become a political issue in the ongoing American presidential campaign. Historically, virtually all of Canada's oil production has gone to the United States. Excerpts:
Prime Minister Stephen Harper says Canada's national interest makes the $5.5 billion pipeline [a non-American one now seriously being discussed in Canada] essential. He was "profoundly disappointed" that U.S. President Barack Obama rejected the Texas Keystone XL option but also spoke of the need to diversify Canada's oil industry. Ninety-seven percent of Canadian oil exports now go to the U.S.
"I think what's happened around the Keystone is a wake-up call, the degree to which we are dependent or possibly held hostage to decisions in the United States, and especially decisions that may be made for very bad political reasons," he told Canadian TV.
Alberta has the world's third-largest oil reserves after Saudi Arabia and Venezuela: more than 170 billion barrels. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025, which the oil industry sees as a pressing reason to build the pipelines.
Meanwhile, China's growing economy is hungry for Canadian oil. Chinese state-owned companies have invested more than $16 billion in Canadian energy in the past two years, state-controlled Sinopec has a stake in the pipeline, and if it is built, Chinese investment in Alberta oil sands is sure to boom.
Posted by Holden Oliver (Kitzbühel Desk) at January 29, 2012 12:59 AM