Tuesday, January 17, 2012

All About Oil: China, Enbridge, & Canada's 'National Interests'.

My piece in today's National Post:

Canada is at the brink of what is probably the most radical shift in energy and foreign policy since Pierre Trudeau and Mitchell Sharp engineered the ultimately doomed "Third Option" 40 years ago, which was all about reducing our economic reliance on the United States. This time around, everything is happening quite suddenly. There has there been no debate of any consequence at all - not in the House of Commons, not in the Senate, not in the proceedings of a Royal Commission. Certainly not in the news media.

Just as the underpinnings of the old order are collapsing, certain Conservatives are summoning the faithful to the far more urgent matter of blanketing the newspapers with purported evidences of a Masonic strategem devised by socialist Hollywood billionaires to activate sleeper cells of Ducks Unlimited agents for the purpose of sapping Canada's will to live as sovereign nation.

Here's what you've been missing.

Ostensibly, it's about the Enbridge project, a plan to pump condensate eastward from the coast to Alberta so that Alberta bitumen can be made fluid enough to be pumped back to the coast at Kitimat, to be put into oil tankers to be sent down Douglas Channel and out into the roaring North Pacific through a tangle of islands you will find on the charts strewn with names like Terror Point and Calamity Bay and Grief Point. A digression: It is not for nothing that such comforting placenames show up along the proposed tanker route, so don't start with me about how I should now find comfort in knowing that the oil spill cleanup contingency plans consist of rushing out with skimmers and booms that work only in low breezes and a light chop. I've fished halibut in those waters, and believe me, there is a reason why heading out there in boats is known as Walking With The King. Nevermind what the "radical environmentalists" say, whoever they are.

As recently as last fall, John Bruk, the founding president of the Asia Pacific Foundation of Canada and as fervent a booster of trade with China as you'll meet in a day's wandering around up and down Howe Street in Vancouver, was cheering Stephen Harper and wishing him all the best with his trade engagements in the Forbidden City. But Bruk's good wishes came with a caution: "Are we going to sell the ownership of our natural resources to pay for consumer goods we can ill afford and thereby speed up the indebtedness of Canada as export revenue from those resources would be lost?" Turns out that's exactly what we're doing.

It's not just about the jettisoning of a national consensus that Canada's bitumen should not be sent overseas to be processed. It's not just the $20 billion deluge of takeovers and beachheads Beijing has established almost overnight in Alberta's oilsands. It's about Chinese state-owned corporations moving in. It's about a proper review of Investment Canada Act rules the Conservatives were promising only a year ago, and then quietly scrapped the promise without explanation. It's about recommendations from the federal Competition Policy Review Panel that were ignored. It's about the abdication of Canada's capacity to articulate a national energy strategy, and all to the advantage of the police state in Beijing.

As I noticed (I was hardly alone in this) in my column in last Thursday's Ottawa Citizen: Until now, Beijing's strategy has been to fly under the radar by taking only pieces of oilsands ventures and to murmur occasionally about bringing in Chinese workers or pulling up stakes altogether should they hear too much backchat.

Now, everything's changed. But the very week that the MacKay River deal went down and Petro-China got it all with a final installment of $1.9 billion, Canadians were being called to arms over a disclosure that Alberta's eminently reputable Pembina Institute had taken $60,000 in the king's shilling. Turns out it was merely for some sort of think-paper in which Pembina explained to the British government things it should already know about renewable energy. Meanwhile, when it's up and running in 2014, MacKay will be a full-court Beijing show.

The headline the Vancouver Sun published on a Pembina-smearing opinion essay written by Kathryn Marshall, who I am sure is merely by complete coincidence the wife of Conservative war-room denizen Hamish Marshall, Prime Minister Harper's former strategic planning manager, was: "Why is foreign money fuelling oilsands fight?" Why indeed. We'll come back to that in a moment.

Sure, Rex Murphy is quite right, as far as it goes. All along, Canada should have been fighting back against the slander campaigns waged by so-called environmental activists who have gotten away with destroying the livelihoods of Canadian sealers and fur trappers. And you could say Prime Minister Harper has a point that there is much to be annoyed about in all those rich Americans who would want Canada to be their own giant, private national park. That could be a conversation worth having. But the great Enviroperil Scare of 2012 is a pathetic distraction. Everybody knows it. The headline writers know it. The radio talk-show hosts know it.

The Canadian versions of the Tea Party and Moveon.org should be allowed to get their jollies however they choose, and televised freak shows pitting self-appointed oil industry propagandists against self-appointed radical environmentalists might well boost the ratings in the time slots where the evening news used to be. But grownups will want to notice something else.

Over the past decade, Canadians have sunk more than $20 billion of mostly public money into port, rail and highway infrastructure on the west coast, all to expand Canadian trade into Asian economies. The whole point was to diversify our markets and reduce our reliance on the United States, and fair play to that, too: Stephen Harper didn't exactly invent the idea last month. But none of it has worked out like we were told. We've been hooped.

Ten years and $20 billion later, it's all China, all the time. China plays by its own trade rules, everybody's been letting China get away with it, and the result is that in ten years the annual value of Canadian exports to Japan hasn’t budged, and last year, as a destination for Canadian exports, India, the largest country on earth, was overtaken by – wait for it – Norway. As a Canadian trading partner, Taiwan is now down there with Algeria.

Canada's collective $20 billion Pacfic "gateway" investments have ended up transforming Canada's west coast transportation infrastructure into the portal that has enabled Beijing to flood North American markets with goods manufactured in sweatshops where they'll chuck you in prison if you even wonder aloud what it might be like to belong to an independent labour union. As for free elections or political parties, don't you dare even think about it.

This is what has become of Vancouver's boast to being
58 hours closer than Los Angeles to the big Chinese ports, and to being uniquely linked to three transcontinental railways that run straight into the United States' former industrial heartland. And now Canadians are being expected to provide Beijing with a steady supply of bitumen in a closed loop from Beijing's own oilsands properties in Alberta, through Beijing's own pipeline to oil tankers to its own refineries back in China, so that the black comedy of "world trade" can keep unfolding the way Beijing wants. Not only that, we're all supposed to be bloody grateful for it.

If you think Albertans need to have the Riot Act read to them whenever someone says "National Energy Program" out loud you should hear the way British Columbians talk about raw log exports. Usually about a tenth of the cut gets shipped out of the province unprocessed, taking jobs with it, and that's rage-making enough. Well, wake up: last year, nearly half of all the trees felled on the B.C. coast were shipped out raw. Over the past five years, raw log exports to China have gone through the roof, exploding 12-fold from 94,000 cubic metres to about 1.2 million cubic metres.

For you townies in Ontario, you'll want to get your head around a convoy of fully loaded lucking trucks bumper to bumper between Toronto and Ottawa. Now imagine all those whole logs getting stuffed into containers, trucked down to Prince Rupert every year, then loaded onto ships and sent off to China. And every year, the convoy grows longer. Now you know why more than 70 B.C. wood mills have been shuttered, and it will help to know that Beijing won't even allow us to turn those logs into woodchips. Meanwhile, you're being asked to boycott bananas, because Chiquita has said unflattering things about the oilsands.

The next time some Conservative MP tells you that we should all get down on our hands and knees and thank Enbridge for the $100 million behind its pitch to the National Energy Board for the chance to pour all that Alberta bitumen into China-bound oil-tankers, here's a question you might ask: Just who's paying Enbridge, exactly? Put another way, in the manner of that Vancouver Sun headline that I promised to come back to: "Why is foreign money fueling oilsands fight?"

Six years have passed since Enbridge first announced it had obtained $100 million to fund its planning and lobbying and its studies and surveys for a twinned pipeline through the Rocky Mountains and across British Columbia to saltwater at Kitimat. First it was all Petro-China's money, then we were told Petro-China got spooked, and then it was somebody else's money, but we're not allowed to know whose money it is. Do the Conservatives even know whose money is behind the Enbridge plan? If they don't know, why not? If they do know, why aren't they telling us?

Stop and think about it for a second. After all these years, and after all the recent uproars about sinister American environmentalists, it took filings with the National Energy Board that were turned up only last week to reveal that Beijing's very own Sinopec is accompanied by Suncor, Cenovus, Nexen and MEG among the Enbridge project's big-money backers. That still leaves at least $40 million in boost-and-plan cash that's coming from somewhere, and which is rather a lot more loot than the annual budget of the Skeena Valley Birdwatchers Society, I'm prepared to wager.

Which brings us to another couple of questions for Enbridge-boosting conspiracy mongers: Do you have any idea how stupid you sound? And just how stupid do you think we are? And by the way, do you think you're really doing any favours to Enbridge, which is itself a corporation as reputable, so far, as Pembina, by treating us all like idiots?

But before we even start asking impudent questions about who came up with Enbridge's final $40 million, a closer look at the $60 million stake we already know about reveals not only Sinopec as a Chinese government outfit that's paying Enbridge's bills. MEG is already partly owned by the Chinese National Offshore Oil Corporation. CNOOC also owns a third of Nexen's Long Lake oilsands project, and only a six weeks ago CNOOC and Nexen formed a joint venture on several deepwater exploration wells in the Gulf of Mexico. The Enbridge-backer Suncor is already also a part-owner, with Sinopec and Nexen, of the huge oilsands Syncrude conglomerate.

Last month, long before the roar of British Columbian's mocking laughter began to cause eardrum damage among certain spin-addicted federal Conservatives, my column in the Ottawa Citizen pointed out something very odd about the Prime Minister's recent slavishness in his posture towards Beijing. I took pains to notice it's not just Stephen Harper, and neither has the fashion for kowtowing afflicted only Conservatives: It’s gotten to the point that not a single politician in Ottawa will muster the impudence to wonder aloud whether, just maybe, this charade has gone on long enough.

Right after Prime Minister Harper declared in his ritual year-end interview,“I am very serious about selling our oil off this continent, selling our energy products off to China,” Beijing's Petro-China spent $1.9 billion on a complete takeover of the MacKay River oilsands project. And right after that, Natural Resources Minister John Oliver allowed himself to be cajoled into making certain intemperate remarks about radical foreign "billionaire socialists," by which he did not mean the unelected billionaires who run the Chinese People's Congress in Beijing, but rather American matinee idols who enjoy heli-skiing vacations in the Kootenay Mountains.

"The servility of Canada's political leaders (municipal, provincial and federal) to the obvious manipulations of Chinese strategists who flaunt world trade and financial market principles and jail democracy-promoting authors for 10-year terms is a national disgrace." I'll say. It wasn't some dweebish umbrage-taker from the Kitsilano Civil Liberties Union who wrote those words. It was Tony Campbell, the former head of the Intelligence Assessment Secretariat for the Privy Council Office.

Remember the Richard Fadden controversy? Seems like only yesterday that everybody was screaming at the head of the Canadian Security Intelligence Service, demanding that he shut up. Fadden almost lost his job. Why? "Among other revelations," Fadden reported that cabinet ministers in two provinces were under the control of a certain foreign government that Fadden thought it too indelicate to name, but he did go on to say that Chinese diplomatic missions are funding and organizing political activism in Canada.

And I haven't even got my boots on yet.


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