The energy divide: Winner of U.S. election to play key role in Canadian industry

Whoever is sitting in the oval office come January will have a large say on the future of Canada’s energy industry.

The president of the United States will, of course, have no power to make decisions on behalf of a foreign industry. Yet just the knowledge of whether Barack Obama will win a second term or whether Mitt Romney gets to unseat the country’s first African-American leader to become its first Mormon leader could determine where Canada’s best energy customers will be found.

After struggling for years to gain access to China and other Asian markets with little success, many in the industry may be tempted by the policy paper the Romney campaign released last week calling for closer ties with Canada and Mexico to achieve North American energy independence by 2020.

Ottawa, meanwhile, has finally begun the formal process of deciding whether to open the floodgates to Chinese energy investment by allowing CNOOC Ltd., China’s largest state-owned offshore oil producer, to pay $15.1-billion for complete ownership of Calgary-based Nexen Inc.

Industry Canada only this week began its review of the bid, announced July 23, to determine the project’s “net benefit” to the country. The Investment Canada Act gives Ottawa a maximum of 75 days to make a decision – meaning the result of the process may not be known until about a week after Americans cast their votes on Nov. 6.

Much of the debate over which candidate would be the best friend to Canada’s oil patch has been framed by Mr. Obama’s initial rejection of TransCanada Corp.’s Keystone XL pipeline, which would deliver more than one million barrels of oil from northern Alberta to U.S. refineries each day. The 1,900-kilometre pipeline has come to symbolize the division between the energy policies of the two candidates.

Article Source: www.financialpost.com

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