Keystone Aftermath Arrives: Canada Pledges To Sell Oil To Asia, As US Becomes Source Of "Uncertainty"

Tyler Durden's picture

America's loss is China's gain. In the aftermath of the Keystone XL fiasco, which will see not only a number of jobs "uncreated" but a natural source of crude lost, Canada is already planning next steps. Which will benefit Shanghai directly and immediately. As Bloomberg reports, "Prime Minister Stephen Harper, in a telephone call yesterday, told Obama “Canada will continue to work to diversify its energy exports,” according to details provided by Harper’s office. Canadian Natural Resource Minister Joe Oliver said relying less on the U.S. would help strengthen the country’s “financial security.” The “decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market,” Oliver told reporters in Ottawa." Ironically, it is diversifying away from the US, with its ever soaring, politically-predicated uncertainty, that is a source of stability and diversification. But it is not only crude. Wonder why no jobs are being created? Wonder why despite record low mortgage rates there is no bottom in sight for housing? Simple - nobody can plan one month, let alone one year ahead for any US-based venture or business. The political risk is simply too great - whether it is contract law (see GM and Chrysler) or simple solvency (see record high levels of cash hoarded by companies), it is there, and as long as it is there, there will be no hiring, no capex spending, no growth, and no real improvement in the economy, the real economy, not that defined by where the Russell 2000 closes on any given day.

More from the Keystone XL aftermath:

Harper “expressed his profound disappointment with the news,” according to the statement, which added that Obama told Harper the rejection was not based on the project’s merit and that the company is free to re-apply.

 

Canada this month began hearings on a proposed pipeline by Enbridge Inc. to move crude from Alberta’s oil sands to British Columbia’s coast, where it could be shipped to Asian markets.

 

Environmentalists and Canadian opposition lawmakers welcomed the Obama administration’s decision. Megan Leslie, a lawmaker for the opposition New Democratic Party, said the Keystone pipeline project was harmful to Canada’s energy security.

 

“What I’m opposed to is continuing the unchecked expansion of the oil sands,” Leslie said by telephone.

 

Enbridge (ENB)’s pipeline may now become the new flashpoint between Harper and the opposition. Harper has said building the capacity to sell the country’s oil to Asian markets is in the national interest, and the government will review regulatory- approval rules for new energy projects so they can be done more quickly. Harper has also said he will look more closely into complaints that “foreign money” is being used to overload the regulatory process.

Then there are those who have pointed out that in recent years the equity risk premium has soared to multi-year highs. There is a reason for that. It is called: America.

Yesterday’s rejection “certainly introduces new uncertainties into the economic relationship,” said David Pumphrey, deputy director of the energy and national security program at the Center for Strategic and International Studies in Washington. “This is a cornerstone of economic development for the country.”

And as pertains to this story, it is a good thing that the American Strategic Petroleum Reserve is safe and untapped for every eventuality. Oh wait...

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BaBaBouy's picture

Way To Go, Mr. Bummah ...

 

AND China dances circles around you, while you continue the US bullshit politiking ...

 

AND keep telling the USa Sheeple that GOLD is Toxic, While Asians Accumulate daily, and build their personal wealth.

Oh regional Indian's picture

Well Oil is toxic.

Gold is just not we think it is.

ori

/shattering-midass-curse-gold-de-spell-ed/

CrashisOptimistic's picture

Every single aspect of this government corrupted economy is complete bullshit.

LOOK THE FUCK AROUND.  We have 10 year bond yields south of 2%.  SOUTH OF 2%!!!  This says there is no significant economic activity.  In the absence of vibrant economic activity, oil consumption falls.

The fucking price of oil is $100.  With falling consumption it is $100.

No, it's not some conspiracy of oil companies, morons.  Russia doesn't give a shit what Exxon wants; Russia is the largest producer in the world.  KSA doesn't work for or cooperate with Exxon, or Chevron, or Conoco or Occidental Petroleum.  Those Companies Don't Control Oil.  Russia and KSA do.  There's no conspiracy because they HATE Exxon and anything American.

Yet the price is $100.  Add new customers for Suncor's oil sands output and its price is going up.  That's 2 mbpd of US imports the price of which is going up.  That's about 1/6th of imported oil about to get a price jack.

Way to go Obama, you moron.

Corn1945's picture

State-owned oil companies control the overwhelming majority of the world's oil. Big Oil controls around 6%.

People who blame oil companies for the price are badly misinformed.

economics1996's picture

This will not affect the world oil price significantly, some more transportation cost to China, but it does mean our US dollars leave North America.  

Ruffcut's picture

For fuck's sake. Everyone in the oil business loves high prices. Companies, cuntries, drillers, shippers, processors. COmpanies get richer, consumers get poorer. ONly the station is miffed and left out of the loop, hoping to sell cola, slurpees and corndogs.

economics1996's picture

Every supplier wants higher prices, so what is your point?

Michael's picture

Obummer didn't want the Republicans to take credit for helping create 40,000 jobs the pipeline would have created.

That's the bottom line.

covsire's picture

reminds me of a jealous boyfriend about to murder his recent ex-girlfriend:  "IF I CAN'T HAVE YOU, NOBODY WILL!" - Psycho: STAB STAB STAB.  Is that what Obama's narcissism has reduced him to, a psycho in the White House?

Colonial Intent's picture

Thats why he's in the white house and you're sitting on your pasty fat ass in mums basement eating her food and hogging her bandwith.

There are those that act and those who watch.

There are those that lead and those who follow.

You are not an actor or a leader, you dont have the balls.

 

Colonial Intent's picture

If only you had referenced some data or info to prove your silly hyperbole, then people might have taken your comment seriously.

Better luck next time:-)

Ident 7777 economy's picture

Corn1945, I keep asking you, where did you swipe that Avatar?

The real owner want it back ...

.

Chief KnocAHoma's picture

So let me get this straight - 1st Huesein Obama flushes $500-million tax payer dollars into unproven solar technology. 2nd - Gas prices have tripled since he was sworn in. 3rd - Now he rejects a pipeline from Canada, not Iran, Canada.... then blames it on the Republicans.

I really can not believe the American people were dumb enough to elect this fraud.

Oh regional Indian's picture

There are no elections. only simulations of them.

There are no leaders, only pleaders.

There are no people, only Sleeple.

This is the Matrix.

ori

camaro68ss's picture

Obama is a fucking dick head, hes drowneding this country! NDAA cops kicks down my door in 3...2....1

economics1996's picture

Why will Obama get re-elected?

White 64.86% - Vote Democrat 46% of the time-Average IQ-100

Hispanic 15.1%-Vote Democrat 70% of the time-Average IQ 93

black 12.85%, - Vote Democrat 97% of the time-Average IQ 85

Asian 4.43%,-Vote Democrat 62% of the time-Average IQ 101

Amerindian and Alaska native 0.97%,

native Hawaiian and other Pacific islander 0.18%,

two or more races 1.61% (July 2007 estimate) 

Anyone wondering why we do not have national borders?  

Anyone wonder why we do not require a photo ID to vote?

Ghordius's picture

eh? I must be too foreign for this arcane detail...

you don't need a photo ID to vote? seriously? how do you do it then, like in Africa with the ink on your thumb?

Elwood P Suggins's picture

Hell in some places you don't even have to be alive to vote!

gmrpeabody's picture

Washington state governor thanks all the dead voters for the thinnest of victories.

economics1996's picture

No you just walk up, tell them your name, get a ballot, and vote.

Our elections are bull shit banana republic. 

http://usa-wethepeople.com/2012/01/ahh-dont-worry-you-can-vote-without-id-even-if-your-dead-in-nh/

Look for yourself.  Complete bull shit.


DosZap's picture

Ghordius

you don't need a photo ID to vote? seriously?

Hell no son, you do not even have to be a citizen, here even the DEAD vote.

(I am not KIDDING,on EITHER call).

economics1996's picture

I forgot, Yids 78% Democrat.

Sudden Debt's picture

There's a good reason why he's against the pipeline.
If he approves the tar sands import, oil will never go down because tar sand oil is expensive.
If he nukes Iran or Venezuela he'll bring the price down.... At least he hopes to... Somewhere in his third or fourth or fifth term... Or even sixth after changing a few more laws and instateing the monarchy of America.

BurningFuld's picture

Tar sands oil production is cheaper than you would think with the new technologies.  BP a couple of years ago said their Tar Sands operation was their most profitable site.  Think about the costs now in deep sea drilling. Think about the costs of paying off some third world dictator government.   Also think about this: The Norweigeans are now in the Tar Sands and they are claiming 80% extraction rates. 80% makes the Tar sands contain about 1.4 trillion barrels of oil. In case anyone does not know they cover an area the size of England!!!  Another fact: The tar Sands are currently producing THE SAME green house gases as the tiny state of Wisconsin.

"Electricity plants powered by coal in the U.S. generate almost 40 times more greenhouse-gas emissions than Canada's oil sands (the coal-fired electricity plants in the State of Wisconsin alone produce the equivalent of the entire GHG emissions of the oil sands."

buyingsterling's picture

1.4 trillion barrels of recoverable oil? But that's 90,000 days worth at current US consumption rates, or about 250 years. I'd say you're either off, or the peak oilers are missing something.

Flakmeister's picture

Just what are we missing?

There is ~1 Trillion known to exist and likely about 300 billion to be found...No arguement...

Do you think that there is a difference between the original wells in Ghawar's Super-K zones that could give 18,000 barrels per day from a vertical well at ~8000' and 6 miles of horizontal fracked wells giving 800 bpd falling to 250 bpd after a year?

Have you considered that the single largest developed reserve in the world, the Athabasca Tar Sands, will be all but impossible to get over 5 mm bpd (current production takes 25% of canadian gas production) or about the equivalent of Ghawar in its heyday...

It is about flow rates, not reserves....

 

dubbleoj's picture

Obama must have taught you how to spell as well!~~

Everybodys All American's picture

You would almost think he was trying to subvert the system on purpose.

CPL's picture

I wonder how long it will take before they invade Canada?

Q.E.easy's picture

Because that worked out so well for them the last time.

Didn't they have to build a shiny new whitehouse after?

 

BobPaulson's picture

The multiple US invasions of Canada were actually on British North America since Canada wasn't a country then. So really, it was the British who burned down the Whitehouse (that wasn't white before if I am not mistaken).

When they figured out how much easier it is just to coerce the officials of a country, I think the military invasion method stopped being the most efficient option. Perhaps they saw how easily the British influenced India and China in the 19th century and realized it was an excellent low cost model for hegemony.

Besides, attacking cold expanses of sparsely populated geography doesn't have a good track record for success, ask Hitler and Napoleon.

Q.E.easy's picture

At the time we had Upper Canada and Lower Canada, sure we were under British control but technically.... we still are.

Our wonderful Governor-General has veto power (that they will never use, but is there anyways) to vote down any law put forward. 

I'm sticking with Canadians burnt it down. More fun to picture a bunch of beer swilling farmers putting the torch to em, and since when has this world ever been tied to inconvienient things like 'facts'?

 

 

mudduck's picture

Yup. And I think our Canadian military still has those 1812 era flintlocks in service in some regiments, as well as the modern Lee-Enfield bolt action WW2 era 303s, flash-lights for night vision and garbage can lids for body armor. Combine that kind of firepower with the military genius of Valerie-Stephan Harper unt vee r invincible I tell yous.

smlbizman's picture

shouldn't take long ...south park has already shown how to proceed

James-Morrison's picture

I wonder how long before China sends troops to Canada to protect their oil from American intervention?

WWIII might start in our own backyard.  

Canadians are singing a new tune:

Obama-na, we thumb our nose at thee,

We'll, send our oil across the sea,

Obama-na, we thumb our nose at thee,

Obama-na, we thumb our nose at thee.

gmrpeabody's picture

I can easily see China's new aircraft carrier visiting the Port of Vancouver, ....eh?

economics1996's picture

Someday people will realize all government does is fuck people over.

Ruffcut's picture

"You would almost think he was trying to subvert the system on purpose"

Yep it does. When I rode with this lawyer in the morning and scratch the surface on this clusterfuck, he was as clueless as the congressman in nov. Lawyers are morons running the government and finance charmers run the corporate world. I think the payoff and continued ignorance predicts the future. Cloudy skies should be forecasted and prepared for.

Prepare for any emergency, as best you can and stock up on beer or drink some, prepare great meals and get back to zero hedge.

goodrich4bk's picture

Yeah, we'd still have $30 a barrel oil if only McCain was President...

Flakmeister's picture

Please tell me that you forgot the sarc flag..

BobPaulson's picture

I think that brown bag icon is really the unknown comic.

JOYFUL's picture

Why buy oil from Canada when you can simply liberate it from troublesome Middle Eastern countries that refuse to install the correct proportion of goldmansachs alumni?

No-brainer, really!

 

 

Kyle Reese's picture

You forgot his food cost inflating support for corn based fuel additive. He is not an idiot he is The Idiot.

Chief KnocAHoma's picture

And another thing... Obama does something as damaging as this, but all we here about all day long is who Newt stuck his dick in.

Newt needs to bail out now so the oxygen can be placed on the proper subject... which is... our current President is bad for America and must be defeated!

PulpCutter's picture

Ah, don't look now but Newt's ahead in the two latest polls from SC.  Maybe it's the job cremator who needs to drop out.

PulpCutter's picture

Ah, don't look now but Newt's ahead in the two latest polls from SC.  Maybe it's the job cremator who needs to drop out.