Is China turning its back altogether on Alberta’s oilsands?
With accusations of anti-Chinese rhetoric being hurled at Ottawa – implicating Washington in the process – Alberta Oil contributing editor Sebastian Gault takes a read on whether the Sino-Canadian hydrocarbon honeymoon is over
Already rattled by spiraling production and labour costs, the industry now also has to read the tea leaves on CNPC’s recent decision to ‘withdraw’ its forces from Canada. Is this a deathblow to the $4 billion Gateway pipeline project to the Pacific coast that PetroChina had been pushing for?
Commenting on the decisive role oil played in the outcome of World War I, Henry Berenger of the Comité Generale du Pétrole of France quipped “the blood of the earth” had proved to be “the blood of victory” – and not simply for fueling the building of economic and military power but because the logistics of securing its supply and managing its production itself continues to be reminiscent of wartime organization.
Hence the deep reverberations felt with the almost off-hand declaration this summer by a CNPC official speaking at a conference in Edmonton that China’s rapid economic growth – and the need to absorb the politically restive rural population in the wake of history’s most massive wave of industrialization – would now not include development of a major Canadian source of supply as part of its long-term strategy.
The move is a significant one: with China’s three main national oil companies hell-bent on boosting crude supply above the 6.5 million b/d mark – a goal unattainable without aggressively raising imports – the open-door policy to bring in Western investment initiated in the late 1970s by Deng Xiaoping raises new questions about the strategy of the communist party in dispatching its erstwhile mollycoddled state companies to hunt the globe for desperately needed raw materials, particularly oil.
The art of (oil) warfare
CNPC set up a beachhead E&P office in Calgary in 1992, initiating a campaign to acquire oil assets in Western Canada. Interpreting it tactics since then, one can find a source of clues in the Chinese military classic Sun Tzu’s Art of War. Like Machiavelli’s The Prince, the Art of War focuses solely on expediencies – moral concerns are pointedly excluded – and the objective of the book is to identify ways to win advantage over one’s adversary (or business partner). And the Sun Tzu prime directive that a commander should aspire to achieve his objectives without conflict really means the brain ultimately prevails over brawn, which in the context of resources means avoiding force to seize oil in favour of nonviolent “economic” ploys.