Canadian Oil For China

About 99% of Canadian oil exports are to the United States, but current U.S. policies are forcing Canada to build a $5.5 billion pipeline to Kitimat in British Columbia so that it can ship its oil to China.

Environmentalists are trying to kill the Canadian oil sands industry because it produces CO2 emissions. They are doing everything they can to stop the Keystone XL pipeline in the U.S. and the Kitimat pipeline, to be built by Enbridge as the Northern Gateway pipeline, in Canada.

Canada’s government, however, is saying it won’t be deterred from building the Kitimat pipeline because Canada can no longer rely on the U.S. as a good customer for its oil. The government says the pipeline would help “diversify energy exports away from the United States and more towards Asia”.

The Kitimat pipeline would carry 525,000 barrels of Alberta crude a day across the Rocky Mountains to the port of Kitimat, where it would be loaded onto supertankers for shipment to China. The Keystone XL pipeline was to carry 700,000 barrels of oil per day to the refineries located on the Gulf coast.

Canadian oil sands production is forecast to increase from 1.5 million barrels per day to 3.0 million by 2020.

Unlike our government, the Canadian government is hitting back against the environmentalists by saying, “These groups threaten to hijack our regulatory system to achieve their radical ideological agenda … They use funding from foreign special interest groups to undermine Canada’s national economic interest.” The Financial Post said, the “government is standing up to the growth-killing professional green movement.”

Canadian Natural Resource Minister Oliver said, “These groups seek to exploit any loophole they can find, stacking public hearings with bodies to ensure that delays kill good projects. They use funding from foreign special interests to undermine Canada’s national economic interest. They attract jet-setting celebrities with some of the largest personal carbon footprints in the world to lecture Canadians not to develop our natural resources.”

The Financial Post reported, “One of the major recipients of U.S. foundation backing is the Dogwood Initiative, a leading anti-pipeline group that has received funding from the U.S. Tides foundation and the Hewlett and Packard foundations. They’ve poured more than $50 million into the Dogwood’s Great Bear Rain Forest program, which aims to shut down oil tanker traffic to the B.C. coast, and hence block access to any Gateway pipeline.”

The outcome of the Kitimat and Keystone pipelines will have a profound effect on America’s oil supply.

The Canadian oil sands hold143 billion barrels of oil, right next door to the United States, compared with Saudi Arabia where there are 264 billion barrels of oil.

Canadian Prime Minister Harper has said he’ll make exports to Asia a government priority, while China has been the largest single investor in Canadian oil sands in the past few years. Sinopec has already made an initial $10 million investment in the Kitimat pipeline. Chinese oil companies have also invested $17 billion in the oil sands over the past two years.

Continued delay of the Keystone XL pipeline will exacerbate the ill will that’s being generated in Canada by the delay of the pipeline.

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