Trump’s moves to isolate Canada and damage Canada economically in order to force Canada to make concessions or knuckle under to U.S. pressure will fail this time. Now that Canada’s new TransMountain pipeline is online, Canada has inked new oil shipments of heavy crude directly to refineries in China and Korea. These amount to 890,000 barrels per day, securing a non-American, non OPEC agreement that provides Canada with options that didn’t exist in 2016.
In the past Trump could drive concessions from Canada. What he has actually accomplished is for Canada to diversify its energy supplies away from the United States and towards the Far East, who need to import more than 50% of their supply.
At the same time, these reductions to the U.S. mean that American refineries now need to find new supplies of heavy crude, Venezuela being one of the few alternatives. This has given Venezuela a great deal more leverage with America, which if it doesn’t play along, will mean rapid increases in the price of gas and oil, while minimizing its geopolitical power, normally exercised over other nations, especially Canada.
Canada is further planning to build two more pipelines, one to Quebec, and the second, yet to be finalized, to a new northern port at Churchill in Manitoba. For Canada, this is a win-win-win scenario as it reduces the requirement for oil and gas to eastern Canada from OPEC nations, while securing long-term relationships for oil and likely LNG in the future, when Canada’s new LNG plant at Kitimat, BC is complete, shortly.
For China, and the far east, Korea and Japan, Canada’s ability to greatly expand its exports to the far east could not come at a better time. Geopolitically, China needed a stable supply where war and choke points that could starve China of supplies, do not exist. In turn, Canada’s ability to extract even larger volumes of oil is now possible.
Canada isn’t just changing the balance of power in relation to the provision of oil and gas. Canada will become a key supplier and secure partner with China, Korea and Japan, without being held hostage by the United States. Hence Donald Trump’s threats to annex Canada. The only problem is that Canada is moving away from America’s sphere of influence and will not return. The future for Canada is away from an unstable and mercurial America.
The future for Canadian oil and gas, rare earth minerals, potash, grain and coal deliveries to China will rewrite the geopolitical landscape. As for U.S. exports to Canada, both machinery and electronics can come from Japan, China and Korea in the future.
And most of it is thanks to Donald Trump, his threats, his arrogance and his ignorance.
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