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Alberta to U.S.: Use the oilsands or lose them

hypocritexposer

Well-known member
Alberta to U.S.: Use the oilsands or lose them
Posted: August 31, 2009, 6:37 PM by Ron Nurwisah
Don Martin, Canadian politics, alberta


OTTAWA -- To lift a quip from Prime Minister Stephen Harper’s Arctic sovereignty policy and apply it to the American view of Alberta’s oilsands: use it or lose it.

The Chinese government pushed its shovel deep into Canada’s energy motherlode on Monday when it announced a $2-billion stake in a five-billion-barrel reserve of “dirty oil” that Americans increasingly find unworthy of fuelling their vehicles.

The 60% claim by PetroChina in two projects owned by Athabasca Oil Sands Corp., while small compared to the great gobs of capital pouring into oilsands expansion and extraction, are the global giant’s largest investment in Canadian energy yet.

And China usually buys into product it aims to consume.

Sources in Washington predict politicians there will not be pleased at having a massive supply of secure energy on their northern doorstep slipping under Chinese ownership.

Well, too bad.

Under the greenish Obama administration, “oilsands” is becoming a dirty word as Americans take on the delusional swagger that they can be picky about which oil is good enough to buy in a recession when supply is temporarily ahead of demand.

Canadian oilsands exports are increasingly encountering U.S. political resistance at federal, state and municipal levels as low-carbon fuel standards move through the legislative process to erect barricades against an energy with an extraction problem.

But it is delusional because there is no post-refining difference between conventional and non-conventional oil and banning it in one state or city merely moves it to another, with no corresponding reduction in carbon emissions.

Yet the difference between the American and Chinese views of oilsand imports suggests that Canada is nearing a moment of decision.

It can be forever held captive to the whims of U.S. refineries, which import 60% of oilsand production or about 780,000 barrels a day. Or it can create a battle of demand between the two energy-consuming superpowers that will soon find there is not enough oil to satisfy their combined thirsts.

That will require Canada, whose pipelines now head only north and south, to punch a hole in the Rockies and open up a crude flow to the west coast, from where oil could head overseas.

Environment Minister Jim Prentice is no fan of a single-buyer market for exported bitumen, which actually sells at a discount in the U.S. compared to Middle East oil despite coming from a friendly neighbour. He’d like competition injected into the system.

“Doesn’t it help Canada’s exporter to have alternative market choices?,” he noted in a recent interview. “We need transportation mechanisms to ship it to the West Coast. Refineries in the U.S. have limited capacity and we don’t have anywhere else to sell it. Having the capacity to ship it to the West Coast would keep everybody honest, so I think it’s good policy.”

That’s so obvious as to be rhetorical, but the cost and complications of a new west-bound pipeline may be prohibitive for the private sector to go it alone.

The proposed Enbridge Inc. Northern Gateway pipeline, which was been on ice for several years, is being thawed for reconsideration.

That’s at least five years off and the project faces numerous environmental, aboriginal land claim and geographical hurdles, which is probably why they weren’t talking it yesterday — although they weren’t ruling it out in the longer term either.

But to understand China’s strategic investment interest, keep in mind that 2009 will likely go down as the first year when car sales in the Communist country beat the United States, making it the world’s largest car-buying nation.

At the risk of stating the obvious, cars consume gasoline, gasoline comes from oil and the world’s largest deposits of oil, albeit locked in tar, straddle northern Alberta and Saskatchewan.

If America doesn’t want to use it on environmental grounds, they’re only one pipeline away from losing it to someone else.

http://network.nationalpost.com/np/blogs/fullcomment/archive/2009/08/31/alberta-to-u-s-use-the-oilsands-or-lose-them.aspx
 

Broke Cowboy

Well-known member
There is almost as much oil and perhaps more, under the ground on the Saskatchewan side that has not been developed yet.

In fact I think there is a potential that Saskatchewan might prove to be bigger than Alberta over the long run.

While I am not so sure I like the Chinese as partners in this, the fact remains that a single buyer system does put Canada at risk.

Business is war.

And money talks - the Chinese have lots.

Now if we can just keep them out of our house while they buy oil - then I am - for the present - satisfied.

Still, we need to be aware that the client can become yet another elephant in the mouses bedroom.

BC
 

Broke Cowboy

Well-known member
Silver said:
Now, if they'd make room for cows on those super tankers we may really have something. :D

Silver

That may not be as far away as you think.

Canada and most Canadians are tired of being held ransom in a single buyer system - and have started to move away from this system.

Despite the historically good relations Canada and the U.S. of A. have shared over the past 100 years - there is a growing underground swell of resentment against many of the U.S. of A. protectionist attitudes and how those new policies have a far reaching and mostly negative effects on their northern neighbour.

I have to admit that at times I get caught up in it as well and have in the past week had to remind myself I have family in a couple of mid western States and I cannot paint with a broad brush as some are wont to do.

As Canada struggles to maintain those business relationships with a protectionist government south of the border and to a great extent has been rebuffed, the efforts to open our borders wider to continue to feed our own economic machine are no longer being focused south of the border. Our businesses and governments have come to realize that our neighbour no longer values Canadian products.

This attitude has actually created unemployment in certain sectors in the U.S. of A. However "buy American" when more than 1.5 billion dollars a day of trade used to take place between Canada and the U.S. of A. is simply cutting your nose off to spite your face. Surely out of that 1.5 billion doollars a day trade there are a FEW jobs that rely upon trade with Canada?

But the U.S. of A. soldiers on with its "look at life through a straw" mentality that actually seems to grow worse with time.

Other countries are recognizing they have opportunity here in Canada - all they have to do is come knocking - and many are. Several Asian and European commities have visited our own local area over the past six months - all looking at various business potentials and ag potentials.

When some were at our place they were interested in the vegetables but many admitted the beef was good. They were impressed with the amount of water and annual records of moderate weather which guarantees decent ag reliability.

I found it interesting they were looking at food but quite concerned about the reliability of available water and past weather history - and they loved it here.

So, there are many items that come up for negotiation in these circumstances. Ag is one of them.

The markets will open and it is my belief Canada may very well stand to be in a faster and healthier recovery position than our neighbours to the south as Canada does not have a similar protectionist attitude.

Going to be some interesting times to the south as the Chinese are now also one of the largest owners/controlers of arable land in the world - they have also begun to secure this arable land on all continents for their own use.

They see Canada as a vast resource. There are disadvantages to this - so Canada must play her cards well or lose her soul - but Canada cannot isolate herself as she does not have the ability to become a completely isolated entity.

I believe "buy American" and American protectionism - especially with her one most important neighbour will do nothing more than isolate and slow/reduce the recovery time of the U.S. of A.

Canada is on the cusp and oil - is the key. Canada has reserves that are immense - possibly larger than most if not all other countries - and there are other nations that want it now. They will pay and they will not care about the Washington environmentalist - and the dirty oil comments.

If things do not change where will the U.S. of A. be in ten years time?

Canada will no longer need them. Protectionism south of the border is slowly pushing the old friend to the north out of the bedroom and onto the road to a new life - one that migfht very well NOT include the U.S. of A.

Unfortunately no nation is an island - it seems to me the U.S. of A. has not learned this.

Energy will become even more in demand - others are coming and the energy deal will out of necessity include side deals. Agriculture stands to win in this one over the next ten to twenty years.

So hang in there Silver - tha fat lady has yet to sing.


When she does - the cup is coming home.

BC
 

per

Well-known member
Silver, I watched them load a Sheep Ship in Fremantle one time. I could not believe how many thousands sheep went on that thing along with hay and water. The sheep were cruising to Saudi Arabia so the Saudis could have fresh mutton. I also see the day coming when north south is not our most favored route. No offence to you folks in the States, but your leadership has chosen a different path that doesn't include us. And before OT jumps in, it started before this administration but looks to continue under BO.
 

Broke Cowboy

Well-known member
per said:
Silver, I watched them load a Sheep Ship in Fremantle one time. I could not believe how many thousands sheep went on that thing along with hay and water. The sheep were cruising to Saudi Arabia so the Saudis could have fresh mutton. I also see the day coming when north south is not our most favored route. No offence to you folks in the States, but your leadership has chosen a different path that doesn't include us. And before OT jumps in, it started before this administration but looks to continue under BO.

I watched a lot of cattle leave this area for Russia - they were shipped out of the port in Montreal - literally convoys of trucks headed east.

The move is on to ship more. If information from a local buyer is correct there is also some serious moves to put a couple ship loads into the middle east.

As for the north south trade route - per is correct - it is going to get a lot smaller - especially since the continued and increased efforts of the latest U.S. administration.

This is going to eventually hurt the businesses in the south a lot more than those in the north over the long run.

In my opinion this is all because we are blessed to be a net exporter of energy - other countries want it and are prepared to enter into some serious side deals to sweeten the pot.

Regards

BC
 
A

Anonymous

Guest
per- I don't think its only a north south thing-- its a global issue....Many folks are getting totally P.O.ed over governments sellout of this nation and our industry and home grown products to every Podunk country of the world...And the fact that we let US owned companies and Multinational Conglomerates- that expect all the rights and privileges and PROTECTION of a US company to move all their production overseas- and then ship it back to sell to the US consumer to compete with those producers in the US that are paying the bill- is starting to get old and not set well with a few.....

You spoke of oil-- that is a bad issue to many landowners in my area- that sit on the top of the biggest new oil find in the world- have the drilling spots marked off in their fields- but may be years or never before they see a drill- because all the rigs are off on some foreign soil drilling so the US can buy imported oil....
 

hypocritexposer

Well-known member
You spoke of oil-- that is a bad issue to many landowners in my area- that sit on the top of the biggest new oil find in the world- have the drilling spots marked off in their fields- but may be years or never before they see a drill- because all the rigs are off on some foreign soil drilling so the US can buy imported oil....

OT, rigs that are used overseas in most cases are different than the ones that would be used in North America. Where have they been shipped to?

They have not been shipped anywhere, they are sitting idle.

Rig Count

US 999
Canada 184
International 974

change over year ago
US -1032
Canada -252
International -118

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

ScreenHunter_02Sep010907.gif
 
A

Anonymous

Guest
Is that working rigs- or stacked rigs your little chart portrays?

Well- when you talk to the oil people- they say they are all in use- and/or mostly overseas where they can get the oil much cheaper....And that oil rigs are no longer made in the US- China now-- that is using everything new for their own global oil production endeavors.....
 

hypocritexposer

Well-known member
Oldtimer said:
Is that working rigs- or stacked rigs your little chart portrays?

Well- when you talk to the oil people- they say they are all in use- and/or mostly overseas where they can get the oil much cheaper....And that oil rigs are no longer made in the US- China now-- that is using everything new for their own global oil production endeavors.....

rig counts are working rigs. There are enough stacked, if they are suitable to do the drilling that is required, why would the US companies build more.

The people you are speaking with, may be talking all the rigs from a small company or service rigs or all the rigs of one type.

The US or big 5 companies are losing their control over global resources of oil. They are sitting at about 5-8% of the total reserves (conventional).

National companies are gaining control over more of the global conventional oil reserves.

US companies are using their exploration funds to develop alternative energy. Take a look at BP.

US independence of foreign oil is a myth. % of imported oil used will always increase over the long term.

Now, I'm not saying that it is impossible to decrease the total amount used

International Rotary rigs operating by region

Region drilling change ( previous month)

Europe 73 -4

Middle East 249 +2

Africa 57 -7

Latin America 351 +8

Asia Pacific 244 +8
 
A

Anonymous

Guest
US companies are using their exploration funds to develop alternative energy. Take a look at BP.

About time they did that...But in the meantime we buy more cheap imported oil- and send more money to the Mullahs, Princes, and Chavez's that really don't like us that well....

They should have listened to old Jimmy Carter back in the 80's- put in a long term energy plan- and could have been working for the past 30 years getting us off the dependence on foreign oil....
 

hypocritexposer

Well-known member
Oldtimer said:
US companies are using their exploration funds to develop alternative energy. Take a look at BP.

About time they did that...But in the meantime we buy more cheap imported oil- and send more money to the Mullahs, Princes, and Chavez's that really don't like us that well....

They should have listened to old Jimmy Carter back in the 80's- put in a long term energy plan- and could have been working for the past 30 years getting us off the dependence on foreign oil....

Congress passed an energy plan in 2007, how's that working out?

Every President since Nixon has spoke about a long term energy plan and independence of foreign oil.

You still have not figured out how oil is priced, have you. It is a global market. Having more middle east oil on the market lowers global price and increases profitability.

Without the US oil companies making a profit, they will not be able to put as much into alternative energy development. If they were to restrict their income to Domestic production, it would be the "Mullahs, Princes, and Chavez's ", that would also be developing alternative energy.
 

Broke Cowboy

Well-known member
Oldtimer said:
Snip ..... we let US owned companies and Multinational Conglomerates- that expect all the rights and privileges and PROTECTION of a US company to move all their production overseas- and then ship it back to sell to the US consumer to compete with those producers in the US that are paying the bill- is starting to get old and not set well with a few.....

You spoke of oil-- that is a bad issue to many landowners in my area- that sit on the top of the biggest new oil find in the world- have the drilling spots marked off in their fields- but may be years or never before they see a drill- because all the rigs are off on some foreign soil drilling so the US can buy imported oil....

I have to add to the first part by stating you benefitted from this with cheap pricing. Without it your parts and pieces would have been far more expensive - you are looking at life through a straw. To ignore the fact that you benefited from this simply shows a clear lack of understanding of how business works today.

There were reasons for moving off shore and all you have to do is look at YOUR OWN investment portfolio - if you have one.

You were indeed part of this reason - YOU demanded profits and your union folks demanded higher wages and your government demanded higher taxes.

Seems there is a serious denial taking place in your part of the world - but then again we can always blame it on Bush can't we.

They would not have moved off shore if your wages and taxes and profit demands had not driven them there. It is a two edged sword and you refuse to see this.

Someday I hope to actually see you address these issues honestly instead of obliquely with blame and more blame.

All you really need to do is look in the mirror to see the cause.

As for oil - you have some serious environmentalists - especially now with Obama - lobbying hard to prevent the use of Canadian oil.

Your Mr. Obama may be the man that puts us in the drivers seat - so love him or hate him - we now may actually have the opportunity to stick it back at him - unless of course he wants to pay up. Most money gets the contract.

Meantime you guys get the shaft.

You are only a few months away from oil real shortages if you stop importing.

You are YEARS away from alternative sources if you throw billions at it starting today.

To start up an oil program in the U.S. of A. does not happen over night - it would take you years to become self sufficient - especially when the courts get involved with the land owners who have the "not in my back yard" mentality.

You guys cannot have your cake and eat it too.

In the meantime you push away your friends. And they have started to find new ones - meaning when those contracts come up for renewal you will be paying more for them - or they will go elsewhere.

You can say who the hell cares - but that in turn simply makes it tougher for your youngsters to find work. And keeps your economy slowed down.

The road allows for travel in both directions but you do not seem to see this.

You cannot be an island on this planet - not now - and it is time you realized that - before you have experienced irrepairable damage to your economy.

That money China is investing in Canada - probably comes from U.S. of A. backed notes.

I will say it again:

Someday I hope to actually see you address these issues honestly instead of obliquely with blame and more blame.

Regards

BC
 

Yanuck

Well-known member
yes very good post...one of several you've made in the past few days, I especially liked the one from yesterday afternoon on CT..yours as well hillsdown! :nod:
 

hypocritexposer

Well-known member
Yanuck said:
yes very good post...one of several you've made in the past few days, I especially liked the one from yesterday afternoon on CT..yours as well hillsdown! :nod:

wow, and to think the articles I post are anti-American. They do create some political discussion, don't they?
 
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