‘Up your nose with a rubber hose.’ Or at least a steel one.
Calgary’s oil industry groups are calling on the Canadian government to build “retaliatory” pipelines to all three coast to broaden markets and blunt the effects of the American administration’s declaration of economic war and US president Donald Trump’s 10% tariff on oil and gas that took effect Tuesday.
“A bold and necessary action that the Canadian government should take to respond is to build retaliatory pipelines to diversify our economy to other markets beyond the United States, growing our economic power and supporting Canadian values,” the Explorers and Producers Association of Canada (EPAC) said in a statement.
After years of dithering, industry leaders say the tariffs underscore Canada’s over-reliance on the US as its primary energy market and highlight the urgent need for new export routes to Asia and Europe to ensure long-term economic security.
That’s because 4.2 million barrels per day (bpd) of Canada’s 5 million bpd of production is funnelled overland to refineries south of the 49th parallel, representing 98% of the country’s oil exports worth USD$125 million — about 16% of its total exports.
The Canadian Association of Petroleum Producers (CAPP) also condemned the tariffs, warning they will disrupt trade flows and put Canadian producers at a disadvantage.
“As Canadians, we must now recognize the relationship with our closest friend, ally, and trading partner has fundamentally changed,” CAPP president Lisa Baiton said in a statement. “Without greater global market reach and energy security, Canada has little leverage in our trade relationship with the United States.”
“Strengthening market access and trade relationships is critical to economic growth,” the group stated. “Diversifying exports beyond North America will promote long-term stability.”
The impact of the tariffs will also be felt south of the border.
GasBuddy analyst Patrick De Haan predicted a sharp rise in gasoline prices in the northeastern states, where much of the region’s refined fuel comes from Canada’s Irving Oil refinery in Saint John, New Brunswick.
“By mid-March 2025, the Northeast could expect fuel prices including gasoline, diesel, and other petroleum products to be 20-40 cents (US) per gallon higher,” De Haan wrote.
De Haan noted that many US refineries are configured to process heavy Canadian crude, making an immediate shift to domestic American oil difficult. “It’s like asking someone with a diesel truck to suddenly fill up with regular gasoline,” he said.
Alberta Premier Danielle Smith, who previously tried to coddle The Donald, was still reluctant to ‘turn off the taps’ as threatened by Ontario’s Doug Ford. But after fawning visits to Mar-a-Lago, Smith was suddenly talking tough.
In American media interviews she said the tariffs have forced Canada to rethink its export strategy.
“Before the tariffs, I would have loved to double the amount of oil we sell to the United States," Smith said in an interview on CNBC. “Now we’re going to have to look at selling more off the West Coast, the East Coast, and up north because if the Americans don’t want our products, the rest of the world does.”
Meanwhile, EPAC) said the tariffs highlight the urgent need for Canada to build new energy infrastructure.
“This crisis demonstrates the clear and urgent need to take immediate action to build natural resource infrastructure and diversify our economy beyond the United States,” EPAC said. “We can no longer afford to proceed with major energy projects at a slow and costly rate.”
Both EPAC and CAPP say Canada stands at a crossroads and must decide whether to become a global energy leader or continue to fall behind.
“With decisive leadership, smart reforms, and a renewed commitment to investment, we can unlock the full potential of our natural resources, support our partners and make new ones, create jobs, and build a more prosperous and resilient economy for Canadians,” CAPP stated.