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China buying up North American oil

Editor’s Note: The following report is excerpted from Joseph Farah’s G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.


Canadian tar sands

The Chinese – and soon Middle East interests – are preparing to buy up oil resources in North America even as “green” interests threaten to short-circuit U.S. access to the same energy, according to a report from Joseph Farah’s G2 Bulletin.

While the U.S. State Department has issued a permit for a multibillion-dollar pipeline to carry crude oil from Canada’s tar sands to U.S. refineries, environmental groups are threatening to impede its construction. Some are trying to delay the project for years by putting it in the middle of the court system.

Meanwhile, the Chinese are in the process of spending billions of dollars to develop the resource and possibly deny the U.S. a secure strategic source of oil.

Environmentalists are upset over the approval of the pipeline, saying the Obama administration has reneged on its commitment to reduce pollution emissions by endorsing what the “green” interests described as the “environmental catastrophe” of tar sands.

 

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The proposed 1,000-mile crude oil pipeline would run between Hardisty, Alberta, Canada, and Superior, Wis.

While the environmental battle rages in the U.S., the Chinese, and soon the United Arab Emirates, will be spending billions of dollars to lay claim to the Canadian tar sands themselves.

The Chinese are investing in lands that contain the valuable resource, thereby controlling access to it.

The resource is in Canada’s Alberta province. In the United States, similar tar sands are concentrated primarily in eastern Utah, mostly on public lands. Tar sands in Utah are estimated to hold from 12 to 19 billion barrels.

But due to political concerns at the federal, state and local levels in the U.S., opponents have worked to prevent tapping into the oil from tar sands, citing low-carbon emission requirements. According to energy experts, however, there is no difference in oil once it goes through the refining process.

The Chinese, who are scouring the world for available oil to meet the demands of their burgeoning population, have made an initial $2 billion investment in a 5-billion barrel reserve of what the U.S. refers to as “dirty oil.”

However, energy experts are uncomfortable with the idea that a secure energy resource for the U.S. may be allowed to go to Chinese and Middle East ownership.

PetroChina will make the initial down payment for the tar sands at the MacKay River and Dover tar sands projects owned by Canada’s Calgary-based Athabasca Oil Sands Corp. The project is expected to cost around $20 billion. Considered the world’s most valuable oil company, PetroChina will also provide some financing for Athabasca which controls some 1.3 million acres of tar sands.

Given the investment to build the capability to extract the oil from the tar sands, energy experts believe that oil extraction efforts will only remain viable if crude oil prices remain above $80 a barrel.

To date, much of China’s investment in oil has been in conventional oil reserves, with only small investments in oil sands.

Similar to China, the government of the United Arab Emirates has shown interest in the tar sands as an investment, even though it has almost 10 percent of the known global oil reserves.

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