Welcome to the future. Chances are you’d never heard of Nexen or CNOOC before yesterday. But the $15.1-billion proposed takeover of Nexen by a huge state-owned Chinese oil company shows the way the world is going. We are seeing major new alliances that would have been unthinkable just a decade ago.
The deal has yet to be approved by Ottawa. But it plays right into Stephen Harper’s strategy of maximizing our opportunities as a global petro-power. Canada needs the Chinese and they need us, and it looks like everyone will wind up a winner – everyone, that is, but the large army of doomsayers who think the energy boom is stealing our soul.
Nexen has huge ambitions, but it’s a global pipsqueak. Like the industry as a whole, it needs enormous infusions of capital to realize its potential. The Chinese have huge amounts of money to invest in energy development and they’re scouring the world for opportunities. Their time horizon is very long. Canada is safe and secure – and also technologically advanced. For them, this is a no-brainer.
CNOOC is not the Politburo dressed up in pinstripes. It’s listed on the New York Stock Exchange. It’s canny enough to have hired good advisers whose job is to help it build goodwill in Canada and make sure it doesn’t do anything that might alienate its new Canadian friends.
The energy revolution is happening at lightning speed. We haven’t noticed yet because we’re so transfixed by all the bad news. The good news is that thanks to an astonishing array of recent oil and gas finds – which can be tapped by new technologies – the United States is becoming an energy superpower, capable of supplying far more of its own needs than before. According to the U.S. Government Accountability Office, the Green River Formation alone in Colorado and Utah contains more than a trillion barrels of recoverable oil. That amount is about equal to the entire world’s proven oil reserves. Everything you’ve ever heard about peak oil is obsolete.
This development is transformational. It will change the face of geopolitics. Abundant energy will also refuel economic growth. And the industry is already creating hundreds of thousands of new jobs in rustbelt states that need them the most.
Canada is part of the revolution. Our oil sands contain as much or more oil – recoverable with existing technology – as Saudi Arabia. Huge shale gas finds in northeastern British Columbia could supply the market, at current volumes, for a hundred years. “Canada’s mining and oil wealth is not just minerals dug from the ground,” Don Coxe, a leading investment strategist, points out. “It is the managements, geologists, engineers, drillers, workers and investment bankers who staff companies headquartered in Canada that operate across the world.” On top of that, the industry will be a big source of high-income jobs for blue-collar workers – the kind of jobs we thought had disappeared.
The politics of energy – fierce, often bitter debates over foreign takeovers, pipeline construction, land claims, environmental costs, wealth sharing and much else – will dominate our news for years to come. Meantime, private-sector ingenuity is overcoming major obstacles. New and less destructive extractive technologies could reduce the entire footprint of the oil sands to the size of the Greater Toronto Area. And if new pipelines can’t get built, one day, we may send the stuff to Texas by train.
Investors want high growth in safe places, and we’ve got it. Energy consumers want secure supplies from safe places, and we’ve got that, too. The doomsayers will kick and scream, but most Canadians know that energy wealth will help to underwrite our social programs and enrich our RRSPs. Wilfrid Laurier was almost right when he said the 20th century belonged to Canada. He was only off by 100 years.
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