CALGARY – Donald Trump’s hostility toward trade with OPEC oil producers and interest in U.S. energy security could boost demand for Canadian oil as he assumes the president’s office, says the head of a Calgary commodity trading firm.
Canada provided about 43 per cent of the nine million barrels per day of oil imported by the United States last year, versus about 36 per cent by OPEC, says Tim Pickering, founder and chief investment officer of Auspice Capital.
“Trump has talked about the end of energy imports from hostile OPEC nations,” Pickering said.
“If it were to occur that they reduce the import of oil from Middle Eastern nations, for example, that could be bullish for oil and that could be bullish for Canada, in my opinion.”
In his America First Energy Plan, Trump says the U.S. should “become, and stay, totally independent of any need to import energy from the OPEC cartel or any nations hostile to our interests.”
Calgary oilpatch observers said any increase in Canadian oil exports will require more pipeline capacity, which makes Trump’s promise to reopen the approval process for the Keystone XL oil pipeline a potential win.
But Trump’s insistence that the U.S. be given a greater financial benefit from the pipeline could still derail the project.
“On the specifics of KXL, he has said he would approve that forthwith, provided they get some kind of uptick,” said Bob Skinner, executive fellow with the School of Public Policy at the University of Calgary.
“To ask for 30 per cent, or whatever he’s asking for, is basically saying there will be no pipeline.”
Jeff Gaulin, vice-president of communications with the Canadian Association of Petroleum Producers, says export pipelines from Western Canada are running at near their capacity of four million barrels of oil per day.
Oil production is expected to grow by at least 850,000 additional daily barrels between now and 2021 from oilsands projects under construction, then jump by an estimated 750,000 bpd by 2030, he said.
During the election campaign, Trump said he was open to allowing oil and gas companies to drill more wells on U.S. federal lands, potentially creating more competition for Canadian energy exports.
But Jackie Forrest, vice-president of research at private energy investment firm ARC Financial in Calgary, said she doubts the move would have much impact in the short term on American domestic oil output.
“How fast that actually would result in new production? My gut feel is it could be at the end of his four-year term before you would see any investment that would result in new drilling,” she said.
Skinner said the fact the U.S. is “swimming” in shale oil and gas makes it unlikely that new and unexplored areas would attract a lot of investment.