China-Canada oil deal shows more U.S. drilling needed: Senator

WASHINGTON Tue Jul 24, 2012 6:36pm EDT

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WASHINGTON (Reuters) - Republican senators will unveil new energy legislation on Thursday that will help battle a new move by China to tap North American energy resources, Senator John Hoeven said.

China's state-owned oil company CNOOC Ltd. launched a $15.1 billion takeover bid for Canada's Nexen Inc, a company with operations in the Gulf of Mexico as well as in Canada's oilsands.

Hoeven said the deal shows the United States needs to do more to aggressively develop its own resources.

"If we don't get going on it, China's already moving. He who hesitates has lost," Hoeven told Reuters.

Hoeven's bill mirrors what the Republican-controlled House of Representatives has already passed, but the legislation will face an uphill battle in the Democratic-controlled Senate.

Hoeven said he believes the CNOOC-Nexen deal is a "direct result" of President Barack Obama's January decision to delay approval of the Keystone XL pipeline, designed to bring oil from Canada's oilsands to Texas refineries.

Obama said a portion of TransCanada's pipeline needed more environmental review. Weeks later, Prime Minister Stephen Harper said Canada needed to explore more opportunities to sell oil to China.

"This is really a direct result of the administration's resistance to Keystone," Hoeven said. Hoeven represents North Dakota, where oil production is booming. The pipeline would carry some of that oil to southern refineries.

His proposed legislation would approve the pipeline, and make more federal land and offshore areas available for drilling. It would also simplify the permitting process for energy projects.

"The United States better work with Canada on Keystone and related efforts to develop the oilsands so that oil comes here. If that doesn't happen, it's going to China," he said.

(Editing by Leslie Gevirtz)

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Comments (3)
justinolcb wrote:
Obama will never sign an energy bill unless it gives free money to people who helped get him elected

Jul 24, 2012 8:01pm EDT  --  Report as abuse
lakshmanan_p wrote:
Taking the sluggish approach of the US in dealing with Canadian Oil, We could safely conclude that Oil reserves of the world would last longer than the earlier estimates. New discovery of oil in South America and gas in Australia strengthen this view.

Jul 24, 2012 8:25pm EDT  --  Report as abuse
breezinthru wrote:
The pipeline would be a good idea but only a moron would suggest that more US drilling is going to have any impact on China’s oil ambitions or anything more a temporary impact on US energy needs.

The US has oil but it isn’t as though we will suddenly discover oil reserves rivaling Canada’s oil sands or rivaling the reserves of the Middle East if we just put enough holes in the ground.

While we are using up everyone else’s oil, we should be trying to figure how we are going to meet our energy needs when their oil is gone.

Jul 25, 2012 7:41am EDT  --  Report as abuse
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