‘Retaliatory pipelines’: Push to export crude away from U.S. intensifies amid tariffs

Canada’s Energy Sector Faces a Critical Crossroads Amid U.S. Tariffs

The imposition of a 10% tariff on Canadian energy imports by U.S. President Donald Trump has intensified calls for Canada to diversify its oil and natural gas exports beyond the United States. This move has sparked widespread concern within Canada’s energy sector, with industry leaders and policymakers urging immediate action to address the crisis. The Explorers and Producers Association of Canada underscored the urgency, stating that the situation highlights the need for bold infrastructure development to reduce reliance on the U.S. market and expand into international markets. By building retaliatory pipelines and diversifying export routes, Canada can strengthen its economic resilience and global influence.

Industry Leaders Call for Urgent Policy Reforms

Lisa Baiton, president and CEO of the Canadian Association of Petroleum Producers (CAPP), emphasized the need for a dramatic overhaul of Canada’s energy policies to enable viable projects that have been stalled due to regulatory hurdles. Baiton argued that expanding exports to Asia and Europe would not only provide long-term economic stability but also ensure energy security for provinces like Ontario and Quebec. She stressed that Canada is at a pivotal moment in its history, with the choices made today determining whether the nation will emerge as a global energy leader or fall behind in an increasingly competitive market.

Alberta Premier Advocates for Diversifying Export Markets

Alberta Premier Danielle Smith highlighted Alberta’s vast petroleum reserves, noting that while the province had previously aimed to double oil exports to the U.S., the new tariffs have forced a shift in strategy. Smith expressed confidence that global demand for Canadian energy products remains strong, suggesting that Alberta could explore new markets, including those on the West Coast, East Coast, and northern regions. She emphasized that if the U.S. is no longer interested in Canadian oil, the rest of the world is eager to fill the gap. This sentiment reflects a broader recognition within the industry that diversification is no longer optional but imperative.

Enbridge CEO Downplays Short-Term Impact but Acknowledges Long-Term Challenges

Greg Ebel, CEO of Enbridge Inc., one of the largest pipeline operators transporting Canadian crude to the U.S., offered a more measured perspective on the tariffs. While acknowledging the potential for long-term disruptions, Ebel noted that the company’s near-term strategy remains unaffected due to the integrated nature of the U.S.-Canada energy system. Enbridge currently transports nearly 30% of North America’s crude oil, with a significant portion destined for U.S. markets. Ebel emphasized that the economic interdependence between the two nations makes it challenging to alter trade patterns in the short term. However, he did not rule out the possibility of future shifts if the tariffs persist, though he noted that significant legislative changes in Canada would be required to pursue new infrastructure projects, such as the previously abandoned Northern Gateway pipeline.

U.S. Consumers Likely to Feel the Pinch at the Pump

The tariffs are expected to have a direct impact on U.S. consumers, particularly in the northeastern region, where much of the fuel supply comes from the Irving Oil refinery in Saint John, New Brunswick. According to GasBuddy’s Patrick De Haan, fuel prices in the Northeast could rise by 20-40 cents per gallon by mid-March 2025, adding an extra $3-$6 to the cost of a typical 15-gallon fill-up. De Haan explained that U.S. refineries are heavily reliant on Canadian heavy crude and would face significant challenges in transitioning to lighter domestic alternatives, further compounding the price increases.

The Road Ahead: Challenges and Opportunities

The current trade dispute has brought into sharp focus the vulnerabilities of Canada’s energy sector and the need for strategic diversification. While the immediate impact of the tariffs may be limited, the longer-term implications for both Canada and the U.S. are significant. Industry leaders are calling for bold action, including infrastructure investments and policy reforms, to unlock new markets and ensure energy security. However, the path forward is fraught with challenges, from environmental opposition to legislative hurdles. As Canada navigates this critical juncture, the choices it makes will shape not only its energy future but also its position on the global stage. © 2025 The Canadian Press