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Trudeau exit may spur Canadian energy growth

  • Spanish Market: Crude oil
  • 13/01/25

Canadian prime minister Justin Trudeau's place in federal politics is winding down after nine years of driving change in climate policy, but those environmental advances came at a cost for the world's fourth-largest oil producer, helping to stifle foreign investment in the country's oil and gas sector.

Support for Trudeau fell nationwide over the past year, as inflation and rising housing costs fueled by a relaxed immigration policy and carbon taxes became too much for many to bear. Trudeau, seemingly immune to scandal and high-profile exits on his team, was dealt his biggest blow when his deputy prime minister and finance minister Chrystia Freeland resigned in December, citing his approach to the "aggressive economic nationalism" of US president-elect Donald Trump's threatened trade tariffs, prompting his 6 January decision to step down.

Canadian crude producers still managed to lift output by 30pc during Trudeau's tenure since 2015, even as major foreign players abandoned the oil sands for friendlier jurisdictions and upstream projects and pipelines were either mothballed or cancelled outright. Provincial jurisdiction over resources prompted frequent fights between Trudeau and Albertan premiers who guarded their claim to energy and the right to explore and extract within their borders.

"We could've done so much more," Alberta premier Danielle Smith said hours after Trudeau's announcement, lamenting missed opportunities for Canada's oil patch over the past decade, including the failed Energy East, Northern Gateway and Keystone XL export pipelines. A tanker ban, tighter regulation and an onerous project approval process were among the tools Trudeau used to try to rein in the oil and gas sector, saying in 2017 that Canada's oil sands needed to be "phased out" before naming a former Greenpeace director as his environment minister.

Smith did give Trudeau a nod for his commitment to keeping midstream giant Enbridge's Line 5 pipeline from shutting down, and for helping to get the massive Trans Mountain Expansion (TMX) pipeline and Coastal GasLink export projects from Alberta to Canada's Pacific coast across the finish line. But while Smith welcomes Trudeau's resignation, Canada now faces a period of lame duck leadership before it holds federal elections, while cross-border tensions are rising.

Your new best frenemy

Its largest trading partner is quickly becoming its newest antagonist, with Trump threatening a 25pc tariff on all imports from Canada and Mexico. Unencumbered movement of oil is critical on both sides of the border, with 80pc of Canada's 5mn b/d of crude production aimed at refineries in the US. Many landlocked Canadian producers have no practical alternative, like refiners in the US midcontinent connected by pipeline.

As political chaos unfolds in Ottawa, Trump has lobbed insults at Trudeau and made calls for the northern neighbour to become the US' "51st state", a taunt that has struck a nerve in Canada. "There isn't a snowball's chance in hell that Canada would become part of the US," Trudeau said on X on 7 January. "Trump's comments show a complete lack of understanding of what makes Canada a strong country," wrote minister of foreign affairs Melanie Joly.

Trump will have spotted Canada's weakness months ago, with support for Trudeau tumbling to the benefit of the Conservative Party and its leader Pierre Poilievre. Recent polls indicate the centre-right party would win a majority of seats in the House of Commons if an election were held today. That is likely to happen in May, assuming opposition parties bring down the government when Parliament resumes in late March. Should Poilievre win, Trump will have a partner better aligned on more policies than Trudeau was, but the suggestion that Canada could become part of the US will get the same response. "We will never be the 51st state. Period," Poilievre said.

His primary ambitions are to undo Trudeau's work, with the federal carbon tax being the first to go. Rescinding the tanker ban, killing proposed emissions caps and promoting pipeline construction are also on the agenda. Poilievre plans to "take back control" of Canada's resources through permitting and cutting taxes on pipeline and LNG projects to become less reliant on the US.

"Canadians will give me a mandate to take the country in a completely opposite direction," Poilievre said on the Jordan B Peterson Podcast earlier this month, describing how vanquishing Trudeau's energy policy will "cause a massive resource boom in our country." The lengthy exchange touched on minimising government, artificial intelligence and immigration, and was shared by Trump's ally, Tesla chief executive Elon Musk, who called it a "great interview".

Priming for another Pacific pipeline

Canada's energy industry has returned to profit and received a much-needed boost from the federally owned 590,000 b/d TMX pipeline, but rising oil sands production means the newly commissioned system is destined to fill up soon. The prospect of an industry-friendly federal government reinvigorating a relatively dormant midstream sector is positive for investment in Canada, and the US could play an unintended role in deciding where any pipelines are proposed.

Enbridge and the Alberta government are teaming up to find ways to expand pipeline capacity. Smith singled out the US as a customer she wants to enhance ties with amid looming tariff threats, but those threats may prompt a revival of pipeline projects to Canada's west coast to reduce dependence on the US market.

Enbridge's Northern Gateway pipeline was approved in 2014, but a Liberal Party led by Trudeau came to power in 2015 with sweeping changes for the oil and gas sector, including a tanker ban on the country's Pacific coast, effectively killing the project. The C$7.9bn ($7.3bn) Northern Gateway was not in the interest of local communities, Trudeau said in late 2016, when he officially reversed the previous government's approval. The pipeline would have shipped 525,000 b/d of diluted bitumen westward and 193,000 b/d of imported condensate eastbound to the oil sands region for blending. Construction would have avoided large populations and was seen as the most practical option for getting more Canadian crude to Asia-Pacific. Its northern terminal may not have had the same tanker limitations as TMX faces at Vancouver, and could have seen reduced voyage times.

Enbridge now has added support from the Alberta government by way of crude volumes the province collects as tax from some oil companies in lieu of cash payments. These in-kind barrels would be the first to backstop a major pipeline expansion by Enbridge, giving both the midstream company and other producers something to latch onto to advance a future project. This is a new approach for Alberta, after sacrificing C$1.5bn it paid in a last-ditch effort to keep the doomed 830,000 b/d Keystone XL project to the US alive. Outgoing US president Joe Biden revoked that troubled line's permit in 2021.

Like Keystone XL, Northern Gateway is no more. Reviving such a project would still require significant stakeholder engagement along any route, and face substantially higher construction costs than a decade ago. The C$34bn TMX put into service in May 2024 was originally pegged at C$5.4bn in 2013, even less than Northern Gateway as TMX was the twinning of an existing system. This would be a big hurdle to clear, even if governments were to allay regulatory concerns. But with an unpredictable Trump returning to the White House, the prospect of shipping more Canadian crude west might soon hold a heightened appeal.

Canadian oil production

Canadian upstream investment

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07/02/25

Crude Summit:Tariff talk boosts TMX interest: Update

Crude Summit:Tariff talk boosts TMX interest: Update

Updates with details from Trans Mountain. Houston, 7 February (Argus) — The potential for tariffs on US imports of Canadian crude have driven shipper interest in exporting from Trans Mountain's docks on the west coast of Canada, as the pipeline's federal operator is weighing plans for expansions to boost the system's capacity by 200,000-300,000 b/d by the end of the decade. The 590,000 b/d Trans Mountain Expansion (TMX) pipeline, which came on line in May 2024, boosted the total capacity of the Trans Mountain system to 890,000 b/d, opening new avenues for Canadian producers to reach Asian markets. Trans Mountain has seen a "flurry of activity" in booking TMX capacity since US president Donald Trump's administration announced its intent to slap tariffs on Canadian and Mexican imports, Trans Mountain senior director of business development Jason Balasch told the Argus Global Crude Summit Americas in Houston, Texas. "The last few weeks, all of January, there's been a lot of interest from people who had not yet shipped on the line yet," Balasch said. Those tariffs on Canada and Mexico were set to take effect on 4 February, but Trump this week put them on pause until early March, pointing to progress in negotiations. "The tariffs have opened all level of government's eyes to talk of expansions," Balasch said. "We definitely expected it to drive demand for the dock." The TMX line has run recently at about 80pc of capacity, Balasch said. The 200,000-300,000 b/d expansion of the Trans Mountain system could be completed within four to five years, Balasch said. That expansion would be accomplished mostly by adding pumping capacity to the system's two existing lines. There are no plans to add a third pipeline to the system, he said. "We are focused on the quickest and economical way" to "increase access to the tidewater", he said. "I think everyone sees an egress constraint coming," Balasch said. The unpredictable tariffs situation has put expansion under a "magnifying glass," but Trans Mountain has not yet shopped its plans to shippers. The dual-line Trans Mountain system connects the trading hub of Edmonton, Alberta, to the Westridge Marine Terminal (WMT) in Burnaby, British Columbia, but volumes also go to the Burnaby refinery and southbound to Washington state via the Puget Sound Pipeline. There were 24 vessels loaded at the WMT in January, translating into about 425,000 b/d being exported on Canada's west coast during the month, meaning there is some room to expand the dock's 630,000 b/d capacity. Incremental heavy Canadian crude from Trans Mountain could be destined for China, as the US west coast is capped out at 200,000 b/d, Matt Smith, lead oil analyst Americas at Kpler, told the conference. That would require China to likely scale back on crudes from other origins amid slowing demand, Smith said. "Over the last couple of years Chinese crude imports have essentially flat-lined as their refinery runs have flat-lined," said Smith. This week's delay suggests the tariffs on Mexican and Canadian imports "are not going to come to fruition", Smith said. "There is a willingness to reach an agreement." By Chris Baltimore and Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs have ‘pluses and minuses’: ConocoPhillips


07/02/25
07/02/25

Tariffs have ‘pluses and minuses’: ConocoPhillips

New York, 7 February (Argus) — Threatened US tariffs targeting Canadian imports have both "pluses and minuses" for US independent producer ConocoPhillips which has production on both sides of the northern border. The company's primary exposure to tariffs would center upon sales from its Surmont oil sands operations in Alberta, Canada, into the US. "We sell around half of our Surmont liquids into the US on a mix of pipeline and rail," said Andy O'Brien, ConocoPhillips senior vice president for strategy, commercial, sustainability and technology. "But the remainder is actually transported to the Canadian West coast or sold in the local Alberta market." If tariffs were to be implemented, it is "pretty difficult" to say exactly who would carry the burden -- producers or buyers -- he added. "The refiners in the Midwest and the Rockies have less options to substitute versus, say, the Gulf coast or the west coast refiners," O'Brien said. The company's diversified portfolio would also help shelter it from some exposure. "If we were to see tariffs, we'd likely see strengthening differentials for Bakken, for [Alaska North Slope crude] and possibly even the Permian," said O'Brien. "So lots of moving parts." Like others in the oil industry, ConocoPhillips is looking at the potential to supply power to cater to the boom in AI data centers. "It's got to be competitive for capital, but it certainly looks like some growth opportunities potentially coming, and we're assessing some of those opportunities right now," chief executive officer Ryan Lance told analysts after posting fourth quarter results. Although the Trump administration has called on domestic producers to step up output, Lance said his priority was to drive further efficiencies in operations. "A lot of our focus and attention right now is on permitting reform," Lance said, and the need to build out energy infrastructure. Drilling approvals, rights of ways, and permits on federal land all slowed under the administration of former-president Joe Biden and there is an opportunity now to get back on track. "That just adds to the overall efficiency of the system and should lead to a more sustained plateau or growth in our production coming out of the Lower 48 in terms of liquids and certainly the growing amount of gas volumes that are coming as well," Lance said. "So it just creates a better environment for investment and more efficient operations." Full-year 2025 output at ConocoPhillips is seen in the range of 2.34mn-2.38mn b/d of oil equivalent (boe/d), which includes 20,000 boe/d of planned turnarounds. Fourth quarter 2024 profit fell to $2.3bn from $3bn in the final three months of 2023, as higher volumes were more than offset by acquisition-related expenses and lower prices. Averaged realized prices fell 10pc to $52.37/boe from the fourth quarter of 2023. Fourth quarter output of 2.18mn boe/d represented an increase of 281,000 boe/d from the same quarter of the previous year. After adjusting for acquisitions and dispositions, output grew by 6pc. As part of a $2bn divestment goal, ConocoPhillips has signed agreements to sell non-core Lower 48 assets for $600mn. They are expected to close in the first half of the year. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude Summit:Tariff talk boosts TMX pipeline interest


07/02/25
07/02/25

Crude Summit:Tariff talk boosts TMX pipeline interest

Houston, 7 February (Argus) — The potential for tariffs on US imports of Canadian crude have driven shipper interest in exporting from Trans Mountain's docks on the west coast of Canada, and the pipeline's federal operator is weighing plans for expansions that could boost the system's capacity by 200,000-300,000 b/d over the next four to five years. The 590,000 b/d Trans Mountain Expansion (TMX) pipeline, which came on line in May 2024, boosted the total capacity of the Trans Mountain system to 890,000 b/d, opening new avenues for Canadian producers to reach Asian markets. Trans Mountain has seen a "flurry of activity" in booking TMX capacity since US president Donald Trump's administration announced its intent to slap tariffs on Canadian and Mexican imports, Trans Mountain senior director of business development Jason Balasch told the Argus Global Crude Summit Americas in Houston, Texas. Those tariffs on Canada and Mexico were originally set to take effect on 1 February, but Trump this week put them on pause until early March, pointing to progress in negotiations. "The tariffs have opened all level of government's eyes to talk of expansions," Balasch said. "We definitely expected it to drive demand for the dock." The TMX line has run recently at about 80pc of capacity, Balasch said. Trans Mountain is weighing a potential 200,000-300,000 b/d expansion of the Trans Mountain system, to be completed within four to five years, Balasch said. That expansion would be accomplished mostly by adding pumping capacity to the system's existing two lines. There are no plans to add a third pipeline to the system, he said. "We are focused on the quickest and economical way" to "increase access to the tidewater", he said. This week's delay suggests the tariffs on Mexican and Canadian imports "are not going to come to fruition", Matt Smith, lead oil analyst Americas at Kpler, told the conference. "There is a willingness to reach an agreement." By Chris Baltimore Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude Summit: Argentina coexisting with TMX crude line


06/02/25
06/02/25

Crude Summit: Argentina coexisting with TMX crude line

Houston, 6 February (Argus) — Competition into the western US from the expansion of Trans Mountain's 890,000 b/d crude pipeline system in western Canada was not as severe as feared by Argentina producers. There is "still a place" for Argentina's Medanito crude on the US west coast, Francisco Villamil, executive trading manager at upstream producer Vista, said at the Argus Global Crude Summit Americas in Houston. Argentina producers were "pretty concerned" when the expansion went into service last May. At first, they felt price effects of the increased supply in the Pacific basin, but differentials stabilized and 50pc of TMX exports now go to Asia. The TMX system connects producers in Alberta to the docks at Burnaby, adjacent to Vancouver, British Columbia, and its capacity roughly tripled when the 590,000 b/d Trans Mountain Expansion (TMX) went into service. TMX has been a popular outlet for shippers, both for selling to US west coast refiners and also for producers looking to bypass the US altogether and target Asian countries. Since the TMX expansion came on line, the US west coast has received about 159,000 b/d from Vancouver, or 48pc of total Vancouver crude exports, according to Vortexa. Most of the remaining Vancouver exports went to China. Argentina averaged a record-breaking 717,100 b/d of crude production in 2024, the country's energy secretary reported. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Crude Summit: Tariffs risk drying up forward trading


06/02/25
06/02/25

Crude Summit: Tariffs risk drying up forward trading

Houston, 6 February (Argus) — US tariffs aimed against its largest trading partners creates both opportunity and uncertainty for traders, but the threat alone also dissuades trading oil too far forward. "It's not just whether tariffs come in, but it's the threat of tariffs coming in," Equinor vice president of crude trading and refinery optimization Simon James told delegates at the Argus Global Crude Summit Americas in Houston, Texas, on Thursday. The expectation of tariffs has the risk of drying up some forward trading. "People will be nervous about committing too far forward," said James, highlighting the severity of the threats made by US president Donald Trump against its North American neighbors. "The fact that the initial tariffs around Canada and Mexico were so punitive at 25pc, how someone handles that risk ... is extremely difficult," said Simon. "I think that's something the market is starting to work through and I don't think there's a good answer yet." Buying patterns have already been disrupted with traders re-thinking traditional flows in light of the potential tariffs, whether they come or not. "Already today, traders and people who are trying to connect the dots, are looking into how they should change their buying patterns," SOCAR chief trading officer Taghi Taghi-Zada said on the panel. While the actual imposition of tariffs would be an important milestone, he said, the fact people are speaking about them with confidence has already affected the markets. Traders on the edge of information flow will be better equipped to make some kind of prediction and manage exposures, said Taghi-Zada, while Barbara Harrison, vice president of crude supply and trading at Chevron, expects news headlines are what will continue to drive volatility in the near term. "For us as traders, it also creates market opportunity, but it certainly does create a lot of market uncertainty," said Harrison. "We're going to continue to have that long-term fundamental drive on markets, and short-term headline drive on markets," said Harrison. She expects the short-term to be centered around tariffs and conflict in the Middle East and long-term related to Chinese demand and supply from Opec+ nations. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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