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North American Energy Security Act

Floor Speech

Location: Washington, DC


Mr. ISAKSON. I thank Senator Hoeven for the recognition, and I thank the leader for his remarks.

I just want to confirm what the leader just said by quoting from two recent articles. The first is from an article about Minister Oliver, who is Canada's Minister of Natural Resources, on his trip to Shanghai. Here is his quote:

My mission to China is clear. I have come to raise awareness of the strength of Canada's natural resource sectors--as both an outstanding source of quality products and an attractive destination for investment.

Let me read one other quote that occurred shortly after that speech was made by the Canadian Minister of Natural Resources:

A unit of China Petrochemical Corp., [known as] Sinopec, agreed to buy Daylight Energy Ltd., a Canadian oil and natural-gas producer, for 2.2 billion Canadian dollars .....--China's second [purchase and second] foray into Canada's oil patch in [the last year].

So to confirm what the leader has said, and to confirm what Senator Hoeven has acknowledged, this is not something we might fear happening later on. This is something happening now. If we default on the Keystone XL Pipeline now, we are giving a wide open year for the Chinese to come back to Canada, make those investments, tie down that oil, and encourage that pipeline to go--not to Houston, TX--but to Vancouver, Canada, and then on ships to China.

I ask unanimous consent that the full text of both of these articles be printed in the Record.

There being no objection, the material was ordered to be printed in the Record, as follows:

[Natural Resources Canada, Nov. 9, 2011]
Minister Oliver Promotes Canadian Energy in China

``My mission to China is clear. I have come to raise awareness of the strength of Canada's natural resource sectors--as both an outstanding source of quality products and an attractive destination for investment,'' said the Honourable Joe Oliver, Canada's Minister of Natural Resources, while speaking today at the Canadian Chamber of Commerce in Shanghai.

The Minister has been in Beijing and Shanghai this week meeting with senior government officials and leaders of Chinese companies.

Minister Oliver met with Vice Premier Li Keqiang and discussed the role of investment and trade in energy and mineral resources in contributing to Canada's long-term strategic partnership with China. He also signed an agreement with the President of the Chinese Academy of Sciences, Professor Bai Chunli, to expand cooperation on science and technology in earth sciences and natural resources.

Over the last few days, Minister Oliver has held meetings with major Chinese energy companies including Sinopec, China National Offshore Oil Corporation and Petrochina to discuss Canada's enormous energy resources and attractive investment climate.

``As reaffirmed today in the International Energy Agency's 2011 World Outlook, global energy demand is expected to increase by one third from 2010 to 2035,'' said Minister Oliver. ``Given that Canada is also projected to be an ever-increasing contributor to global energy supply, our Chinese investors recognize the importance of getting into the Canadian energy market right now.''

The Minister discussed the Government of Canada's key strategic policy of diversifying Canadian energy markets and participated in a joint Canada-B.C. event with Canadian and Chinese industry officials to promote exports to China.

Minister Oliver met with Vice Chair Zhang Xiaoqiang of the National Development and Reform Commission on strengthening Canada's long-term strategic partnership with China through two-way trade and investment in energy and natural resources.

While in Shanghai, the Minister also toured the Jinqiao Wood Townhouse Demonstration Project, where he underlined the many benefits of Canadian wood-frame construction expertise for China.

This demonstration project is one of several in China funded by the Government of Canada to showcase the low-carbon, environmentally friendly and energy-efficient properties of wood-frame construction, and to assist China in meeting its national goals of reducing carbon emissions in new housing projects.

Minister Oliver continued to highlight the phenomenal growth in exports of wood products when he met with Vice Minister Qiu Baoxing, Ministry of Housing and Urban Rural Development, as well as with British Columbia Premier Christy Clark and Pat Bell, BC Minister of Jobs, Tourism and Innovation, to discuss trilateral cooperation on wood-frame housing in China.

Minister Oliver will now continue on to Tokyo and Sendai, Japan.

[From the Wall Street Journal, Oct. 10, 2011]
Sinopec Deepens China's Push Into Canadian Oil Patch

(By Edward Welsch)
A unit of China Petrochemical Corp., or Sinopec, agreed to buy Daylight Energy Ltd., a Canadian oil and natural-gas producer, for 2.2 billion) Canadian dollars (US$2.12 billion)--China's second big foray into Canada's oil patch in recent months.

In July, Cnooc Ltd. agreed to pay just over $2 billion for bankrupt OPTI Canada Inc., in a rare move by a Chinese company to swoop in and swallow an entire company instead of tiptoeing in with a minority stake.

In the North American energy sector, in particular, Chinese companies have been wary of political fallout if they are seen as acting too aggressively in a sector that many consider to be strategic.

But the two recent moves suggest sensitivities in Beijing may be easing somewhat--at least regarding business in Canada. The federal government in Ottawa and its semiautonomous provincial counterparts have long welcomed foreign investment in the Canadian oil patch, which includes vast conventional oil and natural-gas reserves, but also the much more capital-intensive, oil-sands developments of northern Alberta.

Canadian companies, with relatively small domestic capital markets to fall back on, have relied on foreign investment--including from China--though more often that has come in the form of minority stakes in companies, or joint ventures in certain capital-intensive projects.

Last year, for instance, Sinopec bought ConocoPhillips' 9 percent stake in its large Syncrude oil-sands project in northeastern Alberta for $4.65 billion.

Recently, some Canadian politicians and businessmen have expressed new wariness over big foreign deals.

Ottawa rejected Australia-based BHP Billiton Ltd.'s $39 billion attempt to buy Potash Corp. of Saskatchewan Inc. last year. The Canadian government said the deal wouldn't bring enough economic benefit. However, a campaign against the takeover launched by the local government of Saskatchewan generated significant support from regional politicians and the public.

The Sinopec-Daylight deal will face the same sort of government review that other significant foreign deals undergo, including a federal sign-off. But it isn't expected to garner the same sort of scrutiny as the BHP-Potash bid.

Potash holds a significant chunk of the world's reserves of potash, a critical raw material in fertilizer. Critics used that market dominance to argue that Potash was a strategic asset that should remain in Canadian hands.

Daylight, meanwhile, is a relatively small energy competitor--one of scores of Canadian companies that hold just a thin slice of the country's overall petroleum reserves.

Daylight produces light oil and natural gas from properties in northeast British Columbia and northwestern Alberta. The company produced just 37,000 barrels of oil equivalents in the second quarter. But Daylight has accumulated a significant undeveloped land position in the emerging liquids-rich Duvernay shale-gas play in Alberta.

Sinopec is laying down a sizable premium for the deal. In a statement Sunday, Daylight, based in Calgary, said that Sinopec had agreed to buy the company for C$10.08 a share, representing a premium of 43.6 percent over the 60-day weighted average price of the stock ending Oct 7.

``We believe this transaction with [Sinopec] recognizes the highly attractive asset portfolio and exceptional team that we have assembled,'' said Anthony Lambert, the president and chief executive of Daylight, in the statement

Barclays Capital advised Sinopec on the transaction. Canaccord Genuity Corp. advised Daylight. Q02


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