Most Americans, like most Canadians, probably have no idea how important sa国际传媒 is to American energy security and its comparatively cheap gasoline.
But they may soon find out.
Should Donald Trump’s threats of 25 per cent tariffs across the board on Canadian imports include oil and natural gas, there would be a crude awakening.
American consumers would invariably be hit with price hikes at the gas pumps, should Canadian oil producers be hit with 25 per cent tariffs, as about one-third of American refining capacity is configured for heavy crude, most of which comes from Alberta’s oil sands.
American LNG exporters would also feel the pain, as some of the natural gas used to feed LNG terminals on the Gulf Coast comes from Alberta and sa国际传媒 via pipeline.
Trump’s threat of across-the-board tariffs on Canadian and Mexican imports is sending “shockwaves” through the Canadian business community, said Bridgitte Anderson, president of the Greater Vancouver Board of Trade (GVBOT) at an energy and resources forum Tuesday in Vancouver.
“The president-elect is threatening 25 per cent across the board on all Canadian projects,” said Lisa Baiton, president of the Canadian Petroleum Producers (CAPP).
“This would be catastrophic for sa国际传媒's economy. And these kinds of events underscore the impacts of global instability and show how our resource sector, the economy and national security are all highly interdependent.”
sa国际传媒 lumber exports to the U.S. are already subject to duties of about 15 per cent. Presumably, blanket tariffs on Canadian goods would add another 10 per cent.
During his previous administration, Trump implemented tariffs on Canadian steel and aluminum, but energy exports, like oil and gas were not included.
While it’s not yet clear whether the threatened tariffs would include energy exports -- oil, natural gas and electricity -- Trump did make a point of upper-casing his threat to suggest they would apply to everything.
“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and sa国际传媒 a 25 per cent Tariff on ALL products coming into the United States, and its ridiculous Open Borders,” Trump wrote on his Truth Social network on November 24.
The five top exports from sa国际传媒 to the U.S., in order of value, are crude oil and refined petroleum products, automotive parts, natural gas, electricity, and lumber and wood products.
Business groups and chambers of commerce in sa国际传媒 are reacting to the threat with alarm.
“A tariff of this magnitude will have significant consequences for sa国际传媒 businesses of all sizes and will negatively impact communities and workers across British Columbia,” said BC Chamber of Commerce president Fiona Famulak.
“These proposed tariffs would have devastating consequences for our local businesses, further straining supply chains and diminishing the economic recovery we’ve worked so hard to achieve,” said Surrey Board of Trade spokesman Jasroop Gosal.
“Some might say that the president-elect's tariff threat is meant to be provocative," Baiton said. “I would say it's expected. And sa国际传媒 needs to remember how closely integrated our market is in the U.S.
“Our supply chains are highly intertwined. In 2022, sa国际传媒 exported, in U.S. dollars $438 billion to the US, and a significant portion of that – or 27 per cent of that -- sa国际传媒's merchandise exports to the U.S. were energy related, including oil, gas, electricity and uranium."
What’s not well understood about sa国际传媒’s role in American energy security is the configuration of American oil refineries. Many of the large refineries in the U.S. – notably in the midwest and Gulf Coast -- are built to refine heavy crude, not the lighter oil produced in the U.S. in its shale oil sector.
As a result of this, 61 per cent of the crude oil imported by the U.S. comes from sa国际传媒, according to the U.S. Energy Information Administration (EIA). Canadian heavy crude accounts for about 24 per cent of all crude oil consumption in the U.S.
Depending on where oil prices are at, a 25 per cent tariff could add about $20 to the price of a barrel of oil for refiners, which would invariably result in higher prices for gasoline in the U.S.
As for natural gas, in 2022, 99 per cent of American imports of natural gas were from sa国际传媒, according to the EIA, most of it from Alberta and sa国际传媒 The U.S. imported three trillion cubic feet of natural gas in 2022.
Some of the natural gas now exported to the U.S. from Alberta and sa国际传媒 now feed LNG projects on the Gulf Coast, which would be affected by higher natural gas prices, as a result of tariffs.
“Imposing tariffs on products like energy would cause chaos for our very integrated markets and our very integrated supply chains, and would have a devastating effect on sa国际传媒," Baiton said. "So whether that tariff threat comes to fruition or not, sa国际传媒 is at a very real point of inflection.”
