RUSS: Oil and gas go from zeros to heroes in Ottawa amid Trump tariff threat

What a switch-up there has been in Ottawa. Once the openly stated or implied black sheep of the Canadian economy, oil and fossil fuels are now front and centre to Ottawa's efforts to stave off Donald Trump's tariff threat.Since 2015, the Liberal government has brandished the sword of fighting climate change and keeping oil and gas projects to a minimum. While Liberal pundits and partisans will point to the Trans Mountain pipeline expansion (TMX) as evidence of their balanced approach, it is the only major oil and gas project made operational during Justin Trudeau's premiership.Furthermore, TMX was approved under Stephen Harper, as were all the major energy projects set to be brought to completion in the short-term, like Cedar LNG in Kitimat. There were still many energy projects that were cancelled over the past decade that Canada could really use right now, such as the Energy East and Northern Gateway pipelines.Prior to Trump's victory in the November presidential election, Energy Minister Jonathan Wilkinson had even played the card of the "peak oil" canard to discourage oil and gas development.The oil and gas sector is the permanent scapegoat for climate change during normal times of plenty, but always gets a break during national emergencies and is thrust into the role of Canada's lifeline. Double standard barely begins to describe it.Wilkinson flew to Washington this week to make the case for an "energy alliance" between Canada and the United States. The minister rightfully pointed out that much of the US depends on heavy crude oil, almost entirely produced in Alberta, that is pumped south across the border.Furthermore, Wilkinson added that Canadian natural gas and critical minerals supply and power American industry and meet their energy needs. His argument boiled down to the following: Canadian energy is essential to the energy security of the US.As a representative of the federal government, Wilkinson's championing of an "energy and resource alliance" is a sharp right turn away from talk of "peak oil" and "net zero." Since 2015, the Liberals have not shied away from the fact that they aggressively seek a greener Canada and have made it very hard for oil and gas producers to build on their existing infrastructure.Whether it be controversial and unpopular carbon pricing, suffocating green regulations, or brutalizing delays, building oil and gas networks has been very difficult this past decade.Take the purchase of TMX in 2018 for what was then just $4.5 billion, which Finance Minister Chrystia Freeland justified as a "serious and necessary investment." The Liberals slung so much red tape and uncertainty at the project that Kinder Morgan soon pulled out after starting work on the project.Prime Minister Trudeau himself called TMX the way to open new markets, allowing Canada to diversify away from reliance on the US, the destination of nearly every drop of exportedCanadian crude oil. These may sound like the words of a fervently pro-fossil fuel government, as did Ottawa covering the eventual $34 billion cost, but that would be a mistake.As noted, the federal purchase of TMX was the option of last resort for a government that far preferred renewables. Ensuring the completion of just one pipeline project in the most inefficient, costly way is not indicative of a government that is in the corner of the oil and gas industry.The shift has been remarkable now that Ottawa has been faced with the reality of Canada losing near-unfettered access to US markets when it comes to petroleum and its derivatives, the largest share of Canadian exports by far. Wilkinson explained that cutting off Canadian oil will lead to far more expensive gas prices in the American Midwest, while tariffs on Canadian energy more broadly would make inflation worse for Americans.Canadian oil has been revealed to all for what it is: essential.The total value of Canadian oil and gas exports in 2022 was $123 billion. Automobiles, the second-largest pool of exports, came out at just $29.4 billion by comparison. Projects such as TMX and Cedar LNG are the lifeblood of the Canadian economy, not electric vehicle manufacturing.Both are under tremendous threat from Trump's incoming tariffs, which forecasters say would plunge Canada into a recession by mid-year. Energy is one of Canada’s most powerful tools for pushing back during negotiations.For now, oil and gas are heroes, but will they still be once this tariff affair subsides? It is time to end this double standard once and for all.

RUSS: Oil and gas go from zeros to heroes in Ottawa amid Trump tariff threat

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