Adding to the growing Western paranoia regarding China’s bold energy plays internationally, the northern Alberta, Canada oil sand deposits are now receiving hundreds of millions of dollars for development from the Chinese government, according to a report in Monday’s Los Angeles Times, citing growing concerns in the Bush Administration, which is monitoring the situation closely.

While reluctant to be publicly telling other nations where they should invest, U.S. Energy Department officials quoted by the LA Times raised the rhetorical question about whether the Chinese heavy investment in the western Canadian energy market is good for the North American energy market overall? Ultimately, the officials admit it is up to the Canadian government to decide how far they want to go in accepting more investment from China in the Canadian domestic energy sector.

“Today, Canada provides 17% of the U.S. oil imports; 16% of its natural gas; and virtually all of the imported hydroelectricity coming into the United States,” according to the report in the Times‘ business section. It noted that in the last two months, China’s three largest oil firms have announced deals in Alberta, including a 40% stake in a $3.6 billion pipeline project.

China’s increased interest has added to a boom that began three years ago in and around Fort McMurray, Alberta in oil sands development.

The Times reported analysts’ conclusions are the Chinese investment will speed up development of the oil sands, meaning increased imports for the United States as well as China. “Although the Canadian government owns the vast majority of the country’s energy resources, more than half of Alberta’s oil deposits are being developed by U.S.-based firms, including Chevron Corp., Exxon Mobil Corp. and Devon Energy,” the newspaper reported.

Speculation among some sources cited in the report is that the Canadian government will use the growing Chinese interest to leverage more investment from U.S. firms and the U.S. government.

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