OPINION:
Although the flavor of the month seems to include bashing Canada whenever possible, it is important to remember that our neighbors to the north are, and have been, essential to creating and sustaining American energy supremacy.
Since the turn of the century, Canadian crude oil has replaced imports from countries that do not always share American values. In 2001, almost half the oil we imported came from OPEC. Today, almost two-thirds of the oil we import comes from Canada and just 15% comes from OPEC countries. This is in large measure because Canadian crude costs about 15% less than oil from the Middle East and the cost and complexity of transporting crude oil from Canada are lower.
Our previous excessive reliance on sometimes hostile countries that support neither freedom nor democracy was a threat to American security that was happily and sharply reduced under the first Trump administration.
Additionally, in the past decade or so, the United States has relied on less-expensive Canadian crude to keep energy and gasoline prices low (especially in the Midwest) as we became an energy-exporting superpower. Canadian crude imports have enabled American oil producers to increase exports of higher-value American crude and consequently improved the United States’ balance of trade.
President Trump understands that encouraging our Canadian friends to continue to produce and ship crude oil southward is critical for strengthening our global export position. His favorable tariff treatment of Canadian oil and natural gas compared with other products (10% versus 25%) was a deliberate choice to ensure Americans, particularly those in the Midwest, were not at risk of gasoline shortages or materially higher prices at the pump.
Major American refineries in the Midwest and near the Gulf of America were built to process a blend of heavy and light oils to optimize value while keeping costs low. They need a steady stream of heavy crude to keep producing high-quality, low-cost product.
These refineries have been slow to adapt to increased American oil production. Additionally, the threat of government-induced demand destruction from pointless and damaging climate policies such as electric vehicle mandates and ever-expanding biofuel mandates have deterred refiners from significant investments. Rebuilding refineries to process significantly greater volumes of light American crude — rather than the heavier crudes that many refineries, especially in the Midwest, are now equipped to handle — would likely cost $1 billion or more at each refinery. If given no other option, the refineries will simply shut down rather than spend that sort of cash in an uncertain environment.
Canadian oil and natural gas have also been under attack from climate zealots, such as former Prime Minister Justin Trudeau, who have made it their mission to shut down the Canadian oil sector. That would be bad news for American consumers. The good news is that Canadian attitudes toward oil and natural energy production, always strong under Conservatives, have begun to shift among Liberals. In a concession to voters, the Liberal prime minister — Mark Carney, a rank globalist who recently took office — immediately suspended the widely unpopular consumer carbon tax.
What should be done next? The United States should use its strong position in upcoming trade negotiations to ensure Canada continues to send more of its oil south. More Canadian crude to produce American-made gasoline, asphalt, diesel and jet and marine fuel means lower energy prices for American families, workers and companies and a stronger U.S. balance of trade.
• Michael McKenna is a contributing editor at The Washington Times.
Please read our comment policy before commenting.