The Current - What will the U.S. push for ‘energy dominance’ mean for Canada?

Episode Date: March 13, 2025

Donald Trump’s administration wants to create a new era of “energy dominance” in the U.S., by ramping up energy production to bring cheap power to more Americans. What will this mean for Canada's oil and gas sector? CBC business reporter Kyle Bakx went to CERAWeek, the “Super Bowl” of energy conferences, to find out what the industry is thinking.

What does a mummified Egyptian child, the Parthenon marbles of Greece and an Irish giant all have in common? They are all stuff the British stole. Maybe. Join me, Mark Fennell, as I travel around the globe uncovering the shocking stories of how some, let's call them ill-gotten, artifacts made it to faraway institutions. Spoiler, it was probably the British. Don't miss a brand new season of Stuff the British Style. Watch it free on CBC Gem. This is a CBC Podcast. Hello, I'm Matt Galloway, and this is The Current Podcast.

We are unabashedly pursuing a policy of more American energy production and infrastructure, not less. That is U.S. Energy Secretary Chris Wright. This week, the who's who's of the energy world are in Houston, Texas. This annual industry summit is more politically charged, as you can imagine, than in years past. Donald Trump's administration is keen on ramping up oil and gas, or as they put it,

drill baby drill. In the meantime, Canadian politicians and business leaders are also in Texas trying to navigate tariff threats and find opportunities for the country's resources. CBC business reporter, Kyle Bax is in Houston, Texas for this. Kyle, good morning.

Hi there, Matt. What exactly is this conference? What goes on down there in Houston? It's a big influential event in the energy world. It attracts governments, industry leaders by the thousands. Canadian companies, big and small, regularly attend, from the major oil producers to clean tech startups. Several years ago, Justin Trudeau made the trip to Texas and he even received a standing ovation after delivering a speech during Sierra Week. Of course, that was several years ago

now. The event is very formal. Everyone buttoned up in suits, even though it's here in Texas. The only person I actually saw wearing a cowboy hat was an Alberta government worker who's attending. It's pricey too. A ticket for someone from the private sector to attend is more than $10,000. from the private sector to attend is more than $10,000. The experience of Sierra Weed can be dizzying. Five days of never ending speeches and events, topics ranging from oil and gas demand in the US to the latest geopolitical tension, even the race to build the first fusion power plant. It's like a firehose of information and opinions from around the globe. And as a journalist, it's fantastic.

And there are government meetings too. This week, Canadian federal officials take talking trade with Mexico, the European Union, and of course, the Americans. It's a big event. There is reason, Matt, that it's nicknamed the Super Bowl of Energy conferences. Super Bowl is a big party. What is this party like? I mean, what's the mood there? These are interesting times right now.

Yeah, not popping the cork on champagne, but boy, there's a lot of excitement here. There's so much happening right now in the energy sector, and many of the people here from around the globe, they have an eye on the new US administration. The Republicans are back in the White House. So there's lots of interest in what happens now and over the four years ahead. Under former President Joe Biden, the US was focused on producing more energy without

a doubt. And now under President Donald Trump, that still is the case, except the new government is laser focused on certain types of energy, mainly oil and natural gas. What are you hearing from Canadians who are down there? They want to know exactly what the priorities are and how fast or slow this new administration will move. Canadian industry and government officials are confronting the tariff situation while also trying to be a key supplier of energy to support the United States. It's our biggest customer. It always has been. Federal Natural Resources Minister Jonathan Wilkinson, he made the trip down to the conference this week. I think it's a very sad statement that we have arrived at this place.

We need to find a pathway back to a better conversation and honestly, everybody is suffering and certainly Americans are suffering. I mean, $4 trillion is wiped out of the stock market in a couple of weeks. That's not a good thing for the United States and it's not a good thing for Canada. The fact is, the US may want to be energy dominant all by itself, but in reality it relies heavily on Canada. Canada is the largest supplier of oil to the US by far. Refineries, especially in the Midwest region, are specially built to take our thick gooey oil and turn it into gasoline, diesel, and jet fuel. For electricity, many US states need power

from provinces like Ontario and Quebec. The same for other energy sources like natural gas. Even nuclear power, the majority of the uranium used in US nuclear power plants comes from Saskatchewan. So because of all this, the Canadian industry and government officials here are pushing for more investments and partnership to grow that trade even further. This all happens of course under that tagline of drill baby drill that the Trump administration has been trumpeting since long before you even came back into office. How are you seeing that and how are you hearing that in Houston? You know there's this new vision of what the White House is calling American energy dominance.

It's a phrase that's repeated quite a bit. The mission ramp up energy production to bring cheap power and fuel to more Americans and to countries around the world. So not just drill baby drill, but also build baby build. There's a huge push for construction of infrastructure and not just pipelines but massive transmission lines, power plants and everything else needed to not only produce more energy but move it around the country. The US Energy Secretary Chris Wright spoke about needing all types of energy, oil and natural gas and plenty of electricity,

especially nuclear and geothermal. That said, the White House is clearly not as interested in wind and solar power or even developing hydrogen. What about the folks in the oil and gas industry? I mean, to that point, what are they saying about this push coming from Trump and others for more production? You might think this would be music to their ears, having a cheerleader in the White House. And in some ways it is, you know, the industry likes having supportive governments that could reduce regulations. But governments can only do so much to spur production. Ultimately, companies are the ones that make bets based on price, and oil prices have taken

a dive. The value of North American crude is down about $15 US per barrel over the last two months. That's a 20% drop since around the time Trump took office. With lower oil prices, companies are less interested in spending big bucks to produce more oil. Part of the reason prices are slumping is because there are growing concerns about the economy. The tariffs could result in higher inflation in the United States. The deportation efforts could lead to labor shortages in big industries like agriculture and construction.

The stock market has been losing value as well. So yes, Matt, Trump may want these oil companies to drill baby drill, but his own policies are putting some sand in the gears. It's a tricky question to ask because it changes second by second, but where do things stand at this present moment on Trump's promise of tariffs on Canadian oil and gas?

Well, as you'd expect, it's top of mind for lots of people here. There was actually a little moment of levity earlier this week. Three provincial politicians, they actually took the stage for a panel discussion in front of a standing room only crowd. And the opening question by the moderator was this. Where to start? Tariffs. I wish I was joking, right? It's kind of an uncomfortable question. Well, I'll tell you, it was quite the moment.

There was some laughter, but make no mistake, that was the only time there were smiles on that particular stage. You could feel how fed up those Canadian politicians were with this ever-changing tariff situation. As for where we're at with tariffs, you know, earlier this week it wasn't very clear. You know, the White House previously had put a 10% tax on energy imports. Some days later it exempted certain materials that follow the free trade agreements. And that led to confusion about whether oil and natural gas were exempt or not. People in industry and analysts were not clear. The US Secretary of Energy, he

was vague when he was pressed by reporters here in Houston, only to say active conversations were underway. And certainly it's possible that tariffs could be waived by April 2nd. He avoided discussing any details. Finally, it was Federal Natural Resources Minister Jonathan Wilkinson providing clarity to us on Tuesday, saying the bulk of Canadian oil and gas is not subject to tariffs right now, at least for this moment. And some other forms of energy though are still facing tariffs, but the situation as you say keeps changing. Hey, I'm Gavin Crawford, host of Because News, Canada's funniest news quiz. If you find yourself having a hard time tuning into the actual news,

why not let us help by making it a bit more fun. Each week here at Because News, we have some fun with the headlines, games, riddles, altered lyrics, voices, and more. It's like dropout, but with news. Subscribe today on Spotify to never miss an episode. Why? Because News. It's not just federal politicians who are down there. You mentioned provincial leaders as well. How are they responding to what's going on right now and the fight such as it is between Canada and the United States? They voiced their clear frustration about the situation. Not nearly the anger of Premier Doug Ford this week. Instead their tone was stern stern but restrained. They tried to be polite in typical Canadian fashion, but they sure are fed up. Alberta Energy Minister Brian Jean said, friends don't do this to friends. Ontario Energy Minister Stephen Lecce says he's offended by the US tariffs.

And Saskatchewan Premier Scott Moe says he understands the anger but says we need to be smart. The current conversation that we're having is doing nothing to benefit the North American family and North American industry in the way of inflationary pressures, probably job losses if this continues to escalate the way it is. And so I think it would do us all well to think about what do we want this relationship, this North American relationship to look like when the dust settles and all of us start making decisions to find our way to that point.

How is what Scott Moe is saying landing with Americans? People here are very much interested in Canada. It's a mainly American audience. They don't really need to be convinced that the tariffs don't make a lot of sense. Everyone I've talked to and who I've heard on stage either oppose the tariffs or they're genuinely confused why the US administration is doing this to a long time ally. Take this one moment. The biggest energy lobby groups in America all were on stage one evening sitting right beside each other in white leather chairs under the bright lights these are

the associations representing the natural gas industry the nuclear sector clean power and all the big oil companies each one said the same thing they rely on what Canada has to offer they believe in free, and they want the White House to stop the tariffs. The oil association, it's called the American Petroleum Institute. It's the largest oil lobby group in the world and is a big supporter of Trump. Still, its members are against the tariffs. The group's president is Mike Summers. We're working closely with the Trump administration so they understand how important trade is and that free trade has worked the group's president is Mike Summers. get their crude oil from Canada at, by the way, a 20% discount that is then refined in American refineries

by American workers and then sold to Americans utilizing that 20% discount. So Americans benefit greatly from our trade with our partner to the north in Canada. Kyle, you mentioned a couple of provincial politicians down there. You did not mention the premier of Alberta, Danielle Smith, but we know she's there as well. What is the message that she has had to

attendees at this conference? It's a different approach. She's all about working with the Americans, not looking to vent any frustrations about tariffs. You know, if you can either take a good cop or bad cop approach, she admitted she wants to be a good cop and be friendly with American politicians. she wants to be a good cop and be friendly

with American politicians. And she's talking a lot here about the potential of sending more oil and gas to the US. To get that message across, the Alberta government is a sponsor of Sierra Week, and it set up what it calls Alberta House here. So when attendees arrive at the big conference site and they walk through the main glass revolving doors, they see bright blue Alberta flags and posters of the Rocky Mountains. The space is a hotel lobby bar. But for this week, the lounge is all decorated to promote Alberta and its

energy industry. Alberta government workers are even handing out these leather Alberta key chains. Earlier this week, Smith spoke at Alberta House and says she wants to get back to building what she calls a North American energy security juggernaut. I want to show them the future that could be if we have a tariff-free relationship. I think that there's a number of different pipeline projects that would allow us to increase

the amount of oil coming to the United States if they're interested in partnering with us. And so I want to just put that on the table. But of course, none of those conversations can begin in earnest while we're in the middle of a tariff fight. Pete Slauson Daniel Smith is talking there specifically about pipelines. How realistic are those new projects that she's speaking of? That is hard to say, and here's why.

Currently, none of the major oil pipeline companies have said they're actively pursuing any new Canadian export pipelines, not a single one. That's because of how long and expensive it would be to pursue one of those projects. We're talking five to ten years to develop and build and tens of billions of dollars. And is the company wanting to take that risk? Right now the companies are answering no.

That said, there are efforts underway to expand and push more oil through pipelines that are already built. Let's take the new TransMount expansion pipeline. It began operating last year, moving oil from Edmonton to a Vancouver area port. As a result of this tariff issue, demand for that pipeline is increasing. The federal government still owns the project. We caught up with the Crown Corporation CEO, Mark Mackey, here in in Houston in a room with large glass walls facing the city's downtown towers. The whole point of the TransMound pipeline he says was to reach new markets. That thesis is still there and especially now with the

talk of tariffs. Having more markets separate and apart from the US is good for the country. So yes it has increased the importance at us of looking at expansions in our pipeline. And so we are doing that. So it's a relatively new pipeline, but already talk of expansion. And if you want to know how to expand a pipeline, you don't actually make the actual pipe any bigger, but instead add more horsepower to the pumping stations and use drag reducing agents. So, more oil can move through the pipe at a faster speed. And as a result, instead of shipping about 900,000 barrels of oil every day through that pipeline,

that number could jump by 300,000 over the years to come. That's a third more oil. This is something I did not know. You are at one of the biggest oil and gas conferences in the entire world. What is the talk there in, in everything that you're speaking about, what is the talk there about climate change in those rooms that you're in? Trump is focused a lot on trade and on drilling for more oil, but he's changing the conversation

in another way as well. The president's actions against climate could have ripple effects around the world. The U S has pulled out of the Paris Accord, the IRA is under attack, that's the big clean energy bill by former President Joe Biden, and many other environmental policies like EV subsidies are getting cut. Altogether, hundreds of billions of dollars in clean tech and low emission energy projects could be impacted.

If we take a step back, it's worth noting climate action was already losing some steam. Even here at this conference, it's noticeable. A few years ago, a main focus was the energy transition and low carbon energy. Last year, the focus shifted to talk about energy security. Now it's all about producing more energy, all types. Big picture, let's face it, climate action was losing some momentum and Trump arrived in January and really stomped on it with his actions. And just listen, his energy secretary, Chris Wright, a self-proclaimed climate realist.

The Trump administration will treat climate change for what it is, a global physical phenomenon that is a side effect of building the modern world. We have indeed raised global atmospheric CO2 concentration by 50% in the process of more than doubling human life expectancy, lifting millions of the world's, lifting almost all of the world's citizens out of grinding poverty, launching modern medicine, telecommunications, planes, trains and automobiles too. Everything in life involves trade-offs, everything. A climate realist, that's a really interesting turn of phrase. To what degree is the industry backing away

from those climate commitments? That's the politicians, what about the industry? It's happening in a lot of corporate boardrooms. Let's take BP, the global energy company. Five years ago, BP set some of the most ambitious targets among large oil companies to cut production of oil and gas by 40% by 2030 and significantly ramp up investment in renewables. Since then, it's been slowly walking that back and now it's thrown that

plan out the window. BP is shifting investment from renewable energy back to oil and gas. BP's CEO here at Sierra Week described it as a reset for the company and said, why? Many countries want more oil and gas to ensure affordability and energy security, especially with inflation and all the geopolitics in the world right now. And that said, there are still other companies and lower levels of US government focused on keeping emissions low. I caught up with Samantha Gross. She's a regular here at Sear Week. She's with Brookings, a DC based think tank. She says a lot of companies are making decisions now looking far down the road. And she also says states and small community

governments, they're also going to be pushing forward with climate policies. So like many of Trump's desires, some of them are taking place while others may not materialize, but he still has a huge impact. Kyle, I'm going to let you go, but just finally, I mean, how is all of this, what you're hearing there, but all of the tariff talk, the 51st state talk, how is that changing the conversation

around Canadian energy? You know, it's pretty clear the trade war is, is unifying the country and there is a willingness now to actually focus on what Canada needs, especially in terms of infrastructure, whether that's transmission lines across the country or more pipelines. When I spoke with Jonathan Wilkinson, he isn't

so sure about the pipeline issue, although he's keeping an open mind right now. For Canada, it's still not clear whether this trade war will have any impact on the country's various governments taking action toward changing energy production or building new infrastructure. Matt, at least not yet. Kyle, thank you very much for this. Thank you.

Kyle Bax is a CBC Calgary Business Reporter. He was in Houston, Texas.