Top: A tar sands extraction facility near Fort McMurray
The takeover of two Canadian energy firms by foreign state-owned companies has been given the green light by Ottawa, even as a recent poll indicates a large majority of Canadians oppose the move. China's CNOOC has been given the go-ahead on the purchase of Calgary-based petroleum producer Nexen Inc. - a $15 billion dollar deal; Malaysia's Petronas also got the go-ahead in the purchase of Progress Energy Resources Corp., a natural gas company.
Seven out of ten Canadians oppose the CNOOC deal - some 69% according to a Sun News-Abacus poll. An Angus-Reid poll shows similar disapproval levels with 6 out of 10 against the Nexen deal. The poll indicates that 58% of Canadians want the government to reject the deal with CNOOC. Fewer than one in eight - 12% - want the purchase to go through.
A more recent Ekos poll has 72% strongly or somewhat in opposition to the deal. Barely 15% are in support of the deal and of that only 3% support it strongly.
In giving the deal the green light the government is pressing an agenda that shows a dramatic lack of popular support. There are many good reasons why Canadians are right to be concerned about the direction Harper is taking the country.
A few pundits see it as a desperate move by Harper and it's not hard to understand why. There are large questions about the future viability of bitumen. Dirty tar sands oil is hugely expensive to produce. According to this CBC report tar sands costs have been soaring. There have been concerns that investors might get cold feet given the "massive amounts of money needed to develop the oilsands."
Harper claims that the CNOOC/Petronas' deals are "exceptional" cases. Maude Barlow has a different take on it:
He [Harper] made changes to the Investment Canada Act that raised the general threshold under which there would be no review of foreign takeovers to $1 billion while leaving it at $330 million for bids by state-owned firms. He appeared to close the door to ownership of the tar sands by companies controlled by foreign governments.
But he didn't close it at all. He left it wide open and signaled to China, Malaysia and other countries that Canada's strategic energy resources were entirely for sale, not just to the highest bidder but to any bidder at all. Foreign ownership of the tar sands, whether state-owned or otherwise, was to become the norm, not the exception.
The deal gives Chinese firms an edge in a number of key respects, especially down the road if grievances go to arbitration. A Toronto Star article provides some details and talks about possible scenarios:
The deal will tie the hands of Canadian governments, especially in the resource sector, once Chinese firms buy Canadian assets. It allows Chinese companies to sue Canada outside of Canadian courts. Remarkably, the lawsuits can proceed behind closed doors. This shift to secrecy reverses a long-standing policy of the Canadian government.
...any state entity in Canada — from federal or provincial legislation to a Supreme Court of Canada decision — can be challenged by a Chinese investor. The arbitrators, if they conclude that the decision violates flexible standards of investor protection, can issue orders and award damages against a country.
On the other hand, no one in Canada including the government will be able, under the deal, to sue a Chinese investor for breaking any laws. The claims are one-way. Also, only the federal government can participate in the arbitrations. Provincial governments, Canadian companies and other constituencies have no right of standing even if their interests are affected directly.
On the environment front, the regressive fossil fuel priorities of the Harper government fly-in-the-face of scientific data that calls for an urgent change of course in order to tackle the threat posed by climate change.
In a NY Times op-ed, James Hansen, director of the NASA Goddard Institute for Space Studies, points out that the tar sands... "contain twice the amount of carbon dioxide emitted by global oil use in our entire history."
The concentration of carbon dioxide in the atmosphere has risen from 280 parts per million to 393 p.p.m. over the last 150 years. The tar sands contain enough carbon — 240 gigatons — to add 120 p.p.m. Tar shale, a close cousin of tar sands found mainly in the United States, contains at least an additional 300 gigatons of carbon. If we turn to these dirtiest of fuels, instead of finding ways to phase out our addiction to fossil fuels, there is no hope of keeping carbon concentrations below 500 p.p.m. — a level that would, as earth’s history shows, leave our children a climate system that is out of their control.
It's not only concerns related to the environment and rights that make the tar sands a liability, there is also the lack of vision in heading myopically in this direction when Canada ought to be investing in the future by putting serious resources behind the development of alternative/renewable energy.
Jeremy Rifkin, an adviser on renewable energy to the European Union, believes it is a huge mistake to place so much emphasis on tar sands production. Rifkin was quoted in the Globe and Mail saying that the tar sands project “is putting [Canada] back in the 20th century, when Europe and Asia are absolutely moving into the 21st century... this is a really, really historic mistake for Canada.....[It] could potentially become a second tier country.”