Wednesday, September 02, 2009

 

Basi Virk hearing Sept 2, 2009. Also: PetroChina and the Triads

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While waiting for news from Madam Justice Elizabeth Bennett's courtroom today, I thought readers might like to consider the following two news reports. They aren't precisely on our topic of BC Rail. But I am mindful of the fact that police were tracking a suspected "Mr Big" of West Coast organized crime when they raided the BC Legislature. And mindful, too, that William Elliott, head of the RCMP, declared in a recent talk before the Vancouver Board of Trade that there are 900 identifiable crime groups in Canada. Within that 900, there are 135 Organized Crime Groups in British Columbia. With that background ... consider these two commentaries ... and you may wonder, as I did when reading the first article, why everybody seemed so happy about this development:

PetroChina takes $1.9-billion stake in oil sands
Carrie Tait
Financial Post - August 31, 2009
National Post - September 1, 2009

CALGARY -- China, using its significant financial firepower, snapped up majority stakes in two oil sands projects Monday in a way illustrates the energy-hungry country's strategy to convince Canada it can be a palatable and necessary partner in the huge crude reserves buried in northern Alberta.

PetroChina International Investment Co. Ltd. has struck a deal to buy a 60% interest in Athabasca Oil Sands Corp.'s MacKay River and Dover projects for $1.9-billion, as well as other financing arrangements.

This marks a significant move for China in the enormous reserves, and gives the country -- of which many in the oilpatch are still wary -- the chance to prove it can be a non-threatening partner.

"China's strategy is to take bite-sized portions initially to get an understanding of [Canada's] business practices... [and] to give the government a sense China will be a good corporate citizen," said Mike Percy, dean of University of Alberta School of Business, who Monday returned to Canada from a business trip in China. "By taking over a private company, it gives you the platform to demonstrate you respect existing rules and regulations."

Ottawa has hinted it will exercise its power to protect Canadian resources should foreign companies try to take over assets important to the country's security. Bill Gallacher, chairman of AOSC, said while his company gave the provincial and federal governments a heads-up that a deal was on the way, he is unsure which regulatory hurdles have to be cleared.

"We know there will be some [regulatory approvals needed], but we just don't know which ones," he said.

PetroChina's 60% interest is only in the AOSC's MacKay River and Dover projects, not the entire privately held company. PetroChina's stake translates into it controlling roughly three billion barrels of recoverable bitumen, the tar-like mix of crude and sand that is processed into useable products such as gasoline and jet fuel. AOSC, therefore, is left with about seven billion barrels of recoverable bitumen. The Calgary-based company will continue on as the projects' operator.

AOSC, which expects the MacKay River project to hit commercial production in 2014, originally planed to sell up to 50% interest in the two projects, but PetroChina wanted a larger stake.

"This is a very bullish partner," said Sveinung Svarte, AOSC's chief executive. "It wants to make sure development will happen, and access large resources worldwide."

The two projects will need roughly $15-billion to $20-billion in investment to get to production of about 300,000 and 500,000 barrels per day, Mr. Gallacher said. Further, the projects will need "sustainability capex, which will probably be a multiple of that."

But the PetroChina deal gives AOSC the cash it needs to fund the in-situ projects. The AOSC's business plan is now financed "in perpetuity," Mr. Gallacher said.

Eric Newell, who led Syncrude Canada Ltd. for 14 years, welcomed the news because it comes with cash as well as brainpower, but he said he remains nervous about China owning significant stakes in the oil sands.

"I don't see anything sinister in [China] buying up pieces of it, because they have ownership in oil and gas all over the world, and that's fine," he said in an interview. "But my concern would go to if they actually owned to the extent we were not able to control the development of our own resource."

PetroChina is also trying to buy Verenex Energy Inc., a publically traded company with assets in Libya. The Chinese energy giant, however, is being stymied by the Libyan government, which has the ability to trump any Verenex suitors. In the oil sands, Sinopec owns a 50% stake in a project controlled by France's Total SA, and CNOOC Ltd. paid $150-million for a 16.6% stake in MEG Energy Corp. in 2005.

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Now for today's Vancouver Sun:


Events suggest Communists, triad criminal gangs intertwined

BY JONATHAN MANTHORPE,
VANCOUVER SUN - SEPTEMBER 2, 2009


The relationship between China's triad criminal gangs and the Communist Party, as well as the Kuomintang Nationalist Party government before it, has always been ambivalent at best and, at worst, as close as teeth and gums.

But a recent crackdown against crime and corruption in China's far western city of Chongqing -- the world's largest conurbation with 32 million people -- in addition to organized protests against the Dalai Lama's visit to Taiwan this week suggest the relationship between the triads and the party is now intertwined.

It is a matter of critical concern for the men at the pinnacle of power in Beijing as the 60th anniversary approaches on Oct. 1 of the Communist Party's seizing of power from the Kuomintang (KMT) in 1949.

Four generations after Mao Zedong and his comrades stood on the balcony of the Tiananmen Gate in Beijing and proclaimed that "The Chinese people have stood up," far too many millions of them find their daily lives tormented by corrupt party and government officials.

Current President Hu Jintao and Premier Wen Jiabao are well aware of the threat this poses to the continued power of the Communist Party.

A recent article in the official magazine Outlook Weekly said Communist Party authorities are "clearly aware that corruption among cadres has seriously affected the party's image and is the phenomenon with which the masses are most dissatisfied."

The policy until now of regularly arresting, trying and shooting often quite senior party officials has failed to curb corruption.

The full-blown anti-corruption drive in Chongqing, which has provincial status and whose governor is the charismatic, but not entirely trusted party "princeling" Bo Xilai, is a new ploy. But it is unlikely that Beijing anticipated what would come scurrying out when police started overturning stones.

Since the campaign started in June, more than 1,500 people have been arrested, including 67 triad gang bosses, three of the city's best known billionaires, and 50 government officials and police officers.

The most prominent detainee is Wen Qiang, director of Chongqing's justice bureau and a former deputy chief of police.

But the marriage between the triad gangs and the Communist Party was most clearly seen among several of the gang bosses who were also members of municipal or provincial legislatures or local branches of the influential advisory body, the Chinese People's Political Consultative Conference.

One of the snapshots the Chongqing campaign has revealed is just how much corrupt Communist Party officials and their "princeling" relatives who control most business sectors in China have come to use triad expertise for such things as money laundering.

A 2006 study by several Chinese research institutes found that 90 per cent of the country's billionaires are the children of high-ranking officials. The list even encompasses the son of President Hu, Hu Haifeng, who is being investigated in Namibia because of questions about a lucrative contract won last year by a company he controls as head of Tsinghua Holdings.

The extent to which the princelings are tied in with the triads remains at question. But the evidence from Chongqing suggests it is more fundamental than was indicated by former premier Zhu Rongji, who in 1996 called the triads simply a "patriotic organization."

And even though triads abandoned the nationalist heroism of the monks of Shaolin in favour of crime hundreds of years ago, they retain a patriotic zeal.

On Monday this was seen in southern Taiwan where a few -- but vigorous -- demonstrators protested the visit of the Dalai Lama to comfort victims of Typhoon Morakot a month ago.

On Tuesday Chang An-le, the allegedly ex-leader of the Bamboo Union triad, told a Chinese television station with great pride that he had organized the protests against the Tibetan spiritual leader, whom he and the Beijing government accuse of seeking independence for the Himalayan territory.

Chang is in exile in China, where he was born, after organizing the murder of dissident Taiwanese writer Henry Liu in California in 1984 on behalf of the KMT.

Chang spent 10 years in prison in the U.S. for drug trafficking, kidnapping and attempted extortion and was deported back to Taiwan in 1995. But he fled to China to avoid a probe into triads in Taiwan the following year.

jmanthorpe@vancouversun.com

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Anything I've seen about China investing in Canada talks up Big Worries About Communism. It's only now -- seemingly by co-incidence, in two separate news streams -- the Triad connection is made. And if you ask me, any prospect of the ultimate down-and-dirty criminals of the Triads taking up decision-making positions in Fort McMurray oil extraction, etc. makes for a supreme horror story.

As you know, the police were tracking Organized Crime in the person of the suspected West Coast "Mr Big" - Jasmohan Singh Bains - when they raided the BC Legislature; and when Bains went on trial in Victoria in June 2008 not a word appeared in the mainstream media. I broke the story in Dec. 2008, and from that clue, Ian Mulgrew, Vancouver Sun, Feb 17, 2009 wrote the only mention of it in Big Media. If you turn this over in your mind, I think you will see some worrying connections as to what news is suppressed ... and what isn't.

Please bear with me in exploring two other major news reports of the type which sometimes slide unremarked by most of us ... but given our current levels of crime and globalization, have a look at these:

China's bold move into the Oil Sands
The Globe and Mail - Sept. 1, 2009

Excerpt:

" ... The deal does not commit the company to delivering oil to the Chinese, he added. "At the end of the day, there was nothing tied in terms of transporting or pipelining. This was just strictly an energy venture that PetroChina identified that had very high quality, and had a great management team that can move this forward in a timely manner " ...

See also, under Globe and Mail Analysis:
Ottawa guidelines to get first test [for state-owned companies looking to invest in Canada]

PetroChina's $1.9-billion investment in Athabasca Oil Sands is not expected to meet much resistance ...


See also:

China's bold move into the oil sands
Shawn McCarthy
Globe and Mail Update - Aug. 31, 2009

When Ottawa acted in late 2007 to erect a new screen for state-owned companies looking to invest in Canada, the clear target was an expansionist China, whose ravenous resource companies were gobbling up assets around the globe.

But that was before the great thaw.

Putting behind it three years of frosty relations, the Harper government this year has sent a parade of senior ministers to Beijing with the express intent of luring Chinese investment to this country.

The message appears to have been received. PetroChina Co. Ltd.'s (PTR-N110.370.730.67%) $1.9-billion investment in Athabasca Oil SandsCorp.'s development projects represents the first large Chinese investment in the Canadian oil sands – and the first major test of the new federal guidelines for state-owned enterprises, which lay down a series of factors Ottawa will consider when reviewing an investment from such a company.

Despite some concerns about PetroChina's ultimate control resting in the hands of senior mandarins of China's ruling Communist Party, the company will likely face little opposition from the federal government on this deal. ...

It remains unclear how the U.S. government would view a growing Chinese presence in the oil sands.

When it approved construction of a pipeline to bring oil sands bitumen to American markets, the U.S. State Department said in was in that country's strategic interest to have a secure source of oil supply from Canada.

Former U.S. vice-president Dick Cheney had said it would not be in the U.S. interest to see a major Chinese presence in Alberta. But President Barack Obama's administration has so far been silent on the issue ...
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Another factor in this changing scene comes from the Gulf of Mexico:

Exploring far afield in Gulf of Mexico, BP announces 'giant' oil discovery
By Shawn McCarthy, Global Energy Reporter, Ottawa

Click HERE for the full story.

Excerpt:

British Petroleum PLC, the largest oil producer in the Gulf of Mexico, said yesterday it had made a major discovery at its Tiber project, a find that could rival the biggest producers in the region ...

With the shallow waters of the Gulf well-explored, oil companies have been moving into deeper water ... [the Tiber discovery] in 1,259 metres of water, with a total well depth of 10,685 metres, BP believes is the deepest oil well ever drilled ... as deep as Mount Everest is high, and only 400 km offshore from Houston ...


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And finally:

Keep China Out Of the Oilsands
Calgary Herald - Sept. 5, 2009
Times Colonist, Sept. 7, 2009

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If you ask me (and I know that you didn't ask me), I believe we are in the midst of an awesome battle. We're in a virtual war for our own sovereignty with which to preserve and protect ... well, clean drinking water, for one thing. Clean air. Fish. Or, stated another way: our rivers and oceans. Our stuff. These are basic issues of life or death sovereignty and at present we're not winning.

Organized Crime isn't sitting quietly on the sidelines. So I believe that the BC Rail Trial may be our coming of age ... a baby-step, if you will ... on reclaiming our province. It's important to figure out how we can deal with this mess ... and if we fumble and fail the BC Rail test ... how confident would we be "going forward" in this Mad Max future?

Just a few thoughts, while awaiting news from Madam Justice Bennett's courtroom. - BC Mary.

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Greenpeace protesters seize equipment at oilsands site

Edmonton Journal - Sept. 15, 2009

Read about the largest industrial project on the planet HERE.

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Comments:
Tar Sands oil is a hard sell in the US, thus, the Chinese market - which would be served through Prince Rupert - is welcome.

Of interest is the arrest of Ontario's former Attorney General. Prosecutors sandbagged a major cop corruption case there. We'll see what happens to the man who de-politicized Justice of the Peace appointments, to remove cop control of the process.

http://www.thestar.com/article/689220
 
That's what puzzles me, Anon 11:01 ...

how can Team Triad be so welcome?

The unfortunate Toronto traffic accident involving a vehicle driven by Bryant and a bike ridden by a courier is a long, long way down the food-chain from the possibilities when Triads are being welcomed into the upper echelons of government and bi'ness here.

Distraction alert.
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BC Mary:
We have a near $3 billion deficit because of the reduction of US imports after 8 years of bad financial regulation under the Bush circus. We can't afford to wait for US market correction. Prince Rupert and BC need oil port revenue; the Chinese could do for oil what the Japanese did for our coal industry. I think the "triads" were a Hong Kong phenomenon; convicts of economic crimes are executed in stadiums in China, and families are sent a bill for the bullets used.

As for the Bryant prosecution, he was unpopular with police services, thus, scrutiny is warranted. Unlike BC, Ontario cops are allowed to register charges; here that can only be done by prosecutors. I don't like the smell of undue influence, wherever it comes from. Let's see how long Ontario takes to decide: who did what? BC justice is an embarassment.
 
Somehow I think that Alberta would be in the same position as Madhya Pradesh with regard to the heavy pollution resulting from the continued extraction of oil from tar sands.

Remember Bhopal:

On December 3, 1984, at least 27 tons of methyl isocyanate gas leaked from a pesticide plant in Bhopal (23°17’ North, 77°28’ East), in the state of Madhya Pradesh, India, immediately killing at least 3,800 people and causing significant morbidity and premature death for many thousands more. The Bhopal plant was owned and operated by Union Carbide India, Limited (UCIL), an Indian company in which Union Carbide Corporation (UCC) held just over half the stock. The company involved in what became the worst industrial accident in history immediately tried to dissociate itself from legal responsibility. Eventually it reached a settlement with the Indian Government through mediation of that country's Supreme Court and accepted moral responsibility. It paid $470 million in compensation, a relatively small amount based on significant underestimations of the long-term health consequences of exposure and the number of people exposed. The disaster indicated a need for enforceable international standards for environmental safety, preventative strategies to avoid similar accidents and industrial disaster preparedness.
- From The Encyclopedia of Earth.

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The entire Gateway program is premised on the illusion we deserve more trade with China. Fill our stores with gotta-have high priced clothing that falls apart, shoes that crumble,food that aren't allowed in the US etc. We should be going after a policy that restores Canada's manufacturing plants and jobs. If this oil deal with China is allowed to proceed watch for more accidents like the Exxon Valdez.
The triads from China are here and may date back to 1986. Some of you uninformed folks should read Kim Bolan's blog. The Real Scoop in the Sun.
News is suppressed if Canwest decides it wants to do so...to continue their support for the neocon right wing Bush follower named Harper. More corruption here but that's another story.
 
With the Chinese. The way I have it figured, the incredibly greedy criminal schemes of the banks and their sub prime mortgages will, in time, make the value of the US currency worthless. The only way this debt can be repaid is by running the printing presses.

The US has been on a spending spree and it has been financed by the Chinese. The Chinese are not dumb and are playing "hot potato" with the money which they receive and spend it on purchasing assets all over the world with US dollars.

The idea is to dump as many of them in purchasing assets from the world. They own and control these assets.

The poor dumb suckers in Canada and elsewhere have all these US dollars and they will become worthless in time.

Good play for them.
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If you think the pollution of the Athabasca and waste of natural gas to thaw out the oil sands is stupid, read "Stupid to the Last Drop" by William Marsden. Especially charming is the proposal to use nuclear devices to extract the petroleum from the goo. Believe it or not this was patented by the US government in 1973.

"The U.S. government, represented by the Secretary of the Navy applied for and, on September 4, 1973, received from the Canadian Intellectual Office patent number CA 933087 for a "Nuclear Explosive Method for Stimulating Hydrocarbon Production from Petroliferous Formations [oil sands].

As the author comments if Alberta ever "green lights its own nuking" the USA holds the patent.

In spite of test blasts in Nevada during the fifties that indicated radioactive containment was unsuccessful - the results of these tests were with held from the Canadian and Alberta governments and arrangements were being made to buy (for $350,000) a bomb from the US and transport it to an airstrip at Chard, Alberta for transport to a test hole at Pony Creek for detonation. Transporting the bomb by rail was considered too slow and expensive, and ONLY in case of an air crash could the bomb be accidentally detonated, it was felt.

"The prospect of turning the oil sands into a viable commecial operation was too enticing to worry about the environmental effects, such as possible radiation leakage, accidental bomb detonation or what was called "tired mountain syndrome" -- the possibility that the earth could simply collapse under the strain of repeated subsurface nuclear explosions" At the time it was estimated that it would require approximately 1,000,000 (yes Mary, that's ONE MILLION) nuclear blasts (of approximately 10 megatons each) to recover an estimated two trillion barrels of oil from honeycombing Northern Alberta with - the risk of Alberta caving in down the road was a minor inconvenience compared to profit as was glowing in the dark.
 
Koot,

Three kisses on top of your handsome head for the astonishing spadework you have done,

and for letting us peer over your shoulder to see what you found.

Many thanks indeed ... and now

Holy cats, my feet are spinning ... which way do I send my protest?

There's a Canadian agency reviewing the PetroChina offer ...
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I want to correct an error in my previous comment regarding the once almost implemented nuking of Alberta - and I've learned that ideas like these never truly seem to die.

I got a bit confused with my metrics, not unusual for a non-drug dealer that grew up learning US pounds/gallons and then had to learn Imperial and THEN metric.

Anyway the first test bomb was going to be 9 KILO-TONS not mega-tons as I inadvertantly typed above. To put this in context the bomb over Nagasaki in WWII was about 20 kilotons and Hiroshima was about 13. Those who were promoting this method thought that if things went well (however one decides that - by the color of the glow of Fort Chip?) blasts of 100 kilotons were being considered for some of the following 999,999 blasts that might be required to liberate the oil from the sand.

The damage being done to the aquifers and wells throughout Alberta by non-nuclear means of "fracking" in coal bed methane development and to come with fracking shale bed methane is bad enough. However the government sides with the industry and so far is trying to blame ranchers for poor well maintenance and bio-genic causes for the fact many ranchers can light their tap water with a match and even the cattle won't drink it if they have a choice.

The samples of well water (from wells that served ranchers for over fifty years just fine until the CBM (coal bed methane) drilling proved to be a chemical soup of 58 petroleum pollutants including pentane, propane, butane, pentene, octane, hexane, toluene, styrene, tetrachloroethylene and benzene. But according to the government of Alberta and the INDUSTRY funded environmental watchdogs, these are the result of bacteria in badly managed wells.

I'm gonna forget I have a vocabulary and just use one word - BULLSHIT!

Perhaps BC should start building a wall between Alberta and BC like the one in Israel/Palestine or on the US-Mexican border because everybody in Alberta will have to go somewhere, no matter how much money they've got, when there is no water to drink! I could live without oil, or with much less, but water..............
 
KOOTCOOT. AGREED!
 
Amen Kootcoot - well said!
 
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