But China is so serious about locking down any oil supply it can grab that it is offering a 61% premium for the company. China consumes a staggering 10 million barrels of oil a day, and demand is expected to jump 50% by the end of this decade. More importantly, by 2035, China will become the largest oil consumer and it is desperate to secure North American reserves to meet its future needs.
Over the past decade, the Chinese government has struggled mightily for a foothold in the U.S. oil and natural gas market. In 2005, CNOOC sought to purchase California-based Unocal for nearly $20 billion, but national security concerns thwarted the deal. That hasn’t stopped the Chinese from trying. Over the years, China has snatched up partial oil and natural gas holdings in Colorado, Wyoming and Texas through a pact with Chesapeake Energy Corporation. In 2009, China purchased minority stakes in some leases and deep-water wells in the Gulf of Mexico from Statoil ASA and Nexen. And more recently, China has purchased a one-third interest from Devon Energy for holdings in Louisiana, Michigan, Ohio and Oklahoma.
With the purchase of Nexen, China will control a major North American oil company. China will firmly be positioned in our front and backyard.
There is a simple way for the United States to maintain control of our energy future and our competitive edge over the Chinese: We can get moving quickly on the Keystone XL pipeline. Approving this pipeline would ensure that North Americans control North American oil. This is why I am very disappointed that President Obama has not allowed Keystone to move forward.
The president could immediately approve the application before the State Department, which would allow construction of the Keystone pipeline to begin as soon as possible. But it seems he would rather wait until after the election before making this strategically important decision.
I introduced the first bill in Congress to allow the construction of the Keystone pipeline in April of 2011. And since that introduction, the House of Representatives has passed that authorization six times. Unfortunately, the Senate has refused to take up my bill and refused to put the president on record on this important piece of legislation.
Keystone not only represents thousands and thousands of jobs for skilled Americans and a major boost to the surrounding communities. It ensures that the U.S. and Canada remain partners in the operation and maintenance of North American oil. And it also ensures that North Americans will be in control of North American oil. We will have control of our own energy security.
The bulk of the crude oil pumping through the Keystone pipeline will be from Canadian reserves but it will also be used to move oil from the Bakken reserves down to refineries on the Gulf coast. At this time, the crude oil from these reserves is transported along our nation’s highway and railroad systems. The pipeline would allow these states to move the oil faster, more efficiently and in a more environmentally friendly manner.
The president and Senator Reid understand the need for Keystone. They know that Canada must have approval for the pipeline to ensure that our energy partnership remains intact. Unfortunately, Senator Reid has refused to allow a substantive debate on the merits of a Keystone bill so the full Senate may make a well-informed vote. Yet, the president has given his blessing to the southern portion of the pipeline from Cushing, Oklahoma to Port Arthur, Texas, now called the Gulf Coast Project, touting its economic and energy benefits to the surrounding communities.
However, the president’s public support stops there. He has instead chosen to placate interest groups by stalling approval of the northern portion of the pipeline with repetitive studies. Can we blame Canada for meeting with outside buyers while the president and Senator Reid continue to play political games and hold North American oil hostage to election slogans? Of course not. Now is the time to show our commitment to our neighbor to the north and our own energy security by moving forward with the construction of the Keystone pipeline.
Terry serves the people of Nebraska's 2nd District. He is a member of the House Energy and Commerce Committee and has been a leading supporter of the Keystone XL Pipeline.