Canada to boost energy exports to U.S. to aid in supply crisis triggered by Russia's war in Ukraine - The Globe and Mail

By the end of this year, Canadian producers will be positioned to export an extra 200,000 barrels a day of oil to the U.S., as well as natural gas equivalent to 100,000 barrels of oil.Todd Korol/Reuters

Canada says its producers can boost exports of oil and natural gas to the United States this year, as part of an international effort to help the world move away from Russian energy after Moscow’s invasion of Ukraine.

By the end of this year, Canadian producers will be positioned to export an extra 200,000 barrels a day of oil to the U.S., as well as natural gas equivalent to 100,000 barrels of oil, Natural Resources Minister Jonathan Wilkinson said during a conference call from Paris on Thursday after a meeting of the International Energy Agency (IEA).

The increase is intended to free up oil and gas supplies in the U.S. and elsewhere, so that those countries can in turn reroute fuel to the European Union, which relies on Russia for roughly one third of the oil it consumes, and 40 per cent of its natural gas.

The anticipated rise in Canada’s oil and gas exports would be relatively small, but Mr. Wilkinson said every bit counts in the effort to strengthen global supplies outside Russia. He estimated that the extra Canadian oil exports to the U.S. would represent an increase of five per cent over existing shipments.

Canada is limited in its ability to make big gains in oil and gas output owing to scarce new export pipeline capacity.

“It will take some time to fully move away from Russian oil and gas for some of these countries like Germany that are quite heavily dependent,” Mr. Wilkinson said. “Any additional amounts can help to start that process.”

Europe’s reliance on oil and gas supplies from Russia is a situation the North Atlantic Treaty Organization and the IEA are pushing hard to reverse. Canada, the U.S. and the United Kingdom have already banned Russian oil products in the weeks since the start of the Ukraine invasion, but the European bloc’s need for Russian fuel for heat and power has made it reluctant to do the same.

“Canada stands in steadfast support of the Ukrainian people and our European friends and allies,” Mr. Wilkinson said. “We need to ensure that we are thinking about both energy security and climate change concurrently.”

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Calgary-based Enbridge Inc. ENB-T said in a statement that while there are constraints in its pipeline export capacity, company officials have been talking to government representatives about ways to alleviate the energy crisis.

“Enbridge is pleased the government of Canada is taking steps to advance global energy security and the transition to a net-zero emissions economy,” the company said.

Environmental groups criticized global efforts to bolster oil and gas supplies outside Russia. “Corporate interests are cynically seizing on this moment to push forward an agenda to entrench fossil fuel dominance for decades to come,” said Food & Water Watch, a Washington-based non-governmental organization.

Canada’s export capacity is not limited only by a lack of pipelines. The country’s first major liquefied natural gas terminal capable of exporting the fuel in tankers, Shell PLC-led LNG Canada, is still under construction. The $18-billion terminal in Kitimat, B.C. will ship liquefied natural gas to Asia. It won’t open until 2025 at the earliest.

A practical roadmap for achieving independence from Russian fuels has been the subject of “intense back-and-forth” in recent weeks, U.S. National Security Advisor Jake Sullivan told reporters this week.

The U.S. and the European Commission are expected to release more details on an energy security plan soon, but Mr. Sullivan said replacing Russian exports is not simply a matter of diverting liquefied natural gas in the short term. Rather, it will involve structural changes aimed at creating more flexibility for different policy choices in Europe. It will also mean increasing U.S. liquefied natural gas supplies to the continent over the coming months and years.

IEA executive director Fatih Birol said all member countries came to the organization’s summit this week armed with plans, policies and various other tools to reduce reliance on Russian oil and gas.

“They were different policies, different measures, different timelines, but one single target – reducing, radically, Russian oil and gas imports,” he said.

Prime Minister Justin Trudeau said following a G7 summit in Brussels on Thursday that, despite Canada’s role in helping wean Europe off Russian oil and gas, the federal government remains committed to hitting net-zero carbon emissions by 2050.

“Indeed, the partnerships we’re looking at building with the European Union – on issues of hydrogen, on issues touching renewables – are very promising in terms of getting the world not just off Russian oil and gas, but decarbonizing our energy economy entirely,” he told reporters.

Mr. Trudeau said in a joint statement with European Commission President Ursula von der Leyen that officials will meet this week to discuss enhancing energy-related co-operation and eliminating the European bloc’s dependence on Russian energy.

“A dedicated working group on green transition and LNG is being created to develop a concrete action plan on these matters,” the statement said.

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2022-03-25 00:37:24Z
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