The U.S. relies on Canadian oil imports, despite comments on the contrary by U.S. President Donald Trump, the CEO of Cenovus Energy told the Global Energy Conference in Calgary on Tuesday.
Trump has threatened on-again, off-again tariffs on Canada’s oil, of which nearly 4 million barrels per day are exported to the US. Canada is the world’s fourth-largest oil producer, and fifth-largest natural gas producer.
Trump has previously said the U.S. doesn’t have to import goods, including oil and gas, from Canada.
Prime Minister Mark Carney, who won a minority government in April on a wave of anti-Trump voter sentiment, has said the country’s old relationship with the U.S. based on steadily increasing economic integration is over.
Jon McKenzie, who heads oil sands company Cenovus and chairs the Canadian Association of Petroleum Producers industry group, said trade tensions between the 2 nations have highlighted the necessity for Canada to diversify its exports.
But he said that need doesn’t take away from the very fact the 2 countries’ energy systems are inextricably linked.
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“What hasn’t modified is energy economics and energy physics,” said McKenzie. “The fact is we’re hardwired into the U.S. system.”
Canada depends upon U.S. refiners to purchase the overwhelming majority of its exported oil, while landlocked U.S. refineries within the Midwest are configured to process the grade of crude that Canada produces.
McKenzie said Canada has the chance to grow its oil output in the approaching a long time, and added the country’s recent government needs to acknowledge Canada’s co-dependence with the U.S. and seek to enhance that relationship.
“We want to ensure that we don’t act viscerally once we’re threatened, and that we act intelligently in our long-term interest,” he said.
As a part of its response to the U.S. tariff threat, Carney has pledged to discover and fast-track projects of national interest aimed toward helping Canada turn out to be what he calls a standard and clean energy superpower.
McKenzie said the oil and gas sector doesn’t want the federal government to choose winners and losers by deciding which projects to fast-track.
He said the industry as an alternative desires to see broad regulatory reform that can remove barriers to investing in oil and gas projects.
