COMMENTARY—ProspectingJournal.com—With the election looming and Hope and Change ironically finding traction in a movement that’s fighting against the US government, it’s really no surprise that Obama decided to kill the Keystone XL pipeline . . . for now. After all, having recently achieved the lowest approval rating of any U.S. president in modern history, the man could use some votes.
Environmentally, the pipeline presented obvious concerns. Approximately 700,000 barrels of crude would have meandered to US Gulf Coast refineries daily. Passing through fragile ecosystems, the pipeline begged the what-if scenario of spills, leaks and even sabotage.
But just like all that beautiful oil already killing everything in the Gulf, pipeline oil is more about posturing than protecting nature. For now, Obama doesn’t want to alienate his traditional support base. . . . But what about the economy? Surely the dire unemployment situation gripping the US and Europe and the growing awareness that the world is inching closer to full-blown conflict over oil are just as important as stopping evil Canucks from sending their dirty oil across the precious American lands?
The administration is, of course, allowing TransCanada to reapply with a new application for an alternative route, which would add considerable delay; in other words, the administration is telling us that they will likely approve it after Obama gets elected. Yes—it’s that simple. The US (and the rest of the modern world) is willing to accept blood oil from war-torn countries in the Middle East. But, as the saying goes, what you can’t see won’t hurt you. And on that note: Canada exports 2 million barrels of crude to the US per day anyways, of which 1.5 million comes from the oil sands.
There is also the fact that bitumen is expensive to extract and cannot compete directly with the shale oil coming out of the Bakken oil basin, a basin that has pushed US oil production to its highest level in a decade. For now, it may be best to keep our expensive stuff in the ground.
So, China. Harper must (I would hope) be spending a large portion of his day discussing the impact of the proposed Northern Gateway pipeline project, which would stretch for 1,170km from Alberta to the BC coast. The $5.5 billion project, backed largely with Chinese money, is already behind schedule. And with the US shunning Keystone for the time being and the threat of global depression weighing on everyone’s mind, construction of the Northern Gateway is a real possibility.
After all, Canada needs to branch out. The US is the most indebted country in history and is barely growing, which is an alarming fact when you consider that the majority of our exports are destined for US consumption. China, on the other hand, is still growing above 8%. The western economies are all but stalled; Asia, not so much. Of course, a lot of that nasty US debt is now held by a nervous Chinese empire and then there’s rumours flying around about China’s bubble economy . . .
The situation is difficult and the livelihood of our country, whether we like it or not, is at stake. Having rested on our laurels for the last decade on the commodities boom, we are largely saved by selling our huge (and lucky) supply of resources; we definitely don’t manufacture much anymore and innovation is constantly disappearing under a culture of red tape. If you had to choose to sell to China as quickly as possible or wait until after the US election to try again for Keystone what would you do? That’s the quadrillion-dollar question.
Keystone Death Puts Pressure on China Deal
COMMENTARY—ProspectingJournal.com—With the election looming and Hope and Change ironically finding traction in a movement that’s fighting against the US government, it’s really no surprise that Obama decided to kill the Keystone XL pipeline . . . for now. After all, having recently achieved the lowest approval rating of any U.S. president in modern history, the man could use some votes.
Environmentally, the pipeline presented obvious concerns. Approximately 700,000 barrels of crude would have meandered to US Gulf Coast refineries daily. Passing through fragile ecosystems, the pipeline begged the what-if scenario of spills, leaks and even sabotage.
But just like all that beautiful oil already killing everything in the Gulf, pipeline oil is more about posturing than protecting nature. For now, Obama doesn’t want to alienate his traditional support base. . . . But what about the economy? Surely the dire unemployment situation gripping the US and Europe and the growing awareness that the world is inching closer to full-blown conflict over oil are just as important as stopping evil Canucks from sending their dirty oil across the precious American lands?
The administration is, of course, allowing TransCanada to reapply with a new application for an alternative route, which would add considerable delay; in other words, the administration is telling us that they will likely approve it after Obama gets elected. Yes—it’s that simple. The US (and the rest of the modern world) is willing to accept blood oil from war-torn countries in the Middle East. But, as the saying goes, what you can’t see won’t hurt you. And on that note: Canada exports 2 million barrels of crude to the US per day anyways, of which 1.5 million comes from the oil sands.
There is also the fact that bitumen is expensive to extract and cannot compete directly with the shale oil coming out of the Bakken oil basin, a basin that has pushed US oil production to its highest level in a decade. For now, it may be best to keep our expensive stuff in the ground.
So, China. Harper must (I would hope) be spending a large portion of his day discussing the impact of the proposed Northern Gateway pipeline project, which would stretch for 1,170km from Alberta to the BC coast. The $5.5 billion project, backed largely with Chinese money, is already behind schedule. And with the US shunning Keystone for the time being and the threat of global depression weighing on everyone’s mind, construction of the Northern Gateway is a real possibility.
After all, Canada needs to branch out. The US is the most indebted country in history and is barely growing, which is an alarming fact when you consider that the majority of our exports are destined for US consumption. China, on the other hand, is still growing above 8%. The western economies are all but stalled; Asia, not so much. Of course, a lot of that nasty US debt is now held by a nervous Chinese empire and then there’s rumours flying around about China’s bubble economy . . .
The situation is difficult and the livelihood of our country, whether we like it or not, is at stake. Having rested on our laurels for the last decade on the commodities boom, we are largely saved by selling our huge (and lucky) supply of resources; we definitely don’t manufacture much anymore and innovation is constantly disappearing under a culture of red tape. If you had to choose to sell to China as quickly as possible or wait until after the US election to try again for Keystone what would you do? That’s the quadrillion-dollar question.
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Chris Devauld
ProspectingJournal.com