Oilguy
New Member
The us being a next exporter doesn’t really mean they can afford a war on this. It’s where the crude is, the feedstock refiners need and how they get it will be the kicker. The Midwest refiners rely almost solely on the Enbridge mainline, and can’t just get that feedstock from anywhere. If there’s tarrifs or interruptions the entire Midwest is going to see an almost immediate price spike. I just don’t see how that will be avoided. Fen the gulf coast would have to start.p sourcing Venezuelan heavies to offset the loss of Canadian heavies.For consideration, out of any of the industries you have listed: BC forestry (<5% provincial GDP), Manitoba ag (7% provincial GDP), Ontario auto (<2% of GDP), Quebec hydro (<4% provincial GDP), none of them would see the degree of economic devastation that Alberta would from export tariffs/curtailment/ban of oil and gas (21% of provincial GDP). And those numbers quoted don't include an adjustment of what is exported to the United States, where in Alberta's case over 90% of our oil and gas exports all go to the United States. A full export ban to the United States would basically wipe out 20% of Alberta's GDP.
Meanwhile, O&G exports is among the strongest leverage Canada has in this trade war, and it has a relatively minimal impact on Ontario, Quebec and BC, so it makes it a pretty favourable option for whatever government will have their hands on the wheel in a few months. Yet even still, the United States has become a net exporter of oil. Crude blends aside (United States doesn't produce much heavy sour, which a lot of their refineries require), they can withstand a trade war far longer than Canada. Some Exxon lobbyists upset that IOL tanked and some Americans pissed they have to pay higher gas prices is not even remotely close to the same pressure as having an entire province be economically devastated.
Yes, a united front of all premiers aligned is better for Canada, and obviously this is a lifetime opportunity for Smith to play to her base on sticking it to out east and showing support to O&G, but it also is looking out for the best interest of the province she is representing. Alberta would likely fare better slogging through four years of 25% tariffs than even a year long trade war involving significant curtailment of O&G exports. Not to mention, in a roundabout way, it actually helps reduce future possibility of an Albertan separation sentiment that would otherwise explode.
What a mess.
You are right though, what a mess.