Ethical oil and China

Operation Iraqi Freedom is the multi-national coalition effort to liberate the Iraqi people, eliminate Iraq’s weapons of mass destruction, and end the regime of Saddam Hussein.

A great deal of attention has been paid to two pipeline projects — one that will see Alberta’s oilsands bitumen transported across the U.S. to the Gulf of Mexico (Keystone XL), and one that will run it through the Great Bear Rainforest in B.C. for shipment to Asia (Northern Gateway).

The projects have serious implications, ranging from potential environmental devastation due to a spill, to our further dependence on a resource that is long past its gone-stale date.

But there is another implication, specifically tied to the Northern Gateway pipeline and the inevitability of increased investment from state-controlled Chinese companies. At what point does investment from an autocratic regime undermine Canadian claims to ethical oil, if such a thing ever really existed in the first place?

Journalist David Ebner, in an article in this month’s Alberta Views magazine, asks an important question: how much foreign investment, specifically from state-controlled Chinese enterprises, is too much for Canada? What if PetroChina buys Syncrude?

The argument for Canada’s oil somehow being more ethical than other producers in the Middle East, Africa and Latin America, was first posited by conservative muckraker Ezra Levant. It should come as no surprise that his book Ethical Oil: The Case for Canada’s Oilsands has essentially become a guidebook for pro-oilsands rhetoric and the Conservative government of Canada. Alykhan Velshi, a former director of communications for immigration minister Jason Kenney, started ethicaloil.org in order to spread the ideas first developed in Levant’s book.

There are flaws in the rhetoric, especially around the environmental implications of the oilsands and whether a product that is harmful to the environment can ever truly be ethical, no matter if one jurisdiction takes more care than another. But what is ignored is whether increased investment from state-controlled business from China undermines, or will undermine, the claim that to buy from Canada is better than, say, Saudi Arabia.

Now, China isn’t sweeping through the oilsands region, hungrily consuming companies and laying the groundwork for a takeover of the reserves. Even if the Chinese government had an interest in doing that, the Canadian government would step in and regulate the transactions. China will never own the oilsands. But it is steadily increasing investments.

Over the last few years, Chinese companies have invested approximately $10 billion in the oilsands. Considering the billions of dollars of investment, capital and profits flowing from northern Alberta, that’s not a terribly high number. But that number, by all accounts, is going to go up.

Ron Liepert, Alberta’s energy minister, Prime Minster Stephen Harper and Alberta’s man-of-many-hats Lloyd Snelgrove (president of the treasury board, minister responsible for corporate human resources and minister of finance and enterprise), have all indicated that increased investment in the oilsands by China is not only positive, but inevitable. Recent talks between government officials and business leaders from China and Canada suggested that Chinese investment in the oilsands could triple in the coming years, though without the Northern Gateway, that investment prediction could fall.

On ethicaloil.org , the website seeks to put distance between bad oil (mostly Saudi Arabia) and good oil (mostly Canada). When the group paid for TV ads condemning Saudi Arabia’s terrible human rights record, the kingdom threatened to sue media outlets if they ran it. In response, Velsi said: “They’re just not used to being criticized. So they immediately reverted to thuggish censorship tactics.”

That’s an interesting choice of words: Thuggish censorship tactics. It’s a phrase that applies just as well to the autocratic Chinese government, which stifles dissent on a regular and chilling basis. There is a long list of infractions that are even worse: the wholesale destruction of Tibetan culture, the suffocation of the Uyghur people or the Tiananman Square massacre, to name a few.

But if the connection between Chinese investment and claims of ethical oil are a little too abstract for you, then perhaps you should consider this: In order to ship bitumen through those shiny new pipelines, the heavy oil from Alberta must be diluted. Often, that means blending it with light oil. That light oil comes from some pretty unseemly places, including Saudi Arabia. We are literally blending the so-called evil oil with the ethical stuff.

So, what happens when good oil meets bad? And what happens when peace, order and good governance gets in bed with a tyrant? Who knows, but it doesn’t sound very ethical, does it?

This post originally appeared in Fast Forward Weekly.

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