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Cheney drops out, Hu flies on Hurricane Katrina forces Bush’s right-hand man to cancel oil sands visit, but Chinese leader drops only U.S. from travel plans Gary Park Petroleum News Canadian Correspondent
Vice President Dick Cheney canceled his early-September visit to the Alberta oil sands for obvious reasons.
Less obvious is why China’s President Hu Jintao is still scheduled to spend seven days until mid-September in Canada, having dropped the United States from his itinerary because of Hurricane Katrina.
At a time when the United States and China are both casting covetous eyes at Canada’s energy resources, the fact that Hu is still making Canada his first stop since becoming supreme leader in 2003 and bringing 100 of China’s top business executives with him could cause some misgivings in Washington.
Had a nasty Canada-U.S. trade dispute still been raging there might have been added anxieties within the Bush administration.
In the wake of the arrival earlier this year by three of China’s state-owned energy companies in the oil sands sector, there would have been reason to pay close attention to Hu’s stops had they included Alberta.
Instead, subject to late change, the bulk of his program involves Ottawa, Toronto and Vancouver.
It’s expected oil and natural gas will still get an airing, along with a host of other trade topics such as uranium, high technology, pollution control technology, engineering services and financial services.
On the grand scale, the pieces form part of a larger whole that Earl Drake, Canada’s ambassador to China from 1987 to 1990 and now vice-chairman of the Canada China Business Council, told the Globe and Mail is a search by China for “new opportunities for trade and investment. They have a lot of money available.” Canada sends Katrina aid In the meantime, Katrina blew away for the time being the trade tensions spilling over the 49th parallel from both directions.
Among several gestures of neighborliness, Canada is sending three warships, a Coast Guard vessel and 1,000 soldiers to the disaster zone.
From a pure energy standpoint, industry and government efforts have seen Alberta suspend maximum production limits; producers, refiners and pipelines are trying to identify small de-bottlenecking projects to improve exports to the United States; and scheduled refinery maintenance and shutdowns this fall may be delayed.
The immediate impact on shipments from Alberta to the United States will be small, with crude production rising by only 18,000-30,000 barrels per day in a province that currently produces about 1.6 million barrels per day.
But Alberta Premier Ralph Klein said his governments “wants to assist its neighbors in any way possible.”
Deputy Prime Minister Anne McLellan said stepped up conservation efforts across Canada could free another 90,000 bpd for export. Excess production could harm productivity The Canadian Association of Petroleum Producers is adding its weight to that push, issuing a “call for action” for Canadians to lower their fuel consumption and not to “hoard” gasoline.
The association is also involved in talks with the U.S., Canadian and Alberta governments to explore any other solutions.
But it cautioned that a sharp production boost could endanger the long-term productivity of wells.
Enbridge has indicated that it may have space to carry another 200,000 bpd, but a spokesman told Petroleum News that much depended on what crude products would be available and whether they could find a market beyond Superior, Wis.
For now, he said Enbridge is talking with governments at all levels — the United States, Canada and Alberta — to determine what might be possible.
Enbridge has various interests in five U.S. pipeline systems, with combined capacity of more than 900,000 bpd.
Terasen said its two pipelines — the 172,000 bpd Express system from Alberta to Wyoming and the 150,000 bpd Platte network within the United States — are operating at peak and have no scope for expanded shipments.
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