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China diversifies oilsands
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1 n. u1 e! c4 j* B- h% Y+ I# v; ?Edmonton JournalSeptember 2, 2009 2:09 AM. C N7 g5 N/ Y3 i E
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In the middle of a recession, at a time when Alberta's vast oilsands resource is under pressure from lower oil prices, changing environmental policies and a deteriorating "tarsands" image, a new overseas investor has joined the list of international players with a$1.9-billion vote of confidence.# E, K9 C7 v& `
2 q+ L: r: v0 j) |& p5 @; R; {Does the fact that the new player is the state-owned PetroChina International Investment Co. Ltd.--and not, say, another European to join the likes of France's Total, or Norway's Statoil--take some of the shine off the good news? Of course not. Indeed, the possibility it opens up of a more diversified customer base, and of an alternate export route to the West Coast, makes cash-rich, oil-thirsty China an especially attractive new partner for Albertans.
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It's not as if the Chinese are threatening the dominant status of American and other longer-established interests, or acquiring leverage over Canadian or Albertan policy--and Albertans must remember that what really matters is the labour, environmental, corporate, export and royalty rules, and Canadian and Albertan authorities' effectiveness at enforcing them. Attempts by PetroChina or any other oilsands to bring in cheap foreign labour, for example, must be met with by fair, evenly-applied regulation to protect both the temporary workers themselves and their job-hungry Canadian counterparts.( h# q) g7 q" a; B
2 {& ~! L1 d4 a! tBut the reality is that when Athabasca Oil Sands Corp begins to develop its two projects (with first commercial production slated for 2014) under its new PetroChina majority control, it may well be that increasingly rigorous standards will be in place on labour as well as on environmental matters.
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Indeed, China, and Asia generally, is an enormous and rapidly growing market for energy, and China's recovering demand for oil has been a key factor in stabilizing prices. With Chinese consumption at 8.1 million barrels a day and rising at a yearly rate of 3.5 per cent according to a recent Scotiabank report, it's difficult to imagine PetroChina will be anything but a careful follower of whatever rules are set out for the industry.$ ?7 i) I9 F7 g8 U; Q
% ?# I" Z% O9 W0 x0 BSome observers may fear the Chinese will add to the foot-dragging on change to reduce the oilsands' contribution to global warming and other forms of pollution. But the Americans (and Canadians) will continue to call the shots on this subject, in practice, and will certainly not be held back by worry about China's views. If anything, Washington is undoubtedly uncomfortable about growing competition for North American Oil and would be happy to see the Chinese back out.2 S/ Q c6 g2 i' t) W, o" ^9 Q
0 S) |5 l5 A+ L* iWhich point brings us back to competition: It's a good thing, and PetroChina's investment will fuel it. If it brings us closer to having a new pipeline to deliver our oil to more markets, so much the better for our revenue stream, and our ability to exercise genuine sovereignty over our resources. |
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