Tuesday, November 15, 2011

Canada looks to market more oil in Asia

     The delay in approval of the Keystone XL pipeline has led Canadian Prime Minister Stephen Harper to look for other markets for Canadian oil and gas particularly in China. Harper should have been diversifying markets even before this delay. China and other Asian countries need oil and probably will pay more for it than the U.S.
   Canada has deliberately made itself into an oil supplier primarily for the U.S. The NAFTA agreement cements this relationship. While Harper talks about finding new markets for our oil, the eastern provinces of Canada import almost all their oil from abroad. It would make much more sense to have oil from Alberta flow to Ontario, Quebec and the Maritimes rather than down south as far as Texas!
Obama and Stephen Harper at APEC
   Chinese president Hu Jintao has welcomed Harper's move to market oil in China. He has invited Harper to visit China next year. However, to ship large quantities of oil to China a pipeline from Alberta to Kitimat British Columbia would need to be approved. There will be considerable opposition to building that pipe line from environmentalists and first nations groups.
   Many environmentalists want to block further development of  Tar Sands oil. They claim that production of  Tar Sands oil involves the emission of far too many greenhouse gases. First nations in the area also have complaints about the effects of production on them. Given the dependence of the global economy on fossil fuels the environmental concerns will in the end not likely be powerful enough to stop further increases in production. For more see this article.

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