Connect with us
[the_ad id="89560"]

Energy

Next federal government should close widening gap between Canadian and U.S. energy policy

Published

5 minute read

From the Fraser Institute

By Kenneth P. Green

After accounting for backup, energy storage and associated indirect costs—estimated solar power costs skyrocket from US$36 per megawatt hour (MWh) to as high as US$1,548, and wind generation costs increase from US$40 to up to US$504 per MWh.

At a recent energy conference in Houston, U.S. Energy Secretary Chris Wright said the Trump administration will end the Biden administration’s “irrational, quasi-religious policies on climate change that imposed endless sacrifices on our citizens.” He added that “Natural gas is responsible for 43 per cent of U.S. electricity production,” and beyond the obvious scale and cost problems, there’s “simply no physical way that wind, solar and batteries could replace the myriad uses of natural gas.”

In other words, as a federal election looms, once again the United States is diverging from Canada when it comes to energy policy.

Indeed, wind power is particularly unattractive to Wright because of its “incredibly high prices,” “incredibly huge investment” and “large footprint on the local communities,” which make it unattractive to people living nearby. Globally, Wright observes, “Natural gas currently supplies 25 per cent of raw energy globally, before it is converted into electricity or some other use. Wind and solar only supply about 3 per cent.”

And he’s right. Renewables are likely unable, physically or economically, to replace natural gas power production to meet current or future needs for affordable, abundant and reliable energy.

In a recent study published by the Fraser Institute, for example, we observed that meeting Canada’s predicted electricity demand through 2050 using only wind power (with natural gas discouraged under current Canadian climate policies) would require the construction of approximately 575 wind-power installations, each the size of Quebec’s Seigneurie de Beaupré wind farm, over 25 years. However, with a construction timeline of two years per project, this would equate to 1,150 construction years. This would also require more than one million hectares of land—an area nearly 14.5 times the size of Calgary.

Solar power did not fare much better. According to the study, to meet Canada’s predicted electricity demand through 2050 with solar-power generation would require the construction of 840 solar-power generation stations the size of Alberta’s Travers Solar Project. At a two-year construction time per facility, this adds up to 1,680 construction years to accomplish.

And at what cost? While proponents often claim that wind and solar sources are cheaper than fossil fuels, they ignore the costs of maintaining backup power to counter the unreliability of wind and solar power generation. A recent study published in Energy, a peer-reviewed energy and engineering journal, found that—after accounting for backup, energy storage and associated indirect costs—estimated solar power costs skyrocket from US$36 per megawatt hour (MWh) to as high as US$1,548, and wind generation costs increase from US$40 to up to US$504 per MWh.

The outlook for Canada’s switch to renewables is also dire. TD Bank estimated that replacing existing gas generators with renewables (such as solar and wind) in Ontario could increase average electricity costs by 20 per cent by 2035 (compared to 2021 costs). In Alberta, electricity prices would increase by up to 66 per cent by 2035 compared to a scenario without changes.

Under Canada’s current greenhouse gas (GHG) regulatory regime, natural gas is heavily disfavoured as a potential fuel for electricity production. The Trudeau government’s Clean Electricity Regulations (CER) would begin curtailing the use of natural gas beginning in 2035, leading largely to a cessation of natural gas power generation by 2050. Under CER and Ottawa’s “net-zero 2050” GHG emission framework, Canada will be wedded to a quixotic mission to displace affordable reliable natural gas power-generation with expensive unreliable renewables that are likely unable to meet expected future electricity demand.

With a federal election looming, Canada’s policymakers should pay attention to new U.S. energy policy on natural gas, and pull back from our headlong rush into renewable power. To avoid calamity, the next federal government should scrap the Trudeau-era CER and reconsider the entire “net-zero 2050” agenda.

Kenneth P. Green

Senior Fellow, Fraser Institute

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Energy

Trump asserts energy dominance, set to meet oil titans amid trade war

Published on

MXM logo MxM News

Quick Hit:

President Donald Trump is taking decisive action to strengthen America’s energy sector, set to meet with top oil executives next week at the White House. The 47th president, who has prioritized energy independence and economic growth, is working to expand domestic oil and gas production while countering foreign market pressures and trade challenges. Industry leaders recognize Trump’s commitment to unleashing U.S. energy dominance, a stark contrast to the regulatory stranglehold of the Biden years.

Key Details:

  • Trump’s upcoming meeting with oil and gas leaders will be his first major sit-down with the industry since his second inauguration, reinforcing his commitment to energy independence.

  • The president’s policies have already slashed regulations and boosted U.S. energy production, but industry leaders seek further collaboration to ensure continued growth.

  • While some executives have voiced concerns over crude price fluctuations, Trump remains focused on lowering energy costs for American consumers while keeping the industry thriving.

Diving Deeper:

President Trump has long championed American energy as the backbone of economic prosperity and national security. Unlike his predecessor, who waged a war on fossil fuels in favor of radical climate policies, Trump has embraced U.S. oil and gas, calling it “liquid gold” and positioning it as a cornerstone of his administration’s economic agenda.

The meeting, set to include top oil executives and members of the American Petroleum Institute, will focus on advancing U.S. energy production. Trump’s newly formed National Energy Dominance Council, led by Interior Secretary Doug Burgum and Energy Secretary Chris Wright, will also play a key role in shaping policy discussions.

Industry leaders like Harold Hamm of Continental Resources and Kelcy Warren of Energy Transfer LP, both of whom backed Trump’s 2024 campaign, recognize the president’s unwavering support for the oil and gas sector. Trump’s administration has already implemented critical reforms to streamline permitting, cut bureaucratic red tape, and expand drilling opportunities—moves that starkly contrast with the Biden administration’s hostility toward domestic production.

Despite global economic factors influencing oil prices—such as increased OPEC+ output and weak Chinese demand—Trump’s policies have laid the groundwork for sustained industry success. While some executives argue that crude prices must remain above $80 per barrel for optimal production, Trump’s focus remains on ensuring affordable energy for American families and businesses.

Trade policy has also been a point of discussion, with some in the industry concerned about Trump’s tariffs on steel and aluminum, which are critical for drilling operations. However, Trump has consistently prioritized fair trade and American manufacturing, refusing to allow foreign competitors to undermine U.S. industry. Unlike the Biden administration, which caved to globalist interests, Trump is leveraging tariffs as a tool to strengthen domestic production.

Bethany Williams, spokesperson for the American Petroleum Institute, emphasized Trump’s impact: “President Trump’s energy agenda has set our nation on a path toward energy dominance. We appreciate the opportunity to discuss how American oil and natural gas are driving economic growth, strengthening our national security, and supporting consumers with the president and his team.”

As Trump continues to roll back Biden-era climate mandates and prioritize U.S. energy independence, his administration is making clear that American oil and gas will once again lead the global market. With the full backing of industry leaders, Trump is proving that energy dominance isn’t just a slogan—it’s a reality under his leadership.

Continue Reading

Canadian Energy Centre

Experts urge caution with Canadian energy in response to Trump tariffs

Published on

From The Canadian Energy Centre

By Will Gibson

‘We want Americans to stand up for our supply’

A lawyer by training, Gary Mar is also a keen student of history. And he recommends Canadians look at what happened when past U.S. administrations imposed tariffs on imports before jumping to add costs to Canadian energy.

“President Richard Nixon imposed a 10 per cent tariff in 1971 and withdrew it after a few months because it caused so much pain for American consumers,” says Mar, CEO of the Canada West Foundation, who served as Alberta’s trade representative in Washington from 2007 to 2011.

“Canadians and their governments need to be patient. Any tariffs on energy will be passed on to consumers in the United States. We shouldn’t let the president off the hook for raising the price to American drivers by putting more duties on energy we export,” he says.

“We want Americans to stand up for our supply, not displace the anger with President Trump for raising prices with anger towards Canadians.”

A major U.S. supplier

The U.S. imports more than four million barrels of oil per day from Canada, or about one out of every five barrels the country consumes. Most Canadian imports are destined for refineries in the U.S. Midwest including Illinois, Indiana, Michigan and Ohio.

About 99 per cent of natural gas imports into the United States also come from Canada. Natural gas imports flow primarily to Idaho, North Dakota, Minnesota and Montana, according to the U.S. Energy Information Administration.

Trump tariffs

Nixon put tariffs in place in an attempt to weaken the U.S. dollar against foreign currencies and strengthen U.S. exports.

Mar, who served as cabinet minister in the Klein and Stelmach governments from 1993 to 2007, sees Trump’s tariffs as aimed to repatriate manufacturing and jobs to America.

“President Trump made this explicitly clear…if you want to sell manufactured goods in the United States, you need to move your factories here,” says Mar.

“But Canadian oil and natural gas are key inputs that help U.S. manufacturing. We ship the products or partially refined products that support manufacturing of finished products in the United States. Tariffs will raise those costs for U.S. manufacturers and ultimately American consumers.”

A divisive rerun of the National Energy Program?

Mar’s former cabinet colleague Ted Morton agrees Canada needs to exercise patience and caution in any response to U.S. tariffs.

Morton, who served as an Alberta cabinet minister from 2006 to 2012, strongly disagrees with the idea of placing countervailing tariffs on energy exports to the United States. Morton casts it as a divisive rerun of then Prime Minister Pierre Trudeau’s controversial National Energy Program in the early 1980s.

Energy export tariffs “would be an attempt to revive Liberal Party support from disillusioned voters in Ontario and Quebec,” he says.

“The biggest loser in Trump’s new tariff war will be Ontario due to the integration of the auto sector between the U.S. and Canada. It’s simple political arithmetic. Ottawa could collect $4 or $5 billion by taxing energy exports in western Canada and send that money to prop up struggling industries in Ontario and Quebec,” Morton says.

“Ontario and Quebec combined have a total of 199 MPs, more than enough to form a majority government. It’s the ‘screw the West and take the rest’ strategy. It’s how the Liberals won the 1980 federal election, and they could try it again.”

Legal and constitutional precedents

And while imposing export tariffs on Canadian energy could be politically popular in central Canada, Morton suggests the action would not withstand a legal challenge thanks to legal and constitutional precedents set by former Alberta Premier Peter Lougheed.

“Peter Lougheed left future Alberta premiers with some very effective legal weapons. His government successfully challenged the constitutionality of Trudeau’s export tax on natural gas. He then teamed up with the other western premiers to negotiate a new constitutional amendment that affirms provincial jurisdiction over the development and conservation of natural resources,” Morton says.

“Premier Danielle Smith should win any constitutional challenge if the federal government tries to impose an export tariff on oil or natural gas.”

Morton, like Mar, also counselled patience in responding to tariffs because “Trump’s tariffs on Canadian energy will punish American consumers more than Canadians.”

The national interest

David Yager, who has studied and analyzed energy policy for more than 40 years, agrees tariffs on energy have the potential to drive a wedge between Alberta and the rest of the country in the same way the National Energy Program did.

“The dynamic definition of national interest is what I struggle with. Going back several decades, it was in the national interest to get oil and gas across Canada so there was a drive to build pipelines east and west,” says Yager, a consultant who also serves as a special advisor to Premier Smith.

“Today, the national interest has flipped again, and energy exports are now a source of revenue to save the ‘real’ Canada, which is central Canada. It’s the same kind of logic that has seen the emissions cap on oil and gas as well as the carbon tax.”

If Canada wants to retaliate, Yager recommends putting a duty on the 1.7 billion cubic feet of natural gas imported by Ontario and Quebec from the northeastern United States.

“That would be the appropriate tit for tat response,” Yager says.

“You could build a nice pool of capital and clobber U.S. producers without driving a wedge between Alberta and the rest of the country.”

Continue Reading

Trending

X