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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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Sun, 03/18/2012 - 08:08 | 2266844 overmedicatedun...
overmedicatedundersexed's picture

flak, never saw a btu from the ground that you didn't hate..a good mind is a terrible thing to waste. what % of the air is CO2 and what % is nitrogen and that evil polluter H2O? I am sure you know yet you cannot connect the dots as horror of horrors CO2 production from any source is a minimal impact on our planet..as you know but some how do not understand..warm global temps make for longer growing seasons and less famine as CO2 is used by plants to convert into sugars and O2. guess thats bad.

you also know about the cycle from warm periods to cold periods admitted to by even the most rabid PHD man made global warmers..guess the trite thing to say is who was burning all that oil and coal 100,000 +yrs ago?

this pipeline would have increased jobs, in an US economy where jobs have fallen by historic numbers, and yet that is bad.

this pipeline would have increased refined products for world wide use, helping to keep energy prices lower and lowering need for ME production to some small extent bad again I guess.

a one eyed man in the land of the blind.

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