Authored by Zainab Calcuttawala via OilPrice.com,
Alberta Premier Rachel Notley warned U.S. President Donald Trump that he would face the wrath of the northern nation’s many allies if the freshman president begins employing energy trade restrictions with Canada.
Notley is currently in China, negotiating her country’s trade policies with the Asian giant. She told reporters that she did not know what was meant by Trump’s comments about what Canada has done to its American neighbor with the energy, softwood lumber, and dairy industries.
“Canada, what they’ve done to our dairy farm workers, is a disgrace. It’s a disgrace,” Trump said before signing a memorandum about investigation the national security implications of importing foreign steel.
Trump also criticized NAFTA in general, calling it a “disaster”, adding that that “included in there is lumber, timber, and energy. We’re going to have to get to the negotiating table with Canada very, very quickly”
“We’re not exactly sure what it is he was referring to,” Notley said in a conference call Monday, according to The Huffington Post.
“The leadership of the U.S. administration is going to find that they have a lot of their own stakeholders reminding them how much they need Canadian energy,” she said.
Figures from 2016 show that 41 percent of all American crude imports, or 3.3 million barrels per day, came from Canada.
Trump has suggested ambiguous “very big changes” to the North American Free Trade Agreement (NAFTA), which strings together Mexico, Canada and the U.S. through a uniform tariff policy. Opponents of the trade bloc created by the 1994 deal say it caused the growth of the U.S. trade deficit with its northern and southern neighbors, along with considerable job losses.
The U.S. is the largest refining complex in the world, and Canada’s cheap heavy oil pricing relative to other competing crude grades in the West Coast and Gulf Coast has made a lot of profit for U.S. heavy oil refiners. If Canada is planning on exporting 890,000 barrels per day of crude oil to the large refining markets of the Asia Pacific with a preference for heavier crude oils, this will inevitably hurt U.S. heavy oil refiners that benefitted from refining cheap Canadian heavy crude.
