Sino-Canadian energy cooperation has increased since last decade. Enbridge Inc., the Canada’s second largest pipeline company, currently offers a Chinese company a 49% stake in a 1,160 kilometre pipeline planned between northern Alberta and the Pacific coast of British Columbia (Jiang, 8). In January 2005, Prime Minister Paul Martin signed Sino-Canada Statement on Energy Cooperation in the 21st Century (Jiang, 1), and the current Prime Minister, Steven Harper, went to Beijing on Nov 3rd, 2009. This shows a willingness of cooperation in energy field between the two countries.
However, because Canada’s economy is highly depended on the U.S., the Chinese new oil consumption market could not be simply considered by Canada in a Liberalism theory. Any major energy cooperation between China and Canada will be closely watched by the U.S. There is an assumption that China is becoming the main competitor of oil from Canada at the expense of the U.S. It is a traditional zero-game thought, so anything good for China is not good for the U.S. Canada does not want to ruin the relationship with the U.S. even though there is a huge potential oil market in China. Should Canada diversify its own energy market or just keep maintain the U.S. market after the current financial crisis, let us see Russia’s case before make a decision.
II. Russia Case Study
In energy trade field, Russia, as one of largest energy producers and exporters, has very similar situation with Canada in energy exports. Both countries are rich in energy resources and energy exports share significant part of their economic growth. Canada has largest stable and largest energy consumer—U.S. while Russia has the second largest energy market—European countries. Before global financial crisis happened, energy trade is one of the main reasons driving their economy growth.
Russia’s energy security depends largely on the global demand and international energy market price. Thus, Russian energy security is vulnerable to market forces and benefits from economic stability, particularly that of the European countries, with whom Russia conducts the majority of its energy trade. Let us...