ROK Drop

Avatar of GI KoreaBy on November 25th, 2011 at 7:16 am

After US Pipeline Delay, Canada Looks To Sell More Oil To China

» by in: Canada

It looks like the Canadian government is moving on with finding another buyer of their oil since the US delayed making a decision on the building the pipeline to export the oil to the US:

China is set to embrace Canada’s offer of more crude, heating up competition with the United States as the world’s top two oil consumers jostle to secure supplies and meet ravenous demand.

Shipments from a politically stable country such as Canada will be a welcome diversification of supply sources as top consumers make plans to deal with a supply shock if tensions in the Middle East escalate and choke off Iranian exports, barely a year after markets coped with a disruption from Libya.

Canada’s plan to ship crude to Asia got a boost after Prime Minister Stephen Harper said his nation would step up efforts to supply the region after the United States delayed a decision on a pipeline supply link.

“A Canadian source could offer a diversity of supply attractive particularly to North Asia,” said John Vautrain, director at consultancy Purvin & Gertz. “Canada is a stable country, not subjected to geopolitics, and the crude would be valued in the market to make it competitive.”  [Reuters]

Though China is willing to purchase the Canadian oil, South Korea and Japan may not unless they are willing to invest possibly billions in oil refining infrastructure:

Regardless of how much crude Canada has to sell, other Asian buyers in the Pacific — South Korea and Japan — may not be so keen to take more because the crude has API gravity below 20, which makes it one of the heaviest, or of lowest quality.

“The refining capacity is being expanded and with more supply issues, they can take the crude if it is at their doorstep,” said Kang Wu, senior advisor at FACTS Global Energy. “But that’s a big if.”

The low quality means other Asian buyers will have to blend with better crudes and reduce the sulphur content before processing, cutting into profits from processing each barrel. Or refiners have to build so-called secondary units that are capable of producing cleaner-burning fuels from low quality oil.

“Upgrading means you have to add a new unit and you have to retire some other units. That’s a tough choice that involves millions and billions of dollars of investment,” Wu said.

Getting back to the US-Canada pipeline, I am betting after the US Presidential election this pipeline will be approved no matter who wins the election.  I think President Obama had to delay this pipeline simply to appease his left wing base before the election and will turn on them afterwards if he wins because he knows building this pipeline is what is good for the nation.

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  • Teadrinker
    7:28 am on November 25th, 2011 1

    “Shipments from a politically stable country such as Canada will be a welcome diversification of supply sources as top consumers make plans to deal with a supply shock if tensions in the Middle East escalate and choke off Iranian exports, barely a year after markets coped with a disruption from Libya.”

    BS spin…In fact, Canada has been the largest supplier of oil to the US for a couple of years. Moreover, the vast majority of oil imports to the US come from Canada, Mexico, Saudi Arabia, Nigeria, and Venezuela (all politically stable countries).

  • John
    7:32 am on November 25th, 2011 2

    “I think President Obama had to delay this pipeline simply to appease his left wing base before the election and will turn on them afterwards if he wins because he knows building this pipeline is what is good for the nation.”

    No doubt Obama thinks he knows what is best for the nation. Unfortunately, history has shown that everything Obama “knows” is wrong. Obama knows that expensive fossil fuel is the only way to make alternative energy competitive. If the USA ceases to be an economic (or military) power along the way, so much the better.

  • Teadrinker
    7:35 am on November 25th, 2011 3

    Oh, and Stephen Harper is the worst Prime Minister Canada has ever had in recent memory.

  • Teadrinker
    7:36 am on November 25th, 2011 4

    Correction: has had in recent memory and probably ever had.

  • Avatar of GI KoreaGI Korea
    8:34 am on November 25th, 2011 5

    It doesn’t matter if the US imports oil from politically unstable countries or not. Any disruption in supply from an example like Iran would increase world oil prices no matter where it is being imported from because the demand will still be there but supply will be less. If the US was able to solely receive oil from Canada and Mexico with agreements that the oil price would be subject to supply and demand within North America then the US would be shielded from possible disruptions in the world oil supply.

  • Teadrinker
    9:16 am on November 25th, 2011 6


    Oh, right. So the producers would have to pump out as much oil as the US wants in order to guarantee that it gets it as cheaply as possible? Really, are you kidding?

  • Lemmy
    10:13 am on November 25th, 2011 7

    but, wait. If we get the oil from Canada, we’ll pay less for a gallon of gas at the pump. If you believe that you are an idiot.

  • kushibo
    10:39 am on November 25th, 2011 8

    Why does a 1% or 2% reduction in global output lead to a doubling spike in gas prices? The answer lies with the buyers and sellers of oil who wear ties to work, not the oilmen who wear boots and get the stuff out of the ground. It’s a scam they make billions from.

    And the (economic) fluidity of oil makes it virtually impossible to shield one’s own country from turmoil in other oil-producing areas, so getting more from Canada will mean little. Only if one’s sources are entirely domestic and tightly controlled (to prevent free-market sellers from selling freely to other markets) is one immune to the political intrigue that causes prices to shoot up.

    Anyway, exploiting the tar sands is an environmental disaster, and I’m not so sure the pipeline is a great idea either. It may not be quite as bad as mountaintop removal in terms of the damage it leaves to the surrounding water and land (or fracking), but it’s up there.

  • kushibo
    10:44 am on November 25th, 2011 9

    Forgot to add the second part… despite the fluidity of oil meaning there is little chance to protect one’s own markets, the fluidity of oil doesn’t come into play when some factor (e.g., turmoil in Libya) that has shot speculation-driven prices through the roof, later disappears. In other words, when the fluidity of oil works against us consumers, it’s strong as ever, but when the fluidity of oil would work in favor of us consumers, the markets seem to behave differently.

    We are constantly subject to an oil bubble but no one has the political cojones to do anything about it. An example of corporate moneyed politics having a deleterious effect on our political process as politicians — from both parties — must seek huge amounts of funding in order to get elected and re-elected.

  • ChickenHead
    12:33 pm on November 25th, 2011 10

    “If we get the oil from Canada, we’ll pay less for a gallon of gas at the pump.”

    We can park a carrier group off their east and west coasts and have daily B52 flybys along the border… maybe a base or two outside their major cities… United States Forces Canada.

    I’m sure they would see the wisdom of giving us continuously cheap oil in exchange for insuring their security.

    It’s a nice country… and it would be a real shame if anything happened to it.

    Actually it’s great that Canada is selling oil to China. Once China becomes dependent on it, it becomes very easy to disrupt the supply if necessary.

    Some smart people in Washington already figured this out and some smart people in Beijing did too… but need the oil and can’t do anything to avoid it right now.

  • JoeC
    2:09 pm on November 25th, 2011 11

    Fossil fuels are one of the safest investments there is. They are almost immune to real losses from their misadventures because the losses are immediately covered by (passed on to) consumers. With any hints of trouble, the highly speculative market drives their prices up.

    So, while the may pay lip service to it, they have little incentive to invest in non-revenue producing things like safety when they can just as easily write off the costs of disasters. Twenty years after the Exxon Valdez spill, Exxon still uses more single hull tankers than any other company in the industry.

    It’s not exactly sociaalism, but it does seem like a bad aspect of it when corporate heads rake in profits while passing off losses to everyone else.

    And do we really expect them to use a significant portion of their revenue and seriously develop alternative energy branches that would compete with and take away from their bread and butter?

    These things violate the corporate mandate; to maximize shareholder value.

    With such a secure and profitable business, why do they need such large government subsidies (tax breaks) again?

  • Teadrinker
    4:27 pm on November 25th, 2011 12


    I completely agree with you both.

  • Teadrinker
    4:33 pm on November 25th, 2011 13


    Sure, but the problem is that Harper is allowing the sale of Canadian oil companies to China. As I was saying, he’s incompetent. The only reason he’s even Prime Minister is because he appeals to many Western Canadian’s sense of inferiority. They have been jealous of Ontario and Quebec for years, where most of our Prime Ministers have been from.

  • Homeboy
    6:14 pm on November 25th, 2011 14

    Fossil fuel will run out eventually… what then? :cool:

    we’d all go back to the 19th century lives … with 21st century technologies… no air planes, so steam ships would be back… run by coal… cars run by batteries… (made in Korea, assembled in the States, China, and elsewhere)… nuclear power plants would spring up everywhere… no more satellites? you wouldn’t be able to shoot up rockets into the space… cleaner air…? may be but people would turn to coal more so bad air quality would be the norm… in the cities… no more mechanized infantry… no more blitzkrieg… wars would be fought American Civil War style… no more air force… no more ICBMs, B-52s, SSBMs, fighter jets… more smaller time detonated nuclear bomb… jeez… world would be a better place wouldn’t it?

    Let’s get rid of oil !! … If we do not have oil, best thing about it is no more oil companies… and the Middle East would be back to its nomadic days… no more terrorism… Islam would become benign religion once again… No more Israel… because Israelis would lose their edge in air, mobility, and nuclear strike capabilities… the number of men Arabs could field could just outnumber Israelis..armageddon….. just a thought

  • Homeboy
    6:18 pm on November 25th, 2011 15

    There would be huge demand for ships…clean environmentally friendly ships run by wind, solar energy….

    Cars running on solar energy as well…. accumulates electric power in the battery.. then it would turn it into a kinetic energy… then stores up energy…. vice versa…

  • Homeboy
    6:20 pm on November 25th, 2011 16

    ….and trains…the old fashioned coal-powered trains …

  • kangaji
    7:24 pm on November 25th, 2011 17

    We’ve had the technology to go into space without fossil fuels since the 1960′s, it’s just nobody’s had the political gravitas to do it. Nuclear blast powered rockets baby

  • Homeboy
    7:27 pm on November 25th, 2011 18

    :| nuclear blast ain’t kosher…

  • Retired GI
    7:59 pm on November 25th, 2011 19

    We could go back to whale blubber for oil. We could farm them like we do cows! :twisted:

    Nuclear powered HOMES! Little nuke in the back yard. I remember reading about it not long ago.

  • Lemmy
    12:26 am on November 26th, 2011 20

    Fossil fuel will run out eventually… what then

    Really? Why do you think oil is running out? Do you also believe in global warming? Do you believe drilling for oil in the Artic Wildlife Refuge will bring cheaper prices at the pump in Kansas?

    Do you believe something because someone tells you?

    Why do fuel economy standards on new vehicles still suck?

  • Lemmy
    12:36 am on November 26th, 2011 21

    The sky is falling! the sky is falling!

  • Hamilton
    4:50 am on November 26th, 2011 22

    Cheapest fuel on the planet and safer than ever: Nuclear…but wait..the greenies hate it since no one will need to live in a mud hut.

  • Homeboy
    5:24 am on November 26th, 2011 23

    #20, are you drunk? You don’t have much left. Oil isn’t spent only on the roads, it is processed for many different types of goods that we are familiar with. The need for it is huuuuge.
    But, it is only limited in supply. It will run out within this century.

    Americans are biggest spenders with their sprawling suburbs with no mass transits. The worst offenders of global environment. Americans do not even recycle. They throw their garbage away without sorting out the trash.

  • Retired GI
    6:08 am on November 26th, 2011 24

    23, America has an entire INDUSTRY devoted to sorting and recycling trash. Those “sprawling suburbs” often have three trash barrels per home to presort the trash.
    America is the biggest consumer of oil, if you discount China and the other emerging market countries hitting their industrial age.

    It will run out this century? :lol: I have a bridge to sell you from Florida to Texas. Cheap! Get in while you can. Time is running out on this great deal for the bridge! Hurry! Do it NOW! It is the latest in Mass Transit. (it is solar powered)

    Green is the new Red.

  • Hamilton
    6:38 am on November 26th, 2011 25

    The US has 2-4 HUNDRED years of coal left. We just are not allowed to mine it anymore. We have a nuclear future if we choose to embrace it.

  • Homeboy
    9:07 am on November 26th, 2011 26

    늙은이가 미쳤나? 암튼 어떨땐 미국놈들 이상해…까는 소리나 하고…

  • kangaji
    10:51 am on November 26th, 2011 27


  • Teadrinker
    9:49 pm on November 26th, 2011 28

    Anybody else notice how Homeboy seemingly learned to write in English properly in the span of a week?

  • Tom Langley
    4:12 am on November 27th, 2011 29

    Homeboy, we will NEVER run out of oil. If you google Sapphire Energy (there are a number of others as well) you will see that they are working to make biopetroleum. Just like nature make petroleum marine algae are grown and put under heat and pressure. The resulting substance can be refined into gasoline, diesel, kerosene, jet fuel, and petrochemical feedstocks. An area approximately the size of Costa Rica could supply enough biopetroleum to meet current world demand. When nuclear fusion is developed in the next few years the isotopes of hydrogen that are used for fuel are found in seawater and there is enough of that to last for centuries. The envirowackos says that development of the Canadian oil sands and the proposed pipeline to the US will boost the CO2 level, etc. The oil sands are going to be developed anyway, the question is does the oil go to China or to the US? Biopetroleum would be carbon neutral as the carbon released would be sucked up by the cultivation of the algae. Fusion of course produces no carbon at all. Fusion power could also desalinate seawater as there is a fresh water shortage in the world.

  • someotherguy
    7:10 pm on November 27th, 2011 30


    When talking about how much “oil” is left, its very important to include the context. We’re already halfway through the easy to find / easy to pump known reserves. We haven’t even scratched Oil Shale yet, we’re almost there though. And none of this counts deep unexplored oil sources, things that would be a few km under the surface of the earth. And if all else fails, we can create hydrocarbon fuels. All we need is carbon, oxygen and hydrogen, three of the most common elements in the universe, and an IMMENSE amount of energy. Once fusion becomes possible then we could easily create hydrocarbon fuels.

  • someotherguy
    7:17 pm on November 27th, 2011 31


    Hydraulic Fracturing is a pretty good way to mine oil shale. The leftists will stand on their soap box and while like usual. Breathing air is harmful to the environment, it creates CO2. So is walking through the woods with boots on, your disturbing the natural environments of hundreds of animal and insect species. Like all things you gotta weight in the pro vs con and take the choice that offers the most bang for the buck.

    And no, hydro fracking isn’t nearly as bad for the environment as coal mining or strip mining. And this is what really gets me, they’ll stand up and cry / scream about hydro fracking in the USA but gladly buy products made from materials that China tore a mountain apart to get and flattened the forest nearby for transportation and wood.

  • Teadrinker
    4:05 am on November 28th, 2011 32

    “The envirowackos says that development of the Canadian oil sands and the proposed pipeline to the US will boost the CO2 level, etc. The oil sands are going to be developed anyway, the question is does the oil go to China or to the US?”

    This is where you lost me. Building a pipeline won’t change China’s demand for oil. If it can’t get it from Canada, it will get it from wherever the US isn’t getting it. Remember, we’ve already seen the consequences of Chinese colonialism in Darfur.

    The solution is not only biofuel and nuclear fusion (the first commercial reactor isn’t expected until 2024), but a reduction in demand. Do soccer moms need a minivan with a 4.3L engine to shuttle the kids?

  • Homeboy
    5:51 am on November 28th, 2011 33

    Someotherguy, Tom Langley thank you for sharing your knowledge

  • Teadrinker
    7:18 am on November 28th, 2011 34


    Like everything, fracking is not without its problems…Unless:

  • Denny
    9:38 am on November 28th, 2011 35

    The reason why fossil fuels are so cheap is that it is easy to store and transport. Other forms of energy are more difficult to store and transport, driving up costs.

  • Tom Langley
    12:51 pm on November 28th, 2011 36

    Teadrinker #32, the point that I was trying to make in post #29 was that the envirowackos want to stop the Canadian project because of environmental concerns. I am saying that whether or not the pipeline is built to the US is that the oilfield is going to be developed anyway. If the oilfield is going to be developed anyway then any alleged environmental harm will happen anyway. The reason that I said that it will be developed anyway is that instead of being sold to the US is that it will be sold to China. Any country for security reasons wants to diversify its sources of energy. As to your comment about nuclear fusion not being commercially available until 2024. That may be true for ITER, the international project being built in France but I suggest you google “General Fusion” which is a CANADIAN company who believe that they can have a working reactor by 2013. They are getting investors so hopefully they may be right. I also agree with conservation which can conserve existing supplies of energy but it does not provide new supplies of energy.

  • someotherguy
    6:50 pm on November 28th, 2011 37

    Nice attempt, but it’s actually wrong. It’s not the soccer moms who are using high amounts of fuel, its industrial transportation. Construction equipment and 18-wheelers, mostly shipping trucks. Are you willing to “reduce demand” and not ship products from one region to the next? The whole “reduce demand” argument is just BS when used in context of consumer motor vehicles. It’s another attempt to have you cut down your own standard of living so someone else can be driven around in a limo, while telling you that you should sacrifice more.

    @34, I’m well versed with hydro fracking, something your not. It’s not the fracking compounds that end up with ground water contamination, even though the environ whackos will say it. Its the natural methane released from the newly cracked ground that ends up in the local water supply. The whole point of hydrolic fracturing is to more the ground more permeable so you can extract the natural oil and gas present. Otherwise the ground is too dense to allow this gas to be released, this includes methane. Once you’ve fractured the rock then the natural oil and gas floats up and can be extracted, some methane being what it is will be released into the ground above the fracture and it’ll slowly rise until it’s absorbed into water or released into the atmosphere. Current technology use’s an ice wall created around the fracture fluid, very little fluid gets released. Fluid-less methods are inefficient and actually don’t work most of the time, you end up having to go back down and fracture more with a high pressure fluid.

  • Tom Langley
    10:15 pm on November 29th, 2011 38

    There is an article in todays Phys Org in the biology/biotechnology section (I’m sorry but I don’t know how to post a link to it, the article is dated 11/29) about how researchers have taken genetically engineered E-coli bacteria & have been able to make them to digest switchgrass after it has been immersed in an ionic (salt) liquid and produced to precursors to gasoline, diesel, & jet fuel. This has been done before but this according to the article is the first time that they have been able to make the precursors for the 3 transportation fuels simultaneously. The 3 precursors can then be refined into gasoline, diesel, & jet fuel. Peak oil=BS.

  • Tom Langley
    10:22 pm on November 29th, 2011 39

    Teadrinker, I forgot to add that Canada is withdrawing from the Kyoto treaty. I’m liking your country more & more.

  • kushibo
    10:29 pm on November 29th, 2011 40

    Tom Langley, interesting. The idea of engineering bacteria to conduct various functions (e.g., digest and eliminate toxic waste, produce fuel, etc.) has been around for a while and we’re moving ever forward toward that goal.

    And when it comes to engineered e. coli bacteria produced on a massive scale, the best part is that nothing could ever possibly go wrong with this technology. ;-)

  • Glans
    11:19 pm on November 29th, 2011 41

    GI Korea believes that his commander in chief will do what’s best for the nation. That’s the nicest thing I’ve read on this blog in a long time.

  • Tom Langley
    11:48 am on November 30th, 2011 42

    Kushibo #40, Genetically engineered bacteria including E. Coli have been used for years if not decades to make drugs such as insulin, etc. The microbes are made with genetic instructions (I don’t know if that is the right word to use) so that if they escape from the factory that they don’t have the ability to live on their own. Also it is very hard for a new microbe to gain a niche in the microbial ecosystem. The E. Coli were originally found in human & other animal intestinal tracts (of course each species has its own strain). I did however get this mental image of some poor guy with diarrhea $hi+ing out gasoline from his piper. I hope nobody lights a match, lol.

  • kushibo
    12:11 pm on November 30th, 2011 43

    Tom Langley, we are talking very, very different degrees of scale between volumes of insulin and volumes of fuel.

    I’m not saying it is a bad thing to do, but we should be aware that there are quite possibly as-yet-unpredicted consequences that could happen. So many of our problems come from people moving full force into some action thinking that there will be no equal and opposite reaction, as if their own action is the end game.

    This is where we get a prolonged Iraq War, environmental damage from mountaintop removal, using last-line-of-defense antibiotics in mass amounts with our cattle and pigs, etc.

    The e. coli can be “programmed” so that they’re supposed to die, and 99.99% of them might. But that’s the thing with bacteria, that 0.01% (or less) can end up with some new genetic innovation we didn’t count on and boom, we’ve got Zombie Holocaust or something.

    I’m being glib, but it’s a serious point. I’m like the mathematician on Jurassic Park played by Jeff Goldblum who says, in response to the grandpa guy (?) telling him that all the dinosaurs are genetically designed not to be able to survive without a certain protein and not to be able to procreate on their own, that nature always finds a way. And sure enough, in Jurassic 2, there it is. :|

  • Tom Langley
    9:54 pm on November 30th, 2011 44

    Kushibo, I do agree with you about the indiscriminate use of antibiotics in cattle, pigs, & chickens. That to me is just crazy. It has been proven that bacteria share genes including resistance to antibiotics. I do think before these fuel producing bacteria are used that environmental studies should of course be made.

  • Chemlightbatteries
    12:52 pm on February 18th, 2012 45

    If you Rock out with your Glock out, you might can survive the Zombie Apocalypse lol! :twisted:


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