World Trade is in turmoil on the one side the protectionist policies that the United States is trying to implement with its us first message on the other countryes seeking to respond to the rising demand in the global energy Market recently when US president Donald Trump imposed and then suspended tariffs on all Canadian products it got many their thinking with friends like that exported from Canada and Mexico to the US will be hit with a 25% tariff products from China with 10% % hour and a half ago the US went ahead with its promise of 10%
tariffs on all Chinese Goods headed to the US in the midst of all this Canada which stands out with its geographical location and huge energy resources is at a historic Crossroads is it safe to remain so dependent on the United States Market or should I start utilizing my oil and natural gas in Asia is among the issues that the Ottawa Administration is hotly debating the risk of trade War which has become more pronounced recently is forcing Canada to open up strongly to Asian countries outside the traditional United States route but why does Canada want to
take this step how and with whom will it compete in the Asian market how will new pipelines LG facilities and environmental concerns shape this plan let's take these critical issues step by step for many years Canada located just north of the United States has focused on selling its vast resources to the nearest largest consumer the United States so much so that still today a very large share of Canada's energy export Revenue comes from the United States market for years this was seen as a very logical cooperation geographical proximity easy Transportation through pipelines language Unity political
relations but the trade policies that have hardened under Donald Trump the additional tariffs on steel and aluminum the possible tariffs on a wide range of products especially Automotive have led Canada to worry if I am so dependent on a single Market I could suffer a lot in a crisis although United States Canada relations remain on the basis of friendship the trade War Dynamic signals a danger for Ottawa on the other hand energy demand is still growing rapidly in Asia especially in China India Japan and South Korea in addition to Major suppliers such as the Middle
East and Russia there could be a large number of buyers interested in Canadian Oil and Gas as a reliable and stable source in a world where no one wants to be locked into a single supplier Canada is saying I can be part of the huge demand in Asia moreover Canada can be seen as a more predictable partner if geopolitical risks or sanctions are taken into account Canada is one of the top five countries with the world's largest proven oil reserves in particular the oil sands in the province of Alberta contain huge quantities of oil similarly
Canada's natural gas resources are also substantial so the idea has long been that if we can find new markets to sell to we can increase our production and grow our income until now however the idea was that since access to the United States Market was easy there was no need to look for Alternatives now with the Trump era there is a growing sense that too much unilateral dependence is risky on the other hand there are logistical challenges in reaching the Asian market Canada's West Coast lacks large ports and pipeline infrastructure hence projects stretching from British
Columbia to the Pacific are on the agenda moves such as the Trans Mountain pipeline the construction of LNG terminals once completed Canadian Oil and Gas could be shipped by ship to Asian countries factors such as the high cost of the projects environmental concerns and the rights of indigenous communities have delayed the process for years but fears of a trade War could accelerate these projects under the slogan of making America great again Donald Trump has used many tools including tariffs to protect domestic Industries although Canada wants to be treated as a friendly country on steel and
aluminum the United States Administration first imposed these tariffs on Canada as well later some quotas and exemptions were introduced but uncertainty remains ottawa's government is reproachful you have such a long-standing relationship with me why do you impose punitive tariffs on me if a new escalation erupted tomorrow and the United States imposed tariffs on oil or natural gas Imports Canada would be in a very difficult position it is this potential risk that reinforces Canada's decision that we must now enter Asia Asian markets are considered the fastest growing region in global energy consumption growing industry and populations
led by China and India are demanding more oil and gas in addition traditional large importers such as Japan and South Korea are looking for new suppliers to ensure security of Supply this is an attractive opportunity for Canada but of course established players like the Middle East and Russia are still influential there still a stable democracy with low geopolitical risks like Canada could be an attractive option for buyers key to Canada's export Ambitions to Asia infrastructure on the west coast ports where tankers can load Alberta's oil and gas have limited capacity the Transmountain pipeline Expansion Project
aims to close this Gap the first pipeline is already in place but capacity is very insufficient when the expansion is complete it will be able to carry around 890,000 barrels of crude oil per day this crude oil could reach the Burnaby terminal near Vancouver from where it could be shipped by ship to Asia but the cost of this project has escalated from an initial 5 billion Canadian dollars to 21 billion Canadian dollars with construction delays necessitating government intervention despite these costs Ottawa argues that it's a worthwhile investment in the long run because we won't be
stuck in the United States Market another issue is liquefied natural gas LNG Canada's LNG export capacity is still very low yet the United States has exploded its LG exports in the past few years reaching markets from Europe to Asia we need to make a similar move and build LG plants Canada says the LG Canada project in British Columbia is the most concrete example a Consortium led by shell is investing billions of dollars in the project when the plant comes online Canada's natural gas will be cooled loaded onto ships in liquid form and Shi to Asia
long-term contracts with countries like Japan South Korea and China could cement Canada's position as a global LNG player of course there are issues such as the environmental aspects of the projects and the rights of indigenous peoples many indigenous communities are concerned about the Environmental and Cultural impacts of the pipelines the government is negotiating with these objections compensation protection measures Etc are on the agenda in addition the carbon intensive nature of the crude oil obtained from the oil sands draws the reaction of environmental organizations so despite concerns about a trade War Canada has to take into
account the green transition processes what about demand in Asia China is the world's largest oil importer India with its rapidly growing economy offers enormous demand potential Japan and South Korea have traditionally sourced energy from the Middle East but want to diversify their sources Canada can be positioned in this picture as a stable long-term contractual supplier of course price competition is also important Middle Eastern oil is transported to Asia by tankers and the Sea distance is relatively close ships from Canada may follow a slightly longer route there is a cost difference but when geopolitical risks are
analyzed the fact that Canada is a peaceful Democratic country with low risk of sanctions is a plus our product ultimately offers lasting security of supply and gives Asian refiners flexibility the Canadian government emphasizes big Asian buyers also buy oil and gas from Russia and the Middle East but in the aftermath of the Russia Ukraine war some countries aversion to Russian energy supplies or the sanctions imposed on Russia could open the door for Canada Japan and South Korea in particular may want to diversify their supplies while partially complying with with Western sanctions against Russia India and
China tend to buy cheaper oil from Russia but there are refiners who say let's not depend on a single source so Canada is thinking I can grab a piece of that demand while Trump's trade War threats are not the only reason they are certainly a factor accelerating Canada's decision it can be summarized as we already wanted to diversify in the long run now we have to accelerate if this Asian expansion is successful Canada's balance of trade could become less dependent on the United States giving Ottawa a strategic Advantage when any United States Administration says I've
imposed tariffs on you Canada can say okay I'll sell more to Asia of course this is not an easy sentence but if the logistics and the contractual side are finalized at least it would give Ottawa some leverage of course for everything to work projects on the west coast need to be completed environmental objections need to be managed and permanent Supply agreements need to be in place in Asian markets Ottawa has recently been sending diplomatic delegations to Tokyo Seoul New Delhi and Beijing LG and oil deals long-term contracts investment incentives many issues are on the table
some experts say Canada is taking a long overdue step at this very moment it should have been done years ago but at least now it has been realized in the global oil market demand elasticity and prices are intertwined with politics crude oil from The Middle least has an advantage in Asia because of its generally low Transportation costs Russia on the other hand is in dire need of energy revenues because of the war so it sells to China and India at discounted prices how competitive is Canada in these circumstances according to experts Canadian producers are trying
to convince Asian buyers with the slogan more environmentally friendly more stable Supply still there may be pressure to sell cheaper at a time when geopol politics dominates energy exports Canada's strongest Advantage is low diplomatic risk but they must overcome the price differential Canada also cannot ignore the Winds of transition to clean energy the world is shifting from coal and oil to Renewables but this transition is expected to take many years and natural gas will remain important as a transition fuel therefore it may make sense for Canadian LNG projects to find a place in the Asian
market with 10e or 20-year contracts the uncertainty in the United States also add salt to the pepper as a result Ottawa says we can't lose anymore let's expand to Asia but how would Washington react if Canada partially turns its back on the United States and turns to Asia of course the United States Market would still be a major profit Center for Canada and it is unlikely to close completely but if the tariffs kick in Canada may not be able to start shipping large volumes to Asia overnight there are experts who say it will take at
least 5 to 10 10 years before infrastructure construction is complete so this is not a short-term move but it is a strategic signal I don't see you as the only Market I have an alternative maybe the United States can sit down with Canada and mitigate the trade War otherwise Canada Asia cooperation will move forward and the advantage of affordable Canadian oil for United States refineries may be partially lost in the long run Washington may also rethink its trade strategy at the moment Canada 's historical friendship with the United States remains intact and no one is
proposing to break it suddenly however with the prospect of a trade War in the United States Ottawa must give up the luxury of tying exports to a single Market in Asia especially emerging or large economies such as China India Japan and South Korea offer significant demand once the new Pipeline and LNG projects are completed Canada will perhaps shed its image as a North America focused supplier and strengthen its identity as a global energy player undoubtedly this strategy carries environmental and social costs as well as geopolitical risks but for Canada it could serve as insurance against
the United States especially if trade tensions with Washington escalate Canada can strengthen its hand at the bargaining table by saying we have a plan B we will turn to Asia both the NAFTA United States Mexico Canada agreement debate and the Trump administration's tariffs are making this approach more popular in Ottawa what do you think can Canada's plan to increase oil and gas exports to Asia instead of or in addition to the United States actually materialize all will logistical cost and environmental barriers keep it just rhetoric if they succeed how will this affect relations with the
United States perhaps the United States will not take Canada's move too seriously but who knows my neighbor to the north is finding other markets could be a cause for concern in Washington please share your thoughts in the comments thank you very much for watching us you can support us by subscribing to our Channel turning on your notifications and liking the video it seems that even the United States Canada line of historical cooperation in the global energy Market can be strained by concerns over protectionism and trade Wars Canada's Asian expansion may be a long-term project but
it is intriguing in these turbulent times for the world economy let's see whether projects and new agreements will materialize in the coming months or will they be sheld let's follow the developments together goodbye
