Keystone vs China vs Canada

The Americans have put a hold on the KeystoneXL pipeline over environmental concerns which leaves companies in the Alberta Oil Sands with a choice as to where to sell their oil to.

One thing that Prime Minister Harper has indicated was to sell to China, which on the surface sounds like a good idea. The USA doesn’t want our oil, China does. Both have cash, here you go.

It is a bad idea though to sell the oil to the Chinese. China is a communist country and yes we do trade with them, millions of dollars worth a day. That trade mostly though is for finished products. That hair dryer at Walmart, the TV at Zellers, finished goods. They send product, we send cash, simple. If we start to send natural resources to China, we start becoming more dependent on them than we already are.

The argument has been made that they will become dependent on Canada as we have something they want. True, but if we decide to start selling to the Chinese, we won’t be able to stop, even if we want to. It is a corrupt, communist dictatorship, not much different than dealing with the Mafia. Once you’re in, you’ll never get out (pardon the Godfather pun).

Sending natural resources to an expanding and emerging China in 2012 is not that much different than the US and other western powers sending scrap metal, rubber and oil to Japan during their military buildup in the 1920’s and 30’s. In 1939 alone, over 2 million tonnes of scrap metal were sold by the US to Japan. The embargo of Japan by the Americans in early 1940 was one of the key factors in the launch of Pearl Harbor. The Japanese were cut off their supply of raw materials(scrap) and as such, attacked.

Is that a position we want to be in. People seem to forget that no matter what the Chinese sell us, from TV’s to Toothbrushes, we may think of capitalism and free-market society, but we are buying from communists.

Meanwhile, the eastern-half of Canada is buying oil from overseas. Why? Canada has enough production right now to cover all of the domestic consumption we have and then some. But we need means to get the oil from west to the east. One solution is gasoline/oil trains. Those run already from places like Montreal, Quebec to Maitland, Ontario, carrying gasoline to a bulk distribution center. Why not more trains carrying oil cross-country? Another solution is a pipeline from Alberta to Thunder Bay, tied up at the Lakehead. Use Great Lakes ships to carry oil from Thunder Bay on east. It already happens.

Domestic consumption seems so simple of an idea, it’s a no-brainer. Probably why our leaders haven’t thought of it.

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