The new energy revolution – by Margaret Wente (Globe and Mail – July 24, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Welcome to the future. Chances are you’d never heard of Nexen or CNOOC before yesterday. But the $15.1-billion proposed takeover of Nexen by a huge state-owned Chinese oil company shows the way the world is going. We are seeing major new alliances that would have been unthinkable just a decade ago.

The deal has yet to be approved by Ottawa. But it plays right into Stephen Harper’s strategy of maximizing our opportunities as a global petro-power. Canada needs the Chinese and they need us, and it looks like everyone will wind up a winner – everyone, that is, but the large army of doomsayers who think the energy boom is stealing our soul.

Nexen has huge ambitions, but it’s a global pipsqueak. Like the industry as a whole, it needs enormous infusions of capital to realize its potential. The Chinese have huge amounts of money to invest in energy development and they’re scouring the world for opportunities. Their time horizon is very long. Canada is safe and secure – and also technologically advanced. For them, this is a no-brainer.

CNOOC is not the Politburo dressed up in pinstripes. It’s listed on the New York Stock Exchange. It’s canny enough to have hired good advisers whose job is to help it build goodwill in Canada and make sure it doesn’t do anything that might alienate its new Canadian friends.

The energy revolution is happening at lightning speed. We haven’t noticed yet because we’re so transfixed by all the bad news. The good news is that thanks to an astonishing array of recent oil and gas finds – which can be tapped by new technologies – the United States is becoming an energy superpower, capable of supplying far more of its own needs than before. According to the U.S. Government Accountability Office, the Green River Formation alone in Colorado and Utah contains more than a trillion barrels of recoverable oil. That amount is about equal to the entire world’s proven oil reserves. Everything you’ve ever heard about peak oil is obsolete.

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