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Global Investment in the West

By John McChesney, Director of the Rural West Initiative

Asia’s insatiable appetite for energy is beginning to gnaw into the American West’s huge cache of carbon. China’s energy giant, the Chinese National Offshore Oil Corporation, having learned the hard way, is just nibbling right now. In 2005 it tried to take a large bite by bidding $18.5 billion for Unocal and stirred up a congressional hornet’s nest. Recently CNOOC invested a modest $1.3 billion in Chesapeake Energy, which is drilling on the Niobrara, a shale oil field that spreads across sections of Wyoming, Colorado and Kansas.

CNOOC invested another billion in Chesapeake’s Texas operation. Both plays involve shale oil, and China is looking to acquire the technology to exploit its own large deposits. Experts expect China to make more investments, but to keep them small enough to avoid arousing national security hawks.

China’s not just an investor; it’s an energy customer as well. Witness the plans to ship Wyoming’s Powder River Basin across the West by train and barge and then by freighter to China.

China’s not alone, of course. Even the Estonians are getting into the game, with Enefit buying a company that holds rights to 30,000 acres of shale oil leases in Utah. And let’s not leave out the British, the Dutch, and the Canadians—especially the Canadians who are drilling like crazy in North Dakota. Then there’s Russian ownership of uranium mining and Chinese investments in molybdenum mining. The list could go on.

The West has long been a natural resource colony, and some will say there’s nothing new about what’s going on today. They may be right, but with the arousal of India and China, it’s unlikely that we will see their appetite for carbon diminish anytime soon. And that could change the economy and the landscape of the region.

In partnership with High Country News, we intend to take a closer look and place today’s boom in a broad and deep historical context.

Last modified Wed, 13 Apr, 2011 at 11:22