Whether you’re job-hunting, dating, or — in Canada’s case — exporting billions of dollars of crude oil, it’s always good to have options.
Driving the news: Fear that the U.S. will slap hefty tariffs on Canadian oil imports has policymakers dusting off shelved energy projects that have been left for dead.
Why it matters: Crude oil accounts for 20% of Canada’s exports, and 95% of it goes to the U.S. That level of dependence on one buyer creates risks for the whole economy if they suddenly become a less reliable trading partner.
Status update: A number of major energy projects aimed at getting Canadian oil to other markets that were shelved in the past decade are now getting another look.
- The Energy East pipeline would have transported oil from Alberta to a terminal in New Brunswick, where it could have been exported abroad. TransCanada cancelled the project in 2017, citing political opposition in Québec and among Indigenous communities along with falling oil prices.
- Enbridge’s Northern Gateway pipeline would have carried Alberta oil to a shipping terminal in Kitimat, B.C. for export to Asia. The project faced significant political opposition over its potential environmental impact and was effectively killed when the Trudeau government banned oil tanker traffic on B.C.’s north coast.
- Eagle Spirit, an Indigenous-owned pipeline to B.C.’s coast pitched as an alternative to Northern Gateway, was also sidelined by the tanker ban.
Yes, but: The political opposition that sunk past projects hasn’t disappeared, and any resurrected pipeline plans will have to overcome that roadblock.
- There’s also the question of whether more pipelines will still make economic sense if the U.S. backs off its tariff threats, particularly given the massive cost overruns Trans Mountain, the one pipeline Canada has built recently, faced.
Bottom line: The roadblocks that stymied past pipeline projects haven’t gone anywhere, but decision-makers may now be rattled enough by American tariffs to overcome them.—TS