The Battle for Canada's Underground Wealth

U.S. officials hope the output from Alberta's oil sands will be exported mainly south of the border, but Chinese officials are trying to lock up long-term contracts for oil, estimated to rival that of Saudi Arabia.

Published: 24-Mar-2005

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While Congress debates whether to allow oil and gas drilling in Alaska's Arctic National Wildlife Refuge, a similar battle with much higher stakes is under way in northwest Canada.

The $6 billion Mackenzie Pipeline project would open the Canadian Arctic for natural gas drilling and send the gas 800 miles south down the Mackenzie River Valley to Alberta. There, much of this fuel would be used to throttle up production in a huge but hard-to-tap supply of petroleum dispersed in underground gravel formations. These so-called oil sands hold petroleum reserves that are second in size only to Saudi Arabia's, and analysts say they could supply a large portion of U.S. energy needs for decades to come.

But the project has sparked opposition from some native tribal groups, which call it a federal grab of their ancestral lands, and from environmentalists, who say it would churn out greenhouse gases linked to global warming.

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