Thursday, December 23, 2004

Iron Denominator News

China Emerging as US Rival for Canada's Oil
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Basically the article notes that China is investing heavily in the tar sands, and that Canadian companies are likely to profit from a coming bidding war between US and Chinese oil concerns. Two things worth mentioning: First, any serious shortfall in US exports could conceivably be appealed through NAFTA, which guarantees the US a certain percentage of Canadian energy - though it may only protect the US from state action, not markets. Does anyone know the specifics of NAFTA? Secondly, one of the few sectors of the Chinese economy that is still completely dominated by state-owned enterprises is oil. So when we say Chinese oil companies are snapping up Albertan oil properties, what we mean is that the Chinese Communist Party is buying up strategic Canadian resources. I don't mean to be alarmist, but this is the reality of the current situation, and it's worth keeping in mind.

Canada, as much as any other place on Earth, is likely to be a battleground of one sort or another in any future oil war. Not necessarily military, but certainly the oil-hungry world is watching us.

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