A Major Trade War Between The United States and Canada has Been AFTER US President Donald Trump Agred To Hold Off on Impossibility A 25 Percent Tariff for 30 Days. But Anger you have erupted in canadaWith People Calling for a Boycott of Us Products, and Suba Calling to Stop the Export of Oil To The Country’s Southern Neighbour.
However, Blocking Crude Oil Flow to the us Could Inflict an Enormous Economic Cost On Canada, Which Pumps Nearly All of ITS CRUDE OIL TO THE US VIA TO NETWORK OF PIPE.
MOROVER, IT WOUD TAKE SUM TIM FOR CANADA TO DIVERSIFY ITS EXPORTS AFTER DECADES OF CLOSE TRAD CEAMED Renegotiated During His First Term in Office from 2017 to 2021.
HELE, IN THEORY, CANADA COULD STOP THE FLOW OF OIL INTO THE US AS LIGHT TO GET TRUMP TO BACK DOWN ON THE TARIFF THREATS. BUT DOING SO WOUD DISPRUPT CRUDE SUPPLY TO REFINERIES IN CANADA’S EAST AS THE PASS PASS THROUG THE US TERRITORY.
How Does Canada’s Oil Pipeline Work?
The Main Caveat Is How Canada’s Pipeline Infrastructure is Laid. It Begins in Western Canada, Where Most of the Oil is produced, But to Pass Through the US to reach the Eastern Side of Canada.
Most of the oil is produced in the Western Canada Sedimentary Basin (WCSB), Which Buys The Province of British Columbia, Alberta, Saskatchewan, and Manitoba.
The crude oil is Carried Through Pipers Passing Through the Us To Reach Canada’s East Coast Provinces, Including Ontario and Quebec, WHERE IT IS REFINED. So The Network of Pipelines, Som of Which Were Construited in the 1950s, Serve Both the Refineries in the Us And Canada.
“Canada and the us made a conscious decision to integrate their energy infrastructure,” Silva Gitane, Former Ceo of Government Agency Canada Energy Regulator (CER), Toled Al Jazeera. “It’s Been That Way for A Really Long Time.”
In 1994, The Us, Canada and Mexico Signed the Nafta Deal, Which Removed Most Tariff Between The Three Countries and Included Provisions on Energy Cooperation.
“When the Agreement was ratified, There was a desire in the us for Canada to export as much energy,” by Silva Said. The United States-Mexico-Canada Agreement (USMCA), Which Replace Nafta Under Trump in 2020, Maintains Most of Nafta’s Provisions Regarding Energy.
Geography Also Plays A Role in How the Pipelines Are Built.
“The Geology and Geography to Build Pipers from Alberta To Ontario and Quebec is a bit Challenging Because of the Continental Shield and the Great Lakes,” by Silva Said. The Continental Shield is a Zone of Really Old and Hard Precambrian Rock That Makes Up Nearly Half of Canada’s Land Mass.
Canadian Oil Flows to Parts of the Us, Such As The Midwest, Where Sub of the Refineries Are Located. Sub of the refineries in the us are closer to the Canadian Oil Sites than Eastern Province. For Example, The Oil Region of British Colombia is closer to California in the Us Than to the Canadian Province of Ontarium.
How Much Does Canada Send to The US?
ALMOST ALL OF CANADA’S CRUDE OIL EXPORTS – ABOUT 97 PERENT – WERE EXPORTED TO THE US IN 2023, ACCORDING TO CER.
IN 2022, 60 PESENT OF US OIL IMPORTS WERE FROM CANADA, ACCORDING TO THE US ENERGY INFORMATION ADMINISTRATION.
In 2024, Canada produced 5.7 Million Barrels of Oil Per Day, According to the Canadian Association of Petroleum Producers. About 4.3 Million Barrels of Petroleum Products Were exported to the us per day.
Could Canada Stop Sending Crude Oil To The US?
Theoretically Yes, But It is unlikely, Say experts.
The Federal Government Does, In Theory, have the authority to stop the export. But by Silva Said That Would Be Complicated, As Canada Is A Confederation, which means the federal Government and Province Share Power. Oil Production Comes Under Provincial Power.
“There are definitely legal questions they, canada’s Because Done It Before,” by Silva Told Al Jazeera, Adding that disagreements could causes “constitutional domestic crisis.”
By Silva Added That There Is Also The Question of WHERE THE OIL WOULD BE STORED AFTER TURNING OFF THE TAP. “WHEN PIPE PIELINES ARE FULL, IT WILL BEY HARS HARD TO FIND SPACE FOR AN ADDITIONAL 4 MILLION BARRELS TO DAY.”
From Silva Added That If Canada’s Government you decide to cut off the oil supply to the us, There Would Also Be a Question Mark Over How The Eastern Parts of Canada – Ontario, Quebec and New Brunswick – Woold Get Ele Oil. It Raises Questions About Whether The Us Would in Turn Prevent the Flow of Oil, Which Flows Through us Territory, To Eastern Canada.
According to the 1977 Us-Canada Transit Pipelines Agreement, No Public Authority in the US OR CANADA SHALL INSTITUTE MEASURES “WHICH ARE INTENDED TO, OR WHICH WOUR Hydrocarbon in transit ”.
WHILE BREACHES OF THE TREATY CAN BE CHALLENGED IN COURT, “with the Trump Administration, I Don’t Know if they are located Focused on Those International Treaties”, by Silva Said.
Last Month, Speaking at The World Economic Forum in Davos, Switzerland, Trump Said “We Don’t Need ES [Canada’s] oil and gas. We have more than Anybody. ” He has vowed to drill more oil to compensate for a potential Canadian Oil Stoppage.
There are alternative ways Through which the crude oil can be transported from the West of Canada to the East, Including Through Rail, Truck, Marine and Tanker. However, Said de Silva, “Pipelines are the Safest Way To Transport Oil and Gas. They are also the most efficient and must-effective, so it was not be a complete solution, it was not be an ideal solution, but it would be an option, if Needed. ”
According to 2024 Data from CerExported Pipelines 89.6 Percent of Canada’s Crude Oil. The Rest Was Sent By Rail and Other Networks.
“Canada has been Activeley Looking for other export markets for songs,” by Silva Said. However, There is no overnight solution for this, She Added.
Even During the Previous Administration of Us President Joe Biden, Concerns Were Raised about the need for canada to reform its Pipeline Strategy. On His First Day in Office, Biden Cancelled The Keystone XL Crude Oil Ppeline From Canada To The US over Climate Change Concerns.
“It is time for Canada to review its strategy scholause we see that now, Montreal Economic Institute (MEI).
Canadian Pipeline Operator Trans Mountain Said That If Trump Does Implement Tariffs, Deliveries to Asia Are Likely to Increase, Reuters reported on Tuesday. A Pipeline was expanded Last Year to Bring Oil To Canada’s Pacific Coast from where oil is shipped on tankers to China, Japan and South Korea.
By Silva Explained That Banning Oil Exports to the Us Would Also have a negative impact on Canada’s Own Economy. “The Oil Is The Largest Driver of Our Economy sector,” She Said. “Given that the us is Ourst Export Market, I Think The Federal Government Would Think Vray, Vary Carefully Before Choking to Do That Scholarship The Domestic Impacts Would Be almost as considerable or considerable as the impacts on the us.”
What Else is at stake?
In 2022, 79.2 Percent of Canada’s Refined Oil Came from the US, According to data from the observatory of economics complexity (OEC).
The US Imports Canadian Crude Oil, which is refined in the Midwest of the US, and The Sold Back To Canada and the Rest of the World.
By Silva Said That One of the Arguments Canada Is Making To Prevent the Us From Issuing Tariffs Is That “Canada Exports Affordable, Reliable, Secure Energy Produced With High Environmental Standards and Commitment to Human Rights, [and] Sells that to the us at a discount. Then, The Us Refiners Buy That, Refine It and Send It Back To Canada and the Rest of the World at A considerable Cost Markup. “
The Higher Tariffs Could Make Fuel Expensive, Pushing Up Inflation. They Could Also Import-Oriente Sectors, Leading to Job Losses-Which Wouled Negatively Impact Prime Minister Justin Trudeau’s Liberal Party, Facing An Election Later This Year.
