A Plug in the Pipeline: Keystone XL Revival Tempered by Tariff Talk

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Canada disavows its U.S. dependence while Trump applies trade leverage in affirming that to the victor goes the oils.

President-elect Donald Trump has vowed to issue a day-one executive order to restore federal approvals for the proposed Keystone XL Pipeline while also pledging to slap tariffs on Canadian imports.

“It’s kind of a confusing moment,” Toronto commodity analyst Rory Johnston, founder of CommodityContext.com, told The Epoch Times.

“You have, on one hand, [Trump] saying he wants free trade to reduce energy prices for consumers, while at the same time, on the other hand, threatening to throw tariffs on the barrel that would, presumably, flow through that pipeline, increasing prices for consumers.”

Trump has the leverage to play both hands. In 2022, Canada exported 82 percent of its crude oil, according to Canada Energy Regulator, with more than 83 percent of that export volume sent to the United States.

The president-elect’s musings about imposing a 25 percent tariff on Canadian imports shows he’s applying that leverage, Johnston said, which has “everyone north of the border” discussing strategies “to further diversify our risk away” from the United States because, right now, nearly all pipelines beeline south.

The Canadian Association of Petroleum Producers referred The Epoch Times to a Dec. 18 Op-Ed by its president and CEO, Lisa Baiton, that calls for the Canadian government to invest more in expanding the nation’s domestic capacity to refine and ship crude.

Canadian producers annually sell more than $150 billion in petroleum products to the United States, “our biggest, and in some cases, only customer for almost every good this country produces,” she writes.

That relationship no longer works, Baiton said. “Because of this reliance on one customer, Canada has little negotiating power with the Americans,” she writes, calling for initiatives to “build a tariff-proof economy.”

“It’s time to build more transportation routes to new markets, LNG export facilities, pipelines and port expansions, so we are no longer beholden to a single customer,” Baiton said.

Johnston said “it is possible” Trump’s promised executive order will quickly induce Canadian producers into resubmitting a new pipeline proposal to open more pipeline access and broaden shipping capacity.

By John Haughey

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