Chinese Interest in Canadian Oil Intensifies

Our worst fears may be coming true: the Canadian PM is travelling to China to discuss selling them the oil from Alberta. Environmentalists here in the U.S. are opposed to the Keystone XL Pipeline, which would move that oil directly to our refineries on the Gulf Coast. That would give us here in the States direct access to the resource, and avoid having it shipped in tankers across the Pacific Ocean (a much more environmentally dicey notion).

But with Obama stalling on the pipeline (not wanting to piss off either pro-job union constituents, or the environmental extremists), China’s continuing interest in that oil will become more and more relevant to the Canadians.

This is one of the things Obama may well mess up that would be unfixable—legislative blunders such as the ACA (“Obamacare”) can be repaired, but passing up the opportunity to build a critical piece of infrastructure—and having the Canadians instead build their own pipeline, to their West Coast, where the Chinese can load it onto tankers—will have ramifications for generations to come, and may well prevent North America from gaining energy independence.

Jazz Shaw:

I’ve lost count of how many times I’ve reported on the delicate balance between Canada and the United States when it comes to energy supplies and the politics of petroleum here at home. As recently as last month, Ed was sounding the warning bells, noting that Canada has plenty of buyers for their oil and, while they would far prefer to do business with us, their patience is not limitless. And now, the Prime Minister of Canada is scheduling a few new meetings, which could indicate that he’s simply lost faith in Obama’s ability or intention to deliver.

Canada is now looking to Asian countries to market its abundance of oil, natural gas and minerals as plans to build the proposed Keystone XL pipeline have stalled with the U.S. administration.

Prime Minister Stephen Harper will travel to China next month to discuss selling Canada’s bounty to the rapidly growing nation.

The preferred initial plan was to build the $7 billion Keystone pipeline to deliver Alberta’s oilsands crude to refineries in Texas on the Gulf of Mexico.

Harper reasoned that the U.S. government would prefer to deal with a friendly neighbor to help meet its energy needs while creating thousands of jobs.

With widespread opposition by U.S. environmentalists, the Obama administration has delayed its decision on whether to approve the project proposed by energy giant TransCanada Pipelines.

The new plan would market to China and Asian countries through the proposed Northern Gateway pipeline that would transport Alberta’s oil and natural gas to British Columbia for shipment by tankers. . . .

This doesn’t mean that all is lost… yet. Harper would be foolish indeed not to keep all of his options open in terms of making the best economic deal for his nation, and there’s no indication that he’s going to ink some definitive deal on this first trip. Also, this could be a calculated move to shake up Obama a bit and possibly spur him to quicker action. Plus, both pipelines face significant challenges in getting them built, so we’ll be afforded a bit more time, as the Northern Gateway isn’t going to just leap into existence overnight.

But that doesn’t mean we have forever.

No, indeed. I only hope that the Canadians will wait just a bit longer. If Obama doesn’t move on Keystone XL, the GOP candidate should make this a major issue in the coming campaign. If this pipeline isn’t built, generations of jobs and energy will have been irretrievably lost.