August 15, 2019
Keith Kohl is a writer for Energy & Capital: A Practical Investment Newsletter which analyzes the New Energy Economy. He recalls stepping off the plane in Calgary nearly a decade ago on his first junket to the Alberta oil sands. My wife and I currently live in Calgary, and have also made the trek to the Fort McMurray Oil Sands, so were curious as-to-what brought him 2300 miles from Baltimore to travel an additional 500 more mile north.
You may recall that a decade ago, the U.S. was importing about 2.5 million barrels of oil from Canada every day. The oil recovery process is a vast undertaking with trucks that are the size of small houses and a massive mining surface clearly visible from space. Yes! Very impressive.
What stood out most in our writer’s mind were the little placards situated next to every major object in the room and throughout the hotel itself. One thing about them stood out like a sore thumb: all of the signs were written in Chinese; summing up the future of the oil sands perfectly.
China’s Secret Oil War
If nothing else, you have to credit China for always looking long term. That’s precisely how they’re securing future oil supplies. For years, China has been shoring up its energy security by pouring investments into foreign countries. Unlike Venezuela’s oil industry, which has been incredibly unstable, Canada offers China something it’s been craving all along: energy security.
All we need now is a pipeline to the coast… [Cenovus Energy (NYSE: CVE) is the largest and one of the most efficient SAGD producers in Alberta right now and has rewarded shareholder with a 42% move since December ’18.]
That’s the first place I’d start. 😉