Opportunity Knocks on Canada’s Door
November 04, 2014
Canada’s Prime Minister Stephen Harper will meet with Chinese President Xi Jinping in the next few days. The potential for major energy exports to China from Canada exist, as do investment opportunities for both countries.
In regards to Chinese energy:
- China burns as much coal as the rest of the world combined. Coal produces twice the carbon dioxide, more than three times the nitrogen oxide and 99% more sulphur dioxide than natural gas. As well natural gas produces no particulates.
- China will need 50% more power by 2040 than it uses today. In 2011 China burned coal for 70% of its energy needs.
- Canada has a 200+ year supply of natural gas at current prices.
A few general notes on Chinese investments:
- China is investing more than $4B in Mexico City’s high speed rail system.
- China is planning on a $15B investment program for infrastructure improvements with Asian neighbors.
- Canada has been the largest recipient in the world of Chinese investment in energy companies: $35B from 2005-2014. The largest investments have been in the oilsands.
Energy exports from Canada’s west coast are years away.
- The Enbridge Northern Gateway oil pipeline has been approved by the regulator but faces implacable opposition.
- The Kinder Morgan Trans-mountain upgrade to increase line capacity has just entered the regulatory process.
- A total of 18 LNG projects have been proposed for BC. Several have been licensed for export, but no final investment decisions have been announced.
China has a huge pollution problem due in part to burning coal for its energy needs. Canada can offer a solution - low pollution LNG.
It remains to be seen whether oil exports from BC will occur.
The opportunity beckons and time will tell on whether Canada can avail itself of the opportunity.
- a)http://www.theglobeandmail.com/news/politics/harper-seeking-to-reset-relationship-during-china-visit/article21422033/ and Gwyn Morgan "Time to seize a prosperous future fueled by natural gas", Globe and Mail, 3-Nov-2014, p.B6.
- Nathan Vanderklippe, "A love affair cools", Report on Business Special Issue, Nov-2014, p. 62