Monday, January 30, 2012
Saturday, January 28, 2012
A Welcome Addition to The Conversation About China.
Brian Lee Crowley is no fool. He's the managing director of the Macdonald-Laurier Institute, the founding president of the Atlantic Institute for Market Studies, and a fine rum lad. A detractor might insinuate something to the effect that if there were a Canadian political party explicitly devoted to the proposition that taxes are carcinogenic and government is cholera, your man Brian would be a ranking member in the politburo of its central committee. But I'm not one of Brian's detractors, so I would never say anything like that.
In today's Ottawa Citizen, Brian enters a conversation I've been lately encouraging sensible Canadians to have about the implications of Prime Minister Harper's unexplained and sudden embrace of a corporate entity run by the Chinese Communist Party that serves as the guarantor of Omar al-Bashir's regime in Khartoum, the bottomless overdraft in Bashar al-Assad's bank account in Damascus, and the specific means by which Tehran's Khomeinists are evading the West's sanctions and double-daring us into a war.
The prime minister would like that entity, Sinopec, to add to its global services the means by which Canada might emancipate itself from its over-reliance on American oil markets, and the stratagem that will allow Mr. Harper himself to look rather more manly in those obligatory White House photo opportunities that put him next to the handsome and swaggering American president with the smirk on his face.
Meanwhile, none of the formerly freedom-loving rednecks who now rally to the prime minister's side in this affair have exhibited so much as a blush as they do so, when everybody knows full well what they'd have done had the New Democrats even hinted favourably in the direction of an arrangement anything like the one the prime minister has embraced. They'd be denouncing the NDP as al Qaida's fifth column in Canada and they'd be busy filling the op-ed pages of the dailies with stout demands that Harper invite a team of US Navy Seals to round up the NDP caucus en masse so they could be executed for high treason in front of city hall in Fort McMurray.
But Brian is not a redneck. He's smart. Unfortunately, in his contribution to this conversation, he's being too smart by half. "All across the political spectrum the cry is heard: process the oilsands here at home. Bank executives, trade unionists, editorialists and others want us to do all the work here." There is very little to disagree with about that, or indeed in anything that follows, until Brian gets around to his point, when he feints to the right.
"We could upgrade and refine some of our production facilities in the east (at the Irving refinery in Saint John, for example), but they are already well supplied by world oil markets, whereas getting large quantities of Alberta crude to them would be costly for little benefit."
For one thing, if Alberta crude really is of "little benefit" to anyone in Canada's mysterious east, then it would be nice if Brian could just come right out and say so. But I don't know anyone proposing to ship bitumen to Saint John anyway.
Shipping bitumen to Ontario for refining, or to Quebec, or upgrading and refining it in Alberta or along the way, would be very profitable if Canada acted like pretty well every other country in the world and encouraged enterprise that added value to its natural resources. This is exactly what Stephen Harper himself was advising, in the form of a promise, in the 2006 election and in the 2008 election and the last election. Heck, we could even invite Chinese capital to invest in infrastructure like that.
In the bargain, we would also emancipate eastern Canadians from the ill luck and unhip circumstance of having to rely upon - dare I say it? - "unethical oil" and "conflict oil" from Saudi Arabia, Venezuela and Nigeria. They'd have buckets of Alberta's fair-traded and shade-grown variety instead.
"Forcing investments of billions of dollars in unproductive capacity and delaying oilsands development won't improve Canada's standard of living, but the reverse," Brian claims.
That's rich. How well I recall the days when Canada's mere possession of a national energy program and the establishment of our own state-owned oil enterprise, Petro-Canada, was a free-market sin that cried out to heaven for vengeance. Now China is doing the nationalizing of our energy resources, and it's Chinese state-owned corporations intruding into our oilsands wealth. Sinopec revenues last year exceeded the tax revenues of Canada's federal government. We're supposed to behold the glories of the free market in this?
We don't even have a Foreign Investment Review Agency anymore. China's version of FIRA - preferential bank loans to dozens of outfits like Sinopec that are run by Chinese Communist Party politburo appointees; draconian restrictions on foreign investment to favour the government's own enterprises; privileges granted to state-owned corporations at the expense of thousands of Chinese businesses they've driven into bankruptcy in recent years; labour-law exemptions gifted to Beijing's monopolies and their foreign joint-venture buddies; grotesque tariffs and duties imposed on imports to the advantage of the multinational corporations Beijing owns and runs - all this makes us looks very much like the chumps we are.
I mean, please. Why do you think Stockwell Day is now a "distinguished fellow" with the Chinese business lobby known as the Asia Pacific Foundation of Canada? Canada's former Minister Responsible for the Asia-Pacific Gateway is not distinguished by a business degree from Harvard or an international relations degree from Georgetown. I don't mean to offend anyone's religious sensitivities here, but as I recall, he is a hayseed who thinks people were eating dinosaurs in the Garden of Eden 6,000 years ago.
As for "delaying" oilsands development, smart people in the oil industry and in the investment banking racket tell me that delaying the sale of the good stuff will only mean fetching a much better price down the road a little ways, but we're giving the easy stuff away to Beijing for pennies, and soon all we'll have left is the nastier stuff that costs almost as much as it's worth just to get it out of the ground. As for the bit about how acting like grownups "won't improve Canada's standard of living," are we supposed to overlook the fact that the number of landed immigrants settling in Alberta has now been eclipsed by the number of "temporary foreign workers" in that province?
I could go on.
Thursday, January 26, 2012
It's Not Funny Anymore.
Just how Sinopec became co-author of Prime Minister Stephen Harper's new foreign policy and energy strategy isn't a question any of us are supposed to be asking. There are other questions I intend to keep chasing in the coming days, but here's a taste of my Ottawa Citizen column today.
It was Sinopec that spent $2 billion on an outright purchase of the Alberta oil and gas firm Daylight Energy late last year. A direct Beijing foothold - this was a first for Canada's oilfields. But it was an earlier $2-billion Sinopec takeover of Vancouver's Tanganyika Oil that won Beijing its first big piece of Syria's Oudeh oilfields, and that's how Sinopec provides the sanctions-busting revenues that allow the delusional mass murderer Bashar al-Assad to hang on in Damascus.
It's the same game Sinopec has been playing in Sudan, keeping the genocidaire Omar al-Bashir in Khartoum instead of in the prisoner's dock at the International Criminal Court in the Hague. But here's where it gets really ugly. China is now Iran's number one trading partner. Sinopec is now Iran's main buyer of crude oil. Tehran has managed to avoid the bite of Euro-American sanctions aimed at curbing the ayatollahs' nuclear ambitions. Sinopec is the reason why the sanctions are failing. If sanctions fail, it will almost certainly mean war.
In the summer of 2010, Richard Fadden, the head of the Canadian Security Intelligence Service, got in big trouble for saying that politicians in at least two provinces were under "foreign influence" and China was funding political activism in Canada. Fadden followed up with a detailed memorandum to his boss, Public Safety Minister Vic Toews. He named names. Toews knows who the politicians are that Fadden was talking about. Prime Minister Harper must surely know.
Saturday, January 21, 2012
I spoke with Hussein while I was assembling my report on the several front lines of the Arab revolutions a year after Tahrir Square, in today's Ottawa Citizen.
When we talked, the the runoff-vote tallies were still being finalized after the first-ever Egyptian parliamentary elections, but it was already clear that the old Islamist order of the Muslim Brotherhood and its more radical allies in the Salafist movement had won a clear parliamentary majority.
“The elections happened in the context of extreme violence and oppression. The record over the past year is just as bad as it was under Hosni Mubarak. The military ruling class still has the guns, and they don’t shy away from beating women in the streets in front of cameras,” Hussein explained. “But these elections weren’t rigged. We can’t do anything but respect the results.”
On a related subject, just as soon as I get a moment I'm going to be updating this page with a response of a sort to some very kind reviews and helpful critiques of my new book, Come From the Shadows: The Long and Lonely Struggle for Peace in Afghanistan. Some welcome news: The Canadian International Council picked Come From the Shadows as one of the best international books of the year.
I was very humbled by Sohrab Ahmari's beautifully written and generous review in World Affairs Journal, titled "The People Do Not Want To Go Back" (a portion on the free side of a paywall can be found here). I was also heartened by Peter Ryley's review (which is also a very fine essay in its own right), not least because Peter is a writer and a thinker I greatly admire and he has not forgotten what means to be of The Left. Also weighing in with a very generous review is Paula Newberg, director of the Institute for the Study of Diplomacy at Georgetown University and a former special adviser to the United Nations in Afghanistan, in the Globe and Mail. And I should thank retired colonel Mike Capstick for the thoughtul consideration he's given the book in this month's Literary Review of Canada.
Wednesday, January 18, 2012
A Matter Of Misinterpretation.
I believe Terry Glavin misinterpreted my comments in his column on Chinese investment in the oilsands. I called for urgent political leadership not on what he characterizes as "China's deepening influence in the Canadian economy" but on "a Canadian response to the shift in global power towards Asia."
I think Glavin's assault on foreign investment in Canada is as flawed as the vilification of overseas funding for environmental causes that he has taken issue with. Major infrastructure projects such as the Northern Gateway should be assessed in the national interest, and foreign involvement (in all of its forms) should not be considered as a priori negative.
- Yuen Pau Woo, Vancouver, B.C.
Yuen Pau Woo is the president of the Asia Pacific Foundation of Canada. I could have described him as the head of the now-entrenched faction in the foundation that supports Chinese state-owned corporations taking over Canada's natural-resource infrastructure, but I didn't, because I am both charming and gallant.
Mr. Woo objects to the way I characterized the "national debate" we both appear to agree Canada should be having, and fair play to him, but I would point out that I merely characterized the issue more accurately and without his boosterish inflection.
More to the point, Mr. Woo knows very well that it is untrue to assert that my column was "on Chinese investment in the oilsands." It was no such thing. It was a column on Chinese state-owned corporations' investments in the oilsands.
As for "Glavin's assault on foreign investment in Canada," this is more than mere misinterpretation, and Mr. Woo is well aware of that, too. Nowhere, not in that particular column or anywhere else, have I raised even the mildest objections to foreign investment in Canada. I don't object to foreign investment, and I most certainly did not subject foreign investment to an "assault," in that column or anywhere else.
Mr. Woo is engaging in a deliberate and cunning misrepresentation here. He is conflating mere foreign investment in Canada with the Beijing police state's growing ownership and control of Canada's energy sector infrastructure. This is the rhetorical feint that is precisely the means by which Beijing has been able to get away with it, by which anyone who has the cheek to notice is dismissed by misrepresentation approaching slander, and by which we are all made to shut up and behave ourselves.
We do appear to agree on a couple of important points, though: Canada's so-called northern gateway should be "assessed in the national interest," and "foreign involvement (in all of its forms) should not be considered as a priori negative."
It logically follows that Mr. Woo will now write stern letters to newspaper editors to assert that Prime Minister Stephen Harper and B.C. Premier Christy Clark are wrong to be raising mobs with pikes against shadowy "foreign" environmentalists. I await the appearance of these letters, eagerly.
Tuesday, January 17, 2012
All About Oil: China, Enbridge, & Canada's 'National Interests'.
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.
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.
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.
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.