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Canada, Friend or Foe

July 12, 2010

Canada has been a friend and ally for over 100 years.

Now, we are threatening that friendship because environmentalists say that producing oil from oil sands produces three times the CO2 than does oil from conventional sources.

Once again, misguided fear of global warming is dictating America’s energy policy.

TransCanada Corporation is extending a pipeline to bring more badly needed oil to the United States. But this oil is from oil sands and environmentalists don’t like that.

Congressman Waxman (D) CA is urging Secretary of State Clinton to get Canada to stop the expansion of the pipeline.

Alberta, Canada has vast reserves of oil in oil sands and is developing those reserves.

Canada has been our largest supplier of oil and wants to increase its oil shipments to the U.S. at a time when the U.S. needs more oil because of the moratorium on drilling in the Gulf of Mexico, and declining production in Venezuela and Mexico.

It’s appalling to see the administration and members of Congress lashing out at our friends and allies by castigating Canada over the pipeline.

Interestingly, Canada has options.

Discussions are underway in Canada to ship oil to China by building a new pipeline to Kitimat in North Western, British Columbia. There is also a proposal to build a Liquefied Natural Gas plant in Kitimat to ship Canadian natural gas to China and Asia.

In addition, China is interested in buying into Canada’s oil sands and is taking partial positions in Canadian companies and projects so as to avoid media coverage.

For example, China’s wealth fund invested $1.17 billion in Penn West Petroleum Ltd. to help develop Penn West’s huge oil sands resources.

Sinopec agreed to buy a 9% stake in Syncrude Canada Ltd. for $4.65 billion.

PetroChina has also invested nearly $2 billion for a 60% position in two projects of Athabasca Oil Sands Corporation.

We can threaten Canada and tell them we won’t take their oil, but China would be the beneficiary and we would be the loser.

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