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January
14
2024
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Trudeau's Exit Sparks Oil Industry Optimism in Canada
Alberta’s Premier Danielle Smith stated, “[It] aligns with Enbridge's plans to enhance its existing pipeline systems, and we look forward to partnering with them to enhance cross-border transport solutions. This will also allow us to play a role in supporting the United States in its energy security and affordability goals.” The group’s work is also expected to improve bureaucratic procedures and streamline regulations and permitting approvals for Enbridge and other companies. “We're prepared – and exceptionally well-positioned – to work with producers and governments to deliver capacity as production ramps up, providing cost-effective, scalable, executable solutions now and through the decade that support North American energy security, reliability and affordability,” Enbridge’s CEO Greg Ebel stated. At the beginning of 2024, Smith outlined plans to double Alberta’s oil and gas production. “America has become the largest producer of oil and gas for export…while all the politicians have said they’re going in the opposite direction,” Smith said. “I think we should just double down and decide we’re going to double our oil and gas production because truly, where else does America want to get its oil from?” she added. Smith emphasized this month that the U.S. produces 13 million bpd of oil and consumes 20 million. The U.S. has long relied on its North American neighbor to provide this additional crude. However, President-elect Donald Trump has stated his intention to impose new 25 percent tariffs on Canadian imports once in office. This is aimed at encouraging U.S. companies to produce more oil and gas domestically and reduce the country’s reliance on foreign powers. The premier is currently in talks with several pipeline companies to encourage greater expansion in the oil and gas industry in the coming years. Smith expects the expansion of pipelines to support the anticipated growth in Alberta’s oil and gas production in the coming years, providing market access to safeguard the province’s oil export potential. Washington has recently increased its imports of Canadian crude thanks to the launch of a newly expanded tanker terminal just across the border near Vancouver. The increased shipments of Canadian oil to the U.S. state have displaced imports from Latin America according to recent reports. The Trans Mountain Expansion (TMX) pipeline and pier project came online in May last year, tripling its capacity and increasing U.S. oil imports from Canada. The project was aimed at enhancing export routes from land-locked Alberta establishing a connection with Vancouver harbour. The U.S. Energy Information Administration stated, “Since TMX came online in May, early data indicate that refiners on the U.S. West Coast have been key buyers of the new export volumes. Between June and September, the U.S. West Coast accounted for just over half of all maritime crude oil exports out of Western Canada, with the rest going to destinations in Asia.” This week, Canadian oil and gas stocks rose following news of Prime Minister Justin Trudeau's resignation. Trudeau’s government was often seen as being at odds with Canada’s oil industry and the Alberta government, as the Prime Minister pursued a green transition. The introduction of several climate pledges in recent years and support for more renewable energy projects made Alberta’s oil outlook look increasingly uncertain. In 2023, Alberta’s government introduced a seven-month moratorium on green energy projects, to focus on agricultural growth. Smith said the government would be putting “agriculture first”, as well as restricting the development of renewable energy projects. The move was heavily criticized by environmentalists who said the government’s decision had little to do with environmental concerns and more to do with the desire to continue bringing in oil and gas revenues. This is just one of the examples in which Alberta’s policies did not align with overarching federal aims for a green transition. While Trudeau’s Liberal Party of Canada will remain in office under a new leader – who has yet to be chosen – the next federal election must take place by October. This means that the future of Canada’s oil and gas will largely lie in the hands of the new government, although Alberta is expected to continue staunchly supporting the expansion of the province’s oil and gas industry in the coming years. By Felicity Bradstock for Oilprice.com
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Canada is expected to continue growing as an oil power in the coming years as the Alberta government signs new expansion deals, a new tanker terminal is opened in Vancouver, and Prime Minister Justin Trudeau resigns. The government of the major oil-producing province of Alberta signed a new agreement with Calgary-based pipeline company Enbridge this January aimed at increasing oil exports to the U.S. The deal will establish a working group with the Alberta Petroleum Marketing Commission (APMC), which will be tasked with evaluating future egress, transport, storage, terminaling, and market access opportunities. The team will support plans to increase Alberta’s oil production in line with Enbridge’s planned pipeline expansion projects. 