{"id":54598,"date":"2025-01-02T11:00:59","date_gmt":"2025-01-02T11:00:59","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/01\/02\/tariff-talk-sends-jolt-through-canadian-energy-sector\/"},"modified":"2025-01-02T11:00:59","modified_gmt":"2025-01-02T11:00:59","slug":"tariff-talk-sends-jolt-through-canadian-energy-sector","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/01\/02\/tariff-talk-sends-jolt-through-canadian-energy-sector\/","title":{"rendered":"Tariff talk sends jolt through Canadian energy sector"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header article-header--story\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\" data-aqa=\"nav-breadcrumb\">\n<p>Breadcrumb Trail Links<\/p>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\">Energy<\/li>\n<li class=\"breadcrumbs__item\">Oil &amp; Gas<\/li>\n<li class=\"breadcrumbs__item\">News<\/li>\n<\/ol>\n<\/nav>\n<div class=\"article-header__detail\">\n<div class=\"article-header__detail__texts\">\n<p class=\"article-subtitle\">Retaliatory threats have not been endorsed by Canadian oilpatch leaders, where industry fears weaponizing energy exports could have lasting consequences<\/p>\n<div class=\"callout callout--noindent flex-align-center flex-justify-between\" data-evt-val=\"{\" control_fields=\"\" data-evt=\"visible\" data-evt-typ=\"element_view\"><span class=\"callout__text\"> Get the latest from Meghan Potkins straight to your inbox <\/span><button class=\"button button--icon button--primary-alt\" data-id-login-redirect=\"https:\/\/financialpost.com\/author\/mpotkinspostmedia-com\/newsletters\/\" type=\"button\"><span class=\"button__text\">Sign Up<\/span> <span aria-hidden=\"true\" class=\"button__icon\"> <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 11 11\" width=\"11\"><polygon points=\"1.1 0 7 6 1.1 12 0 10.9 4.8 6 0 1.1\"\/><\/svg> <\/span><\/button><\/div>\n<div class=\"article-meta\">\n<p><span class=\"published-date__since\">Published Jan 02, 2025<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">Last updated 5\u00a0hours ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">7 minute read<\/span><\/p>\n<div class=\"article-meta__bottom\">\n<div class=\"bookmark-wrapper\">\n<div class=\"popover\" data-aqa=\"popover\" data-click-to-appear=\"True\" data-container=\"\" data-container-offset=\"\" data-no-style=\"\" data-popover-component=\"\" data-position=\"top\" data-sticky=\"\" data-tail-offset=\"200\" data-tail-position=\"right\"><button class=\"popover__trigger bookmark-button\"><span class=\"save-article-button save-article-button--default\" title=\"Save article\" data-article-id=\"cf0626a7-9f29-42c2-ab5f-3c9bb17853d6\" data-evt-skip-click=\"true\"\/><\/button><\/p>\n<div aria-describedby=\"popover-desc-popover-bookmark\" class=\"popover__content\" hidden=\"\" role=\"dialog\">\n<div class=\"popover__content__wrapper\">\n<div class=\"popover__content__text\" id=\"popover-desc-popover-bookmark\">\n<div class=\"bookmark__popover__content\">\n<p>You can save this article by registering for free here. Or sign-in if you have an account.<\/p>\n<\/div>\n<\/div>\n<p><button class=\"popover__content__close\" data-evt-skip-click=\"true\" title=\"Close\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:xlink=\"http:\/\/www.w3.org\/1999\/xlink\" viewbox=\"0 0 12 12\" class=\"icon--close\" height=\"12\" version=\"1.1\" width=\"12\"><polygon points=\"12 0.95 11.05 0 6 5.05 0.95 0 0 0.95 5.05 6 0 11.05 0.95 12 6 6.95 11.05 12 12 11.05 6.95 6\"\/><\/svg><\/button><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<figure class=\"featured-image\" data-aqa=\"featured-image\"><picture class=\"featured-image__ratio\"><\/source><\/source><\/source><\/source><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Canadian crude exports accounts for 65 per cent of total crude runs in American Midwest refineries, making it the No. 1 feedstock in the region.<\/span> <span class=\"credit\">Photo by Jeff McIntosh\/THE CANADIAN PRESS files<\/span><\/figcaption><\/figure>\n<\/div>\n<\/header>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p data-async=\"\">The news that United States president-elect Donald Trump could slap a 25 per cent tariff on Canadian goods upon taking office in January sent a jolt of alarm through the entire Canadian economy, but the alarm in the oilpatch has only deepened as Ottawa and the provincial governments threaten to target energy exports in retaliation.<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p data-async=\"\">Energy producers and fuel companies on both sides of the border are growing concerned that commodity flows could be disrupted if a tit-for-tat trade war erupts in response to Trump\u2019s announcement on social media in November that he intends to impose a tax on all goods entering the country from Canada and Mexico.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_2\">\n<section aria-describedby=\"advertisment4917174117636242535678041355452416\" class=\"ad\">\n<p>Advertisement 2<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__inner__container\" data-ad=\"[[6,6],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"6x6\" data-ad-loc=\"2\" data-ad-mobile=\"[[6,6],[320,50],[300,50],[300,250],[300,600]]\" data-aqa=\"advertisement\" id=\"ad-2\" style=\"--desktopHeight:250px;--mobileHeight:600px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<div class=\"article-block 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Joe O&#8217;Connor, Gabriel Friedman and others.<\/li>\n<li>Daily content from Financial Times, the world&#8217;s leading global business publication.<\/li>\n<li>Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.<\/li>\n<li>National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.<\/li>\n<li>Daily puzzles, including the New York Times Crossword.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__anonymous\">\n<p>REGISTER \/ SIGN IN TO UNLOCK MORE ARTICLES<\/p>\n<p class=\"identity-intro__description\">Create an account or sign in to continue with your reading experience.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Access articles from across Canada with one account.<\/li>\n<li>Share your thoughts and join the conversation in the comments.<\/li>\n<li>Enjoy additional articles per month.<\/li>\n<li>Get email updates from your favourite authors.<\/li>\n<\/ul>\n<\/div>\n<div class=\"intro-body__registration_only hidden\">\n<p>THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.<\/p>\n<p class=\"identity-intro__description\">Create an account or sign in to continue with your reading experience.<\/p>\n<ul class=\"list-unstyled list-checkmark\">\n<li>Access articles from across Canada with one account<\/li>\n<li>Share your thoughts and join the conversation in the comments<\/li>\n<li>Enjoy additional articles per month<\/li>\n<li>Get email updates from your favourite authors<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/header>\n<div class=\"identity-screen m-x-0 p-x-0 col-xs-12 col-md-6 flex-justify-center flex-align-center\" aria-live=\"assertive\">\n<section class=\"sail\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-sailthru-personalization-engine=\"\" data-sailthru-personalization-engine-component=\"\"\/>\n<div class=\"m-x-0 p-x-0 col-xs-12 col-sm-6 col-md-12 flex-align-justify-center\" data-auth-component=\"\" id=\"auth-screen-form\">\n<div class=\"identity-screen-form--active w-full flex-align-justify-center\">\n<div class=\"identity-screen-form identity-screen__content w-full\">\n<h2 class=\"blocker-title\">Sign In or Create an Account<\/h2>\n<p><span class=\"identity-divider__line\"\/><span class=\"identity-divider__text\">or<\/span><span class=\"identity-divider__line\"\/><\/p>\n<\/div>\n<\/div>\n<\/div>\n<footer class=\"identity-footer identity-screen__content m-x-0 p-x-0 col-sm-6 col-md-12\"\/><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p data-async=\"\">One of the country\u2019s largest integrated oil producers, Cenovus Energy Inc., which owns refineries and interests in facilities in Canada and the U.S. Midwest and Texas, warned against tariffs or retaliations over oil.<\/p>\n<p>\u201cAny trade barriers that might be imposed on this free flow of trade could have a serious negative impact on both sides of the border,\u201d Cenovus spokesperson Reg Curren said.<\/p>\n<p>\u201cA reduction in Canadian exports will inevitably lead to reduced revenues for industry and governments, and it will also increase the price American families and consumers pay for finished products, such as gasoline, diesel, aviation fuel and asphalt \u2014 of which Cenovus is a leading producer.\u201d<\/p>\n<p>Canada is reliant on U.S. demand for its energy exports, but U.S. refineries have also grown increasingly dependent on Canadian crude, the exports of which to the U.S. have doubled since 2010 to nearly four million barrels per day (MMb\/d)\u00a0from 1.9 MMb\/d, according to data from the Canada Energy Regulator and the U.S. Energy Information Administration.<\/p>\n<p>The American Petroleum Institute, one of the most powerful trade organizations representing the U.S. energy industry, has been urging the incoming administration to exclude crude oil, natural gas and related products from any tariffs. It said U.S. consumers rely on a free flow of energy products and that tariffs threaten North American energy security.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_3\">\n<section aria-describedby=\"advertisment7237913179245975822039857743527936\" class=\"ad\">\n<p>Advertisement 3<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__inner__container\" data-ad=\"[[7,7],[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-interscroller=\"7x7\" data-ad-loc=\"3\" data-ad-mobile=\"[[7,7],[300,250],[320,50],[300,50]]\" data-aqa=\"advertisement\" id=\"ad-3\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>The profound interconnectedness of the two countries when it comes to energy, thanks to critical infrastructure linkages and longstanding commercial arrangements, has prompted some to predict that Trump will exempt crude oil and natural gas from any tariffs he pursues against Canada.<\/p>\n<p>Still, the sector could be drawn into a trade war if Ottawa and the provincial governments decide to throttle energy exports in a bid for leverage.<\/p>\n<p>Ontario Premier Doug Ford has threatened retaliatory tariffs and to cut off energy supplies, including electricity and other fuels, to neighbouring states if Trump follows through on his tariff plan. British Columbia Premier David Eby said his province would support retaliatory tariffs as well.<\/p>\n<p data-async=\"\">The federal government said it is also considering retaliatory measures, including an export tax on key commodities, such as oil, potash and uranium, according to Bloomberg News.<\/p>\n<p>The threats have not been endorsed by leaders within the Canadian oilpatch, where industry veterans fear that weaponizing energy exports, even temporarily, could have lasting consequences.<\/p>\n<\/section>\n<div class=\"js-widget-content article-content__widget-group article-content__widget-group--content-slot27 article-content__widget-group--newsletter-slot\">\n<section class=\"newsletter-widget__new-story-page fp-execsummary background--primary-light-gradient\" aria-labelledby=\"FinancialPostPosthaste5057306574626813105926557065543680\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-aqa=\"widget-newsletter\" data-newsletter=\"single\" data-newsletter-component=\"\" data-target-list=\"FP_ExecSummary\" data-widget=\"newsletter\">\n<div class=\"newsletter-new-story-page-template\">\n<div class=\"newsletter-widget__header__new-story-page\">\n<div class=\"newsletter-widget__banner__new-story-page\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 75w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 100w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 150w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 240w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 320w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 500w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 640w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 800w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 1024w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 1280w, https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg 1600w\" alt=\"Posthaste\" loading=\"lazy\" fifu-data-src=\"https:\/\/dcs-static.gprod.postmedia.digital\/17.6.4\/websites\/images\/newsletters\/icon-fp-posthaste.svg\"\/><\/div>\n<div>\n<p>Posthaste<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.<\/p>\n<\/div>\n<\/div>\n<div class=\"newsletter-widget__body__new-story-page\">\n<div class=\"js-replace-main__new-story-page\">\n<p class=\"newsletter-widget__disclaimer__new-story-page text-size--tiny\">By signing up you consent to receive the above newsletter from Postmedia Network Inc.<\/p>\n<\/div>\n<div class=\"js-submit-success\" hidden=\"\" id=\"submitSuccessFP_ExecSummary\">\n<p>Thanks for signing up!<\/p>\n<p class=\"newsletter-widget__text__new-story-page\">A welcome email is on its way. If you don&#8217;t see it, please check your junk folder.<\/p>\n<p class=\"newsletter-widget__text__new-story-page newsletter__feedback--last\">The next issue of Posthaste will soon be in your inbox.<\/p>\n<\/div>\n<p class=\"newsletter-widget__text__new-story-page js-submit-error\" style=\"margin-top: 8px\" hidden=\"\" id=\"submitErrorFP_ExecSummary\">We encountered an issue signing you up. Please try again<\/p>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_4\">\n<section aria-describedby=\"advertisment1098472495263771376363013134090240\" class=\"ad\">\n<p>Advertisement 4<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-4\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"4\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-4\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>\u201cAmericans right now feel they have a very reliable, secure supplier of energy, and if that were to change, they would look for alternatives, and that market may not come back and that would be devastating for the Canadian economy broadly,\u201d one senior industry source said.<\/p>\n<p data-async=\"\">Threatening a move such as cutting off energy exports to the U.S. also flies in the face of the Canadian oilpatch\u2019s staunch opposition to state-level attempts to shut down Enbridge Inc.\u2019s cross-border Line 5 pipeline over the years.<\/p>\n<p>The sector has so far successfully argued for preserving flows on the pipeline carrying oil and natural gas liquids between Wisconsin and Michigan to refineries in Sarnia, Ont., on the basis of Canada\u2019s 1977 pipeline treaty with the U.S.<\/p>\n<p>Alberta Premier Danielle Smith said her province won\u2019t agree to cutting oil and gas exports.<\/p>\n<p>\u201c<span data-olk-copy-source=\"MessageBody\">The federal government must also immediately cease any consideration of taxing Alberta\u2019s energy exports,\u201d she said in a statement. <\/span><span data-olk-copy-source=\"MessageBody\">\u201cThis sort of taxation amounts to one thing: theft from the people of Alberta. It will not be tolerated.\u201d<\/span><\/p>\n<h2>\u2018No real alternative\u2019<\/h2>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_5\">\n<section aria-describedby=\"advertisment4157121542974486573135165256630272\" class=\"ad\">\n<p>Advertisement 5<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-5\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"5\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-5\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>While Canadian political officials continue to debate how best to counter Trump\u2019s threats, the energy sector is scrambling to determine the potential impact of tariffs on commodity flows.<\/p>\n<p>\u201cThe potential impact of a big bump-up in the delivered cost of imported Canadian crude in particular is enormous,\u201d RBN Energy LLC analyst Housley Carr said in a recent note.<\/p>\n<p data-async=\"\">U.S. refineries have increasingly been optimized to process heavy crude oils such as those exported from the Alberta oilsands. Midwest refineries (known as PADD 2) are particularly dependent on Canadian crude, which is a circumstance not easily remedied under current pipeline configurations, he said.<\/p>\n<p>\u201cJust as important, PADD 2 refineries have no real alternative \u2026 there is no cost-effective way to deliver vast quantities of comparable imported heavy oil (domestic production is almost exclusively light) from Gulf Coast docks to the Midwest,\u201d Carr said, suggesting a tariff would hurt refining margins and result in higher prices for gasoline, diesel and jet fuel.<\/p>\n<p>\u201cVery likely, a tariff would lead many refineries in the PADD 2 to either ramp down their operations or even shut down.\u201d<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_6\">\n<section aria-describedby=\"advertisment1965836044953911403567269097242624\" class=\"ad\">\n<p>Advertisement 6<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-6\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"6\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-6\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>Canadian crude accounts for 65 per cent of total crude runs in Midwest refineries, making it the No. 1 feedstock in the region, Chet Thompson, chief executive of the American Fuel &amp; Petrochemical Manufacturers association, said in a recent statement.<\/p>\n<p>\u201cThere is no easy, fit-for-purpose replacement for this crude oil,\u201d he said.<\/p>\n<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">There could be other casualties in a trade war targeting energy. Trump\u2019s proposed tariffs are also expected to increase energy bills in the northeastern U.S. and to raise electricity costs on both coasts where U.S. consumers are reliant on electricity and natural gas imports from Canada.<\/span><\/p>\n<h2>Canada\u2019s perennial problem<\/h2>\n<p><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif; font-size: 16px;\">However, Canada is more reliant on the U.S. than the U.S. is reliant on Canada when it comes to energy.<\/span><\/p>\n<p data-async=\"\">More than 97 per cent of Canadian crude oil exports were destined for the U.S. in 2023, according to the Canada Energy Regulator. And while the Trans Mountain pipeline expansion (TMX) has opened new trade routes to Asia, the majority of tankers carrying Canadian barrels away from the B.C. coast are winding up in California.<\/p>\n<p data-async=\"\"><span style=\"font-family: -apple-system, BlinkMacSystemFont, 'Segoe UI', Roboto, Oxygen-Sans, Ubuntu, Cantarell, 'Helvetica Neue', sans-serif;\">A tariff on Canadian products should ostensibly be paid by U.S. importers, but, in practice, experts say tariffs on Canadian oil would likely drive discounts on barrels of Western Canadian Select (WCS), this country\u2019s benchmark heavy crude blend.<\/span><\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_7\">\n<section aria-describedby=\"advertisment8794428685319007208846735431434240\" class=\"ad\">\n<p>Advertisement 7<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-7\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"7\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-7\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p data-async=\"\">WCS typically trades at a discount of US$10 to US$20 per barrel compared to U.S. benchmark West Texas Intermediate, which creates additional economic incentives for refiners to use Canadian heavy crude, according to a recent report by the Canadian Global Affairs Institute.<\/p>\n<p>\u201cOne of our weaknesses is that we don\u2019t have a lot of other places to sell our product,\u201d Jackie Forrest, executive director of the ARC Energy Research Institute, said. \u201cIf there\u2019s a tariff where refiners have to pay more money for our crude oil than other options, then they may reduce the use of our oil. Maybe they still use quite a bit, but they use a bit less than they would have before.<\/p>\n<p>Some refineries will be able to replace a portion of their Canadian imports with domestic supplies; with less demand for Canadian oil south of the border, inventories could start to build in Western Canada.<\/p>\n<p>\u201cI think there\u2019s a good chance in that scenario that we see a discount for our products,\u201d Forrest said.<\/p>\n<p>For the past three years, Canadian crude oil production has been increasing, hitting record highs supported by growing global demand and a boost to export capacity via the Trans Mountain pipeline expansion.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group ad_counter_8\">\n<section aria-describedby=\"advertisment2462573186302833102037092575215616\" class=\"ad\">\n<p>Advertisement 8<\/p>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-8\">\n<div class=\"ad__inner__container\" data-ad=\"[[1200,250],[1200,90],[970,90],[970,250],[728,90],[300,250]]\" data-ad-loc=\"8\" data-ad-mobile=\"[[320,50],[300,50],[300,250]]\" data-aqa=\"advertisement\" id=\"ad-8\" style=\"--desktopHeight:250px;--mobileHeight:250px\">\n<div aria-hidden=\"true\" class=\"ad__placeholder\">\n<p>This advertisement has not loaded yet, but your article continues below.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<p>Three major Canadian oil and gas companies recently announced their intention to boost production in 2025: Suncor Energy Inc. said it would increase output by five per cent next year; Cenovus projected a four per cent increase; and Imperial Oil Ltd. forecasted growth of three per cent in 2025.<\/p>\n<section aria-labelledby=\"moreTopicLabel7381449767114745190403945573384192\" class=\"more-topic\" data-aqa=\"embed-more-topic\" data-carousel-component=\"\" data-carousel-icon-button=\"\" data-carousel-type=\"list\">\n<p>Recommended from Editorial<\/p>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-prev\" data-carousel-prev=\"\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/><\/p>\n<ol class=\"more-topic__items list-unstyled\" data-carousel-slide-list=\"\" tabindex=\"0\">\n<li data-evt-val=\"{\" control_fields=\"\" donald=\"\" trump=\"\" heal=\"\" canada=\"\" ailing=\"\" economy=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i1.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-mg-trump.jpg?h=96&strip=all&quality=5&sig=nUuGRz5QL6AxmLU84LG7fA&ssl=1&w=75&resize=75&ssl=1 75w, 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srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-mg-trump.jpg?h=96&strip=all&quality=80&sig=wlY88h0DEeP9N4IWysHwYw, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-mg-trump.jpg?h=192&strip=all&quality=80&sig=DlM4an5CDeLKfwRyIPuoBg 2x,\n                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-mg-trump.jpg?h=288&strip=all&quality=80&sig=kpZm6YfDAZVaK7PXivUaKQ 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">Could Donald Trump heal Canada&#8217;s ailing economy?<\/span><\/p>\n<\/li>\n<li data-evt-val=\"{\" control_fields=\"\" using=\"\" canada=\"\" as=\"\" a=\"\" bag=\"\" mark=\"\" warner=\"\" says=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=240&resize=240&ssl=1 240w, 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https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"U.S. President-elect Donald Trump speaks at AmericaFest, Sunday, Dec. 22, 2024, in Phoenix.\" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=80&sig=gpcPKUN5QhQu94D_baov0w\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=5&sig=oC7Qx8CajwEnqCSvSKzWrA&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=96&strip=all&quality=80&sig=gpcPKUN5QhQu94D_baov0w, https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=192&strip=all&quality=80&sig=zBqWwHlcv7G0HHIoQnt6uw 2x,\n                                             https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/1225-bc-trump.jpg?h=288&strip=all&quality=80&sig=5WuVl8WtHw18zJkjKLU2Qw 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">Trump using Canada as a &#8216;punching bag,&#8217; Mark Warner says<\/span><\/p>\n<\/li>\n<li data-evt-val=\"{\" control_fields=\"\" avoid=\"\" tariffs=\"\" canada=\"\" needs=\"\" to=\"\" negotiate=\"\" with=\"\" trump=\"\" data-carousel-item=\"\" data-evt=\"click\" data-evt-typ=\"click\"> <picture class=\"more-topic__item-image\"><img decoding=\"async\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/ywAAAAAAQABAAACAUwAOw==\" fifu-lazy=\"1\" fifu-data-sizes=\"auto\" fifu-data-srcset=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=75&resize=75&ssl=1 75w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=100&resize=100&ssl=1 100w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=150&resize=150&ssl=1 150w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=240&resize=240&ssl=1 240w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=320&resize=320&ssl=1 320w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=500&resize=500&ssl=1 500w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=640&resize=640&ssl=1 640w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=800&resize=800&ssl=1 800w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=1024&resize=1024&ssl=1 1024w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=1280&resize=1280&ssl=1 1280w, https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1&w=1600&resize=1600&ssl=1 1600w\" alt=\"U.S. president-elect Donald Trump greets Prime Minister Justin Trudeau at the White House in Washington, D.C. \" data-src=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=80&sig=tjdR4UGtZPta5dZ7vNh1Cg\" fifu-data-src=\"https:\/\/i2.wp.com\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=5&sig=lp_dC2rYM9LUruWDL0hDhA&ssl=1\" srcset=\"https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=96&strip=all&quality=80&sig=tjdR4UGtZPta5dZ7vNh1Cg, https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=192&strip=all&quality=80&sig=WAWHJXT7ovJeArY2aSQIMA 2x,\n                                             https:\/\/smartcdn.gprod.postmedia.digital\/nationalpost\/wp-content\/uploads\/2024\/12\/no1217trump-trudeau.jpg?h=288&strip=all&quality=80&sig=0FBhl7PfBWagFFRufUMpOw 3x\" class=\"lazyload\" height=\"96\" loading=\"lazy\" width=\"96\"\/><\/picture>\n<p><span class=\"more-topic__item-text-clamp\">To avoid tariffs, Canada needs to negotiate with Trump<\/span><\/p>\n<\/li>\n<\/ol>\n<p><button aria-hidden=\"true\" class=\"more-topic__button-next\" data-carousel-next=\"\" tabindex=\"-1\" title=\"next\" type=\"button\"\/><\/section>\n<p>But those outlooks could quickly change if Canadian energy becomes a bargaining chip in a larger trade war.<\/p>\n<p>Forrest said there\u2019s one surefire way of avoiding the disruption of similar situations in the future.<\/p>\n<p>\u201cWe need more customers for our products so that we\u2019re not beholden to the Americans,\u201d he said. \u201cIf we had one additional oil pipeline, let\u2019s say the size of (Northern) Gateway, that would result in us not having to take price discounts because we would have alternative places to sell our products.\u201d<\/p>\n<p data-async=\"\"><em>\u2022 Email: mpotkins@postmedia.com <\/em><\/p>\n<p data-async=\"\"><em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here.<\/em><\/p>\n<\/section>\n<section class=\"article-content__content-group article-content__content-group--story\">\n<p>Article content<\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt-val=\"{\" control_fields=\"\" data-evt-typ=\"page_scroll\">\n<p>Share this article in your social network<\/p>\n<\/section>\n<\/div>\n\n<br \/>Tariff talk sends jolt through Canadian energy sector<\/a><br \/>\n<br \/>2025-01-02 11:00:59<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Breadcrumb Trail Links Energy Oil &amp; Gas News Retaliatory threats have not been endorsed by Canadian oilpatch leaders, where industry fears weaponizing energy exports could have lasting consequences Get the&#8230;<\/p>\n","protected":false},"author":2,"featured_media":54599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2024\/12\/0102-mg-oilpatch.jpg?quality=90&strip=all&w=288&h=216&sig=eksO4ksnSEzoPutaD4MoCQ","fifu_image_alt":"","footnotes":""},"categories":[31],"tags":[],"class_list":["post-54598","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/54598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=54598"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/54598\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/54599"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=54598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=54598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=54598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}