Friday, November 30, 2007

We Welcome Our New Overlords From Asia

by Rob Cornelius from The State Journal (US: West Virginia)

The next few decades will be about what folks are calling resource nationalism ... the sort of issues that used to result in an occasional war. As much coal for steel as West Virginia sells to Asia, what's to keep a big foreign government from throwing down a paltry few billion dollars to snap up Consol (CNX) or the newly formed Patriot Coal (PCX). In the long term, even the most expensive to operate union mines in Appalachia will seem like a bargain to someone whose national energy need is great enough. Understand that the biggest oil and energy companies on Earth aren't really Exxon (XOM) or Marathon (MRO), but state owned and run entities like Saudi Aramco, PetroChina (PTR) and Russia's Gazprom (OGZPF). They aren't necessarily as concerned about short-term profit as long-term economic development and nation-building of their own. America is more concerned about taxing big oil, while other governments are doing their best to acquire it and subsidize the costs for their own citizens ... It's already being done in small doses. The Chinese and Saudis have bought into western Canadian energy companies like Husky and would love to lock up a long term spot in the oil sands there. It was thought last week the Chinese might make a run at Rio Tinto (RTP), one of the largest iron and aluminum producers in the world and the second biggest miner of western coal in the U.S.

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