Home » News » Canada looks to China to exploit oil sands rejected by US
News
Canada looks to China to exploit oil sands rejected by US
News Articles | guardian.co.uk | Suzanne Goldenberg | February 14, 2010
Read the full article on the originating site
Canada, faced with growing political pressure over the extraction of oil from its highly polluting tar sands, has begun courting China and other Asian countries to exploit the resource.
The move comes as American firms are turning away from tar sands fuel because of its heavy carbon footprint and impact on the landscape.
Whole Foods, the high-end organic grocery chain, and Bed Bath & Beyond last week both signed on to a campaign by ForestEthics to stop US firms using Canadian tar sands oil. The Pentagon is also scaling down its use of tar sands oil to meet a 2007 law requiring the US government to source fuels with lower greenhouse gas emissions.Producing oil from the Alberta tar sands causes up to five times more greenhouse gas emissions than conventional crude oil, says Greenpeace.
In the most significant deal to date, the Canadian government recently approved a C$1.9bn (£1.5bn) investment giving the Chinese state-owned oil company, PetroChina, a majority share in two development projects. Prime minister Stephen Harper said: “Expect more Chinese investment in the resource and energy sectors … there will definitely be more.”
Canada is the biggest source of US oil imports, with 65% of tar sands production going to refineries in the midwest. “Companies have been hitting the pause button on projects,” said Simon Dyer, of the Pembina Institute oil sands watch project.
But not China. PetroChina has taken a 60% stake in two new tar sands projects dues to get under way in the MacKay River and Dover areas next year, with plans to produce up to 35,000 barrels a day by 2014, and eventually up to 500,000 a day.
China made its first investment in the tar sands in 2005, with state-owned China National Offshore Oil Corporation (CNOOC) spending C$150m for a 17% stake in a startup MEG Energy Corp. Another Chinese state-owned firm, Sinopec, last year increased its interest in the Northern Lights oil project to 50%. China’s National Petroleum Corp has also bought oil sands leases that it has not yet developed.
Japanese and South Korean companies have also begun moving in, opening up potential new markets for Canada at a time when forecasts show a fall in global demand for oil. India’s Reliance Industries is also reportedly bidding on Alberta tar sands projects.
* guardian.co.uk © Guardian News and Media Limited 2010Tagged with: demand, china, petrochina, japan, south korea
