Can Canada and the United States Maintain a Profitable Oil and Gas Relationship?

As we near the inauguration of President-elect Donald Trump, increasing reports from Canada indicate that the administration of Prime Minister Justin Trudeau is moving away from fossil fuels as quickly as the country is able. With the Trump administration publicly focused on ramping up energy production and refinement, one has to wonder how these seemingly opposing world views will impact the historically amicable relationship between the two nations.

What’s So Important About the US and Canada’s Oil and Gas Relationship?

According to the Congressional Research Service, the oil and gas industry in Canada and the United States is linked at its foundation: “The United States and Canada, while independent countries, effectively comprise a single integrated market for petroleum and natural gas. Canada is the single largest foreign supplier of petroleum products and natural gas to the United States—and the United States is the dominant consumer of Canada’s energy exports.”

In short, the two country’s oil and gas industries are tied together, which means that a peaceful working relationship is of the utmost importance.

Trudeau’s Environmental Push Will Be Very Slow

Last week, Canadian Prime Minister Justin Trudeau came under fire when he proclaimed that he intended to phase out oil sand extraction in favor shifting towards green technology. The comment immediately drew the ire of residents across the nation, including in Alberta, where thousands of people in the province rely on the oil sands to maintain their livelihood.

In spite of the Prime Minister’s seemingly environmental bent, though, he’s repeatedly used the term “phase out” to describe the transition. It seems that in terms of his policy, Trudeau is completely committed to reinforcing the existing oil infrastructure. Just last year, reports emerged that Trudeau had instructed members of his administration to prep for some new oil contracts.

The US-Canada Relationship is Too Important to Harm

Though it would seem the Canadian Prime Minister isn’t a huge fan of the incoming US President, he reaffirmed Canada’s commitment to its partnership with the United States, saying, “Canadians expect their government to have a constructive working relationship with the incoming American administration, and that’s exactly what we’re going to do.”

In other words, though the Trump administration may not continue quite the same bromance that was seen between Justin Trudeau and Barack Obama, the close, working relationship enjoyed by the United States and Canada isn’t in any danger of exploding in the next four years.

Posted in Oil and Gas Politics.