Sun, Feb 05, 2012 - Page 4 News List

Canadian PM to visit China this week

LEVERAGE:Following the US’ rejection of the Keystone XL pipeline, an energy expert said the ‘profoundly disappointed’ Harper’s visit to China was a warning to the US

AP, TORONTO

Canadian Prime Minister Stephen Harper heads to China this week, where he will discuss Canada’s vast oil reserves in a visit that is being viewed as an “open warning” to the US, which rejected a pipeline from Canada to Texas.

Harper will be in Beijing and two other cities for bilateral meetings with top Chinese officials, including President Hu Jintao ( ) and Premier Wen Jiabao (溫家寶) from Wednesday to Saturday.

The prime minister’s spokesman Andrew MacDougall said on Friday that it was “absolutely in Canada’s interests” to move the country’s resources to China.

Five Cabinet ministers, including the ministers of natural resources, trade and foreign affairs, will make the trip with Harper.

Harper is determined to build a pipeline to Canada’s Pacific Coast after US President Barack Obama rejected the Keystone XL pipeline that would have taken oil from Alberta to the Texas Gulf Coast.

Ninety-seven percent of Canadian oil exports now go to the US and Harper is eager to diversify.

Canada has the world’s third-largest oil reserves after Saudi Arabia and Venezuela: more than 170 billion barrels. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million by 2025, which the oil industry sees as a pressing reason to build the pipelines.

Canada is increasingly looking to China, thinking the US does not want a big-stake share in what environmentalists call “dirty oil,” which they say increases greenhouse gas emissions.

Harper told Obama he was “profoundly disappointed” that he rejected the Keystone XL pipeline. The pipeline has become a hot topic in the US presidential election. Republican presidential candidates Newt Gingrich and Mitt Romney have both promised to approve the pipeline.

After Obama first delayed a decision on the Keystone pipeline in November, Harper told the Chinese president at the Pacific Rim summit in Hawaii that Canada would like to sell more oil to China, and the Canadian prime minister filled in Obama on what he said.

Wenran Jiang (姜聞然), an energy expert and professor at the University of Alberta, said Canada is using China as leverage.

He said Harper’s visit is an explicit warning to the US

“It’s a not a subtle warning. It’s an open warning,” Jiang said. “Harper has said Keystone was a wake-up call.”

Jiang said Washington will be paying attention to the trip, but he said a number of factors make US officials less worried than a few years ago when China’s investment intentions in Canada’s oil sector weren’t as clear as they are now.

Jiang said US officials no longer fear that the Chinese are investing in Canada to lock up the supply and ship it back to China. However, Jiang said that does not prevent Republicans like Gingrich and Romney from raising fears that the US is losing energy security.

David Goldwyn, a former energy official in the Obama administration, has said he sees no threat from Chinese inroads into Canada because there is more than enough oil for all concerned.

China’s growing economy is hungry for Canadian oil. Chinese state-owned companies have invested more than US$16 billion in Canadian energy in the past two years. State-controlled China Petroleum & Chemical Corp (Sinopec) has a stake in Enbridge’s proposed Pacific pipeline, and if it is built, Chinese investment in Alberta oil sands is sure to boom.

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