Analysis

China’s Investment in Canada’s Oil Sector: Espionage in Disguise
Canadian Prime Minister Stephen Harper meets with Chinese President Hu Jintao in Beijing to discuss trade deals that could lead to large Chinese purchases of Canadian oil, February 9, 2012. (DIEGO AZUBEL/AFP/Getty Images)
June 13, 2012
| Security, Energy
| Asia and the Pacific, The Americas
Summary
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After the Obama administration shelved the Keystone XL pipeline last November, vocal critics, including the former Speaker of the House Newt Gingrich, expressed deep concern that the decision would push Canada into the open arms of energy-hungry China. While this could still happen, a less talked-about issue is arguably of greater importance — namely, China’s ongoing efforts to acquire oil extraction technology and know-how under the benign umbrella of investments in Canada’s energy sector.

China’s ultimate geopolitical goal is not merely to buy more foreign oil to keep its economy growing, but rather to gain energy security. This means increasing its access to oil that cannot easily be shut off by the United States in a future crisis. Oil from Canada fails this critical test, but the oil extraction technology and know-how that can be found in its Alberta province would help China develop the energy resources within its own borders. LIGNET believes Beijing is more eager to acquire these sophisticated tools and the expertise than it is to buy Canadian oil.

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