About three weeks ago, Barack Obama nixed the Keystone XL pipeline that would have transported 900,000 barrels of oil per day from the Canadian tar sands to the gulf coast region of the U.S. The pipeline project would also create 20,000 direct jobs and potentially hundreds of thousands of indirect jobs according to economic analysis.
Spurned by Obama's rejection, Canadian Prime Minister Stephen Harper stated that if Canada's next door neighbor and close ally didn't want Canada's oil, then he'd pursue other markets to "diversify" the market for Canada's natural resources. It didn't take him long.
Harper was in Beijing this week where he "pledged closer trade ties with China" during talks with Premier Wen Jiabao. Finding alternative markets for its natural resources has become a top priority for Canada, which today sells nearly all of its oil to the U.S., but sees environmental regulations from Washington as an increasing impediment to its oil-export ambitions, according to a report about Harper's trip in the Wall Street Journal.
From the WSJ:
The trip is part of a broader strategic push by Canada to more closely align itself with China and reduce its reliance on the U.S. Mr. Harper aims to increase Canada's capacity to export oil and other resources to China, an effort that has intensified following the Obama administration's decision to reject for now TransCanada Corp.'s Keystone XL pipeline
Obama's rejection of the Keystone XL pipeline was dumb on top of stupid. It killed a legitimate job creating, energy providing shot in the arm for the American economy in desperate need of some good news. The rejection also forced a great ally and trading partner to seek favor with America's largest economic and political competitor in the world.
The Chinese are more than willing to fill the void created by Obama's mistaken decision, and take advantage of Canadian oil to expand the Chinese economy on a path to overtake the U.S. as the world leader.
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