The Real Story

Did you catch Newt Gingrich’s salute to our great conservative PM, Saturday night?

Crazy Newt Gingrich, following a line that worked well for him  all week in South Carolina, placed a major shout out to Harper in his victory speech, thanking Harper for supporting the Keystone pipeline.

But was he thanking Harper for supporting Canada’s interest?  Not a bit.  Newt made it clear that Harper was supporting US interests at the expense of Chinese interests.  The Keystone pipeline, Gingrich said, made sure that tar sands oil would end up in the US rather than in China.

But that’s not the real oil news in Gingrich’s speech.  Here’s what he said Keystone means to the US:

“We’d make money on the pipeline,” Newt said,  his voice launching into demogogeury cadence, “we’d make money on managing the pipeline, we’d make money on refining the oil, and we’d make money on the ports of Houston and Galveston shipping the oil.”

That’s lots of money for the US to handle our oil.  We’d only make money on getting the bitumen out of the sands.  That’s about it.  Americans get to manage, refine and ship.

Hewers of wood, drawers of tar sands.  That’s about all we’re good for.  And Harper serves their interests in maintaining that relationship.  Not ours.

Troubled and underrated for much of her life, but still fabulous all the time, Etta James died yesterday.

Last Friday Alex Tsakumis told us Mike MacDonald would soon be out as Christy Clark’s chief of staff.  Today the Sun reports that MacDonald has been shoved aside.  I thought “better late than never” wasn’t a very good news strategy.  Especially when the Sun more often than not specializes in “never”.

April 2010: China's Sinopec purchased a 9% interest in Syncrude's tar sands operatioin

China’s on an oil buying binge.  And Canada is where China likes to shop.

Since 2002 China, through four state owned oil companies, has spent over $65 billion dollars to purchase oil and gas fields and production facilities around the world.

Almost 15% of China’s expenditures went towards securing oil from Canada’s tar sands, according to a joint 2011 report of the International Energy Agency and the OECD.  China now owns significant stakes in Northern Lights Oil Sands, MEG Energy, Athabasca Oil Sands, Penn West Energy and Syncrude.

China’s buying spree isn’t an accident.  It’s a government policy that’s developed haphazardly since the late 1980’s.  China is determined to ensure that it continue to grow an economy that is increasingly dependent on energy from oil and gas.

In 2009, China imported 53% of its oil.  By 2035 that’s expected to grow to 82% or 12.8 million barrels each and every day.  China’s foreign policy is, in part, determined by the need to resource that growth.

That means moral issues like human rights take back seat to oil security.  “No matter if it’s rogue’s oil or a friend’s oil, we don’t care,” an energy adviser told the Washington Post in 2005 on the condition he not be identified, citing the threat of government disciplinary action. “Human rights? We don’t care. We care about oil.”

Ditto for the environment.  China’s interest in oil security overrides all other concerns.

As China’s resource needs grow, so do its concerns over the security of its oil supplies.  The government policy to buy up foreign producers blossomed in the 1990’s (the Go Outside policy) but the mad rush really took off after the Iraq war secured Iraq’s vast resources for US interests.

Before the war, China was playing footsie with Saddam Hussein and even signed a deal that would give it rights to a significant new play in northern Iraq.  The deal died with Saddam.

After Iraq, China redoubled its efforts to secure future oil resources.  As Shen Dingli, an expert at Fudan University who advises the Chinese government on energy security, put it in the Washington Post article “If the world oil stocks were exceeded by growth, who would provide energy to China?  America would protect its own energy supply. The U.S. is China’s major competitor.”

But owning foreign oil fields can’t provide all the oil security China requires.  There’s still the matter of getting the oil it owns to China.  It doesn’t matter much if you own the oil but can’t ship it home.

That’s where Enbridge’s pipeline comes in.

China may be increasing its control over Canada’s tar sands, but it still may not be able to secure access to the oil they produce if it can’t control the supply route.

It’s no accident that China’s four major government owned oil companies are investing in the development of Enbridge’s Northern Gateway Pipeline.  It’s an old story:  first buy the oil then buy the pipeline.  Its happened in Russia, in Myanmar, in Kurdistan.

So it’s no surprise that the Chinese investment in Northern Gateway comes with a price related to China’s oil security.

In return for China’s investment Enbridge will provide the Chinese companies with a secure spot on the pipeline for their oil as well as options to purchase an ownership share in the pipeline if and when it’s built.

Enbridge’s PR machine – including the PM’s office and Tory spin shops like ‘EthicalOil’ – are attacking Northern Gateway critics for catering to foreign – read American – green energy interests.

But the real issue here is why is Canada catering to China’s foreign policy interests?

That’s a debate that both Enbridge and the PM’s office would rather not have.  It goes something like this:  Is it in Canada’s interests to ship unrefined bitumen to China to secure China’s energy needs and manufacturing based economy?  Is there a better use – with our proximity to the US market – for Canada’s energy advantage than supplying China with the raw material for its own growth?

That debate should fundamentally be about Canada’s future, our economy and our citizens, not China’s.  Then, and only then should we turn our attention to the Gateway project.

A year ago Enbridge CEO Pat Daniel announced a new foreign partner for its Northern Gateway Pipeline project.

Daniels told a meeting in Whistler, BC that Sinopec, China’s second largest oil company, was investing an undisclosed amount in the pipeline approval process in return for a guaranteed place on the pipeline and the right to pony up for an equity stake in the $5+ billion project.

Enbridge’s Northern Pipeline project is a dual pipeline designed to deliver tar sands oil to tanker ports in Northern BC for delivery by tanker to refineries in China and other points east.  The pipeline approval process starts next month in Kitimat and is estimated to take up to 18 months.

Fast forward a year.  An oil industry front group headquartered in the office of Alberta tar sands legal specialists McLennan Ross announces it will be launching an advertising campaign attacking Northern Gateway critics.   The front group refuses to disclose its funding source for the ad campaign.

The group, Ethical Oil, was set up by refugees from the Tory war room, Sun News and Prime Minister Harper’s office.  It’s ad campaign claims that opponents are serving the energy interests of foreign powers and companies with ethically challenged records.

But here’s a question.

If Ethical Oil’s concern is about supporting oil companies linked to hideous and unethical practices like the oppression of women, terrorism and human rights abuses why are they supporting a pipeline being developed in partnership with some of the most unethical companies in the world?

Sinopec is identified by human rights groups as one of the four worst companies operating in the Sudan.  Sinopec’s partnerships with the government provides fiscal support for the Sudanese government’s genocidal military operations.  The government depends upon oil revenues from Sinopec – which owns three key Sudanese oil companies – to support its military purchases and campaigns against the South.

Sinopec plays a similar role in Myanmar (formerly known as Burma), partnering with one of the most oppressive regimes in the world to develop both offshore and land based oil and gas reserves.  Revenues from these operations help pay for the government’s extraordinarily repressive internal security operations.

For this Sinopec in 2008 ‘earned’ the second worst rating for a company operating in emerging markets from RepRisk, a company that assesses reputational risk for commercial and investment bankers and asset managers.

Doesn’t Sinopec’s involvement alone in the Northern Gateway Pipeline make the pipeline just another project of unethical oil? You’d think so.   But there’s more.

Just this past week new funding partners have declared their investment in the Pipeline project.

MEG Energy is a Northern Gateway investor partly owned by CNOOC, another Chinese company with a poor human rights record in Burma.  According to Wikipedia in 2008 the US Treasury Department asserted that CNOOC was cooperating in a Burmese joint venture with a company run by a Burmese family “linked to heroin trafficking”.

According to the Globe and Mail Sinopec and MEG are joined by two more Chinese companies with appalling environmental and human rights records.  According to the Globe, “Market sources have said they believe China National Petroleum Corp. (CNPC) also holds an interest in Gateway.  Sinochem Group, another Chinese energy firm, is also believed to support Gateway.”

According to RepRisk CNPC in particular “has been heavily criticized for its exploration agreements in Myanmar and alleged support for human rights abuses in Sudan, as well as the proposed Pengzhou petrochemical plant and oil refinery in Sichuan province in China, and relations with its controversial subsidiary PetroChina”.  In 2008 RepRisk rated CNPC as the company with the 4^th worst reputation in the world.

Partnerships with Myanmar and Sudan… links to Burmese heroin traffickers… With this cast of characters partnering in the development of the Northern Gateway, you’d think Ethical Oil would be at the front of the line condemning the pipeline.

That is if you think Ethical Oil’s real purpose is to oppose unethical oil.

If, on the other hand, its real purpose is to front for Enbridge with scurrilous attacks on pipeline opponents….  Well then its actions to date make sense.

Last night I dreamt a variation on my standard bad dream.  Instead of the never-ending non-specific chase that will, but doesn’t end in my death thereby keeping me terrorized through the night, I dreamt a very specific assailant – my cancer.

Stuck on an island somewhere near the Antarctic (I kid you not) I had to find a way off and get to a hospital to eliminate the tumour pursuing me.  Of course, every way I turned I was blocked.  It became increasingly obvious that I was going to die in this dream.

You are not supposed to die in your dreams.  So this was not a very good dream.  It’s not even a very creative dream metaphor and I do count on the unconscious to be, at the very least, creative.

Why now?  After all the cancer’s been chasing me for ten years.

It’s not hard to figure this out.  Just before the holidays I asked one of my many docs about a cyst that appeared about 6 months ago right above my eye.  He poked about a bit and said “That’s not a cyst.  It’s a skin cancer.”

Jesus.  I have had my fill of cancer and the last thing I needed to hear was this ugly pimple was actually a tumour.  Now what?

Long story short the ‘now what’ is simple.  It’s likely not serious, being slow growing and pretty common.  And a dermatologist is removing it next week.

Besides, I still have the real worrisome tumours on my spine and brain stem to deal with.  The skin lesion is and will always be a side issue.

But don’t tell my unconscious that.  It’s clearly freaking out and no ‘matter of fact’ doctoring is going to stop that.

Finding this silly little tumour has affected me other ways besides giving me very specific bad dreams.  In general, I am over-reacting.  In particular, I’m not writing.

I am in a very ‘what’s the point’ state of mind.  I know, I know, that’s wallowing and if there’s one thing I tell myself, it’s that I musn’t wallow.

There is good material.  God, there is good material.

For example the Sun has apparently merged with Encana’s communications department and is now almost desperately spinning the Northern Pipeline on their behalf.

There’s that BC Liberal ad campaign.  Creatively, Christy Crunch it ain’t.  And in keeping with Christy Clark’s general MO it’s not so accurate to boot.

On the NDP leadership front Brian Topp has gone negative, belying his spin about bringing the NDP together.

And more than ever we need the Federal NDP to pull together.  Otherwise Harper has free reign for the next decade and Canada will look like a cold version of Karl Rove’s dream state.

And then there’s the US election.

I’m down south right now and watched the Iowa caucuses last night.  The thought that one of these people could be president with a matching congress and senate makes my skin crawl.  Of the three way tie in Iowa all I can think is that Ron Paul knowingly recruits real – not metaphorical – Nazis, Rick Santorum eagerly looks forward to restoring the Salem witch hunts and Mitt Romney make the Trilateral Commission look benign.

Is this what the apocalypse is supposed to look like?  Perhaps.

Time to get writing again.