By Bob Weber

Prime Minister Mark Carney’s Major Projects Office is now six months old, just a baby in government years. But those gathered around the newborn’s crib already have plenty of ideas on how they’d like the infant to grow up.

Some look for an umpire—a neutral agency that simply evaluates big proposals and advises cabinet. “I hope they want someone who’s there to call balls and strikes,” Andrew Leach, an energy and environmental economist at the University of Alberta, told The Energy Mix. He said the MPO’s role should be to advance such projects, but also to ensure proponents have covered the environmental and consultation bases.

“You want someone in the room that when a company comes in and says, ‘Our project’s just not moving forward,’ (asks) ‘Have you done the work right?’”   Others want something more activist, pushing projects that further decarbonization, such as linking interprovincial electricity grids. “It needs to be a ramp up for renewable energy projects,” said Mark Kalegha, energy finance analyst at the Institute for Energy Economics and Financial Analysis. “Interconnectedness seems to be on their priority list and the MPO is able to help with the regulatory hurdles.”

A giant lab on regulatory reform would be welcome, say some. “What we’re hoping comes out of the Major Projects Office is learnings on how to accelerate reviews and processes without denuding them or making them any less stringent,” said Fernando Melo, public affairs director with the Canadian Renewable Energy Association (CanREA). “I’ve been out to many a project site where you ask, ‘How many permits are you filing?’ and the answer comes ‘Oh, five or ten’ … And I go, ‘One field.’”

Others expect it to serve an overall policy goal. “They’ve been focused on resources and infrastructure, in particular, trade facilitating infrastructure,” said University of Calgary economist Trevor Tombe. “That, to me, really speaks to the priority on trade diversification that the government has laid out.”

And some will be grateful if the whole thing doesn’t just turn into another deadening layer of lobbyist-ridden government bureaucracy. “

It does signal to investors that (their proposal) won’t be one of those Canadian proposals that takes 12 years. That’s the generous side of it,” said Heather Exner-Pirot, senior fellow at the Macdonald-Laurier Institute. But she asks, if excessive regulation is the problem, why not just reduce regulation?

“They’ve listed all these regulations that the MPO can bypass—why don’t they work on fixing those if they can be bypassed safely?”

But all say that attempts to assess the MPO’s direction need context. The office is just one part of a policy package aiming to reduce Canada’s dependence on increasingly unreliable United States trade, boost the country’s economic self-reliance, and move its economy toward a low-carbon future—all at once.

“Just as important, if not more important than the major projects themselves, is the policy,” said Janetta McKenzie, oil and gas director at the Calgary-based Pembina Institute. She said industrial carbon pricing, methane regulations, clean electricity regulations, and federal investment tax credits are just as big an influence on where investment goes as anything the MPO does. “

If the goal is to build a future-proofed Canadian economy that is more resilient to ongoing geopolitical shocks and volatility, then the investment signals need to be strong,” McKenzie said.

The Signals So Far

The signals, so far, haven’t been encouraging for climate goals. The federal government has junked consumer carbon pricing, tossed oil sands emissions caps, and weakened EV sales mandates. Tough economic times have proved tough for environmental policy, too, said Leach.

“Once people became convinced, rightly or wrongly, that Canadian environmental policy was the source of all their woes, there wasn’t much ground there left for the PM. “Voters are very keen on environmental policy as long as it doesn’t cost them anything.”

For example, the memorandum of understanding now being finalized between Alberta and Ottawa includes a promise of industrial carbon pricing—but also support for a new pipeline, which a Pembina analysis concluded would increase Alberta’s carbon emissions even if that oil was “decarbonized” through capture and storage.

Leach said national security concerns may now support the project. “All our pipelines in the U.S. are subject to a presidential permit the president can revoke at any time at our expense,” he said. “It’s still a conversation that’s in a dark corner, so to speak, but it’s a conversation we should be having.”

A Pipeline Full of Obstacles

But any new line faces considerable obstacles.

There’s neither a route nor a proponent, and the increased production needed to fill one would require massive upstream investment.

The MOU signed between Alberta and the feds rules out public financing, but former Alberta energy minister Sonya Savage recently told a CBC podcast that without public support a private proponent is, at best, highly unlikely.

Still, there may be a financial case to be made, suggested Leach, pointing to 2010, when pipeline bottlenecks forced producers to discount Canadian oil. If that happened again, the discount would now be on roughly twice as much oil.

“This is the math that people miss,” he told The Mix. “Even if you said this (pipeline) would reduce the differential by a buck, that’s four million barrels a day, 365 days a year times 15 years. (The investment) doesn’t look terrible.” Price, he said, is far more important than sheer volume.

But Canada will likely need to reduce that discount and squeeze out every petrodollar it can, and sustain it over a longer haul that may not be realistic. Before the current war launched the price of oil, it was languishing around $60 a barrel, with most experts predicting further falls. That market is likely to eventually return once the U.S.-Iran conflict ends. When the missiles stop flying, so will the value of oil.

Diversified Trade Could Boost Climate Goals

But the Carney objective of diversifying Canada’s trading partners could also advance climate goals. The projects currently before the MPO suggest at least some emphasis on clean energy, with wind power and minerals critical to electrification in the mix.

There’s also a proposal to link electricity gids in northern British Columbia and the Yukon.Climate and energy transition advocates say that is exactly the sort of thing the MPO should be doing to move Canada towards electrons and away from molecules.

“The more we integrate provinces and (make them) able to call on each other’s resources, it’s going to be better,” said CanREA’s Melo. “Having more connectivity will help enable greater decarbonization of the grid.”

In fact, grid ties are probably the only electricity-related projects big enough to appear on the MPO’s “nation-building” agenda. Solar panels and wind farms are also regulated provincially, putting them outside the MPO’s purview.

“The barriers to renewable penetration of electricity generation are provincial policies,” said the University of Calgary’s Tombe.

Trade diversification could provide another decarbonization prod. Canada will have to meet the environmental standards of those it seeks to trade with. Europe, for example, implemented its carbon border adjustment program in January. The policy imposes a tariff on imports of carbon-intensive products such as steel, cement, and energy that don’t meet EU standards. Melo said if Canada wants to play in those markets, it will have to comply.

“With the Canadian government’s stated goal of 50% of exports reaching alternative markets— the European Union, Japan, and China, which everyone forgets has an industrial carbon price— there’ll be more and more demand that the goods they import have low-carbon attributes built in.”

Weighing the Consequences

It’s unlikely that Mark Carney, once the UN’s special envoy on climate action, has forgotten the need to reduce carbon emissions. But he’s a central banker, too, used to weighing consequences of action against each other.

“The end game is going to be overall policies on consumption and overall policies on production,” Leach said. This may mean a little water in the wine of carbon cuts. Rather than absolute targets—the meeting of which has failed dismally—Canada may instead focus on simply being better than our competitors, some analysts say.

“Sustainability includes financial sustainability,” said Exner-Pirot. “The goal is not to kill Canadian production, but to make it better. Trying to square the circle involves making Canadian products competitive on carbon intensity, aiming for the good rather than the perfect.”

The Carney government must now make tough choices in the face of a new world order different than the one we were told to expect, Tombe said. “Reality has just thrown a few curve balls at Canada.”

“I do not see the government having abandoned any consideration at all about climate objectives,” he added. “But it also keeps in mind other criteria like trade diversification, economic and productivity growth … (Government) could achieve a lot more if it was singularly focused on climate goals. But it is not. It is balancing lots of objectives.”

The MPO itself has offered few clues as to its direction and intent. Although CEO Dawn Farrell is a longtime fossil energy executive who shepherded the controversial Trans Mountain pipeline expansion project, she has a non-partisan and even-handed reputation. Still, in testimony last fall before a Senate committee, she spoke approvingly of the carbon intensity of Canadian LNG. She also suggested a new oil pipeline to the west coast would have climate benefits, since much if that oil is used to make components for electric vehicles.

Some other senior staff bring past background in renewable energy and in reconciliation with Indigenous communities, but staffers have provided little information about where the office is going. Federal officials have told The Mix that Farrell maintains close contact with Carney and his senior staff, and that “all the major calls” will be made by the Prime Minister’s Office.

It’s early days for the MPO and the baby is barely walking. Where its first steps take it will be determined as much by the paths other policies have opened for it as its own inclinations.

But like any infant, observers broadly agree that it will take a while to mature. A $3.3-trillion economy does not turn around overnight.

“This process of diversifying trade, of boosting investment and growth, is going to be a multi-year, potentially multi-decade road that we’re on,” Tombe said. “We’re only at the very, very beginning. There’s so much left to do and so many unanswered questions still that need resolving.”

The post High Hopes, Few Details as Major Projects Office Hits Six-Month Mark appeared first on Thoughtful Journalism About Energy's Future.

By Philippe Le Billon

War is costly. The ongoing American-Israeli war on Iran is already reverberating through the global economy. For most people, including American citizens, it means higher fuel prices and greater economic uncertainty.

But for a narrower group of entities, war can also be extraordinarily profitable. Chief among them are segments of the United States oil and gas industry, which have already profited from Russian President Vladimir Putin’s decision to invade Ukraine and the ensuing sanctions on Russian oil and gas exports.

Now, the escalation of hostilities between the U.S., Israel and Iran has once again rattled global energy markets. Fighting and the closure of the Strait of Hormuz — one of the world’s most important oil shipping routes — have triggered what some have described as “the biggest oil disruption in history.”

Read more: What is the Strait of Hormuz, and why does its closure matter so much to the global economy?

By early March, oil prices had briefly surged to US$119 per barrel — roughly double their level at the end of 2025. Prices have since settled at near US$100 a barrel, though volatility remains.

The escalation illustrates a familiar pattern in the political economy of fossil fuels: public costs paired with private windfalls.

The shock to global energy markets

Three months ago, few analysts expected 2026 to be a particularly profitable year for fossil fuel producers. Global supply was expanding rapidly and U.S. gas prices were expected to fall below US$3 a gallon.

Production growth in the U.S., Canada, Brazil and Argentina was colliding with weaker demand growth and the ineffectiveness of sanctions on exports from Russia, Iran and Venezuela. Many analysts warned of an emerging glut that could push prices downward. The International Energy Agency, for instance, projected a potential global oil surplus of nearly four million barrels per day in 2026.

That outlook changed abruptly following the U.S.-Israeli attack on Iran and the country’s retaliatory attacks on energy infrastructure and tanker traffic through the Strait of Hormuz, a strategic chokepoint that normally carries roughly one-fifth of the world’s traded oil and natural gas.

Even a partial disruption carries immediate consequences.

Though the strait has been a cornerstone of U.S. and world energy security for more than 60 years, the Donald Trump administration apparently underestimated the possibility that the Iranian regime would blockade it and pummel U.S.-allied countries in the region.

For consumers and most businesses, such price spikes function as a tax. Higher energy costs ripple through transport, food production, manufacturing and household budgets. American drivers feel the impact at the pump, while industries dependent on fuel or petrochemicals see their operating costs climb.

The hidden household costs of war

Estimates suggest that for every increase of US$10 per barrel, additional fuel costs amount to roughly US$560 per year per American household, including costs embedded in goods and services.

If prices remain at around US$86 instead of the expected US$51 forecast for 2026, the added burden could reach about US$2,000 per household annually.

These figures do not include the direct military expenditures, which were conservatively estimated at US$11 billion for the first week of strikes against Iran.

Even military spending of US$200 million per day (10 times less than the highest estimates at the current intensity) would amount to an additional cost of US$541 per household annually.

In short, a prolonged war combining high energy prices and sustained military expenditures would likely amount to between three to four per cent of the median U.S. household expenditure — roughly half of what many families spend annually on food or health care.

Lessons from recent wars

Recent history offers revealing precedents.

The costs of the Iraq War (2003 to 2011) for Americans has been estimated at about US$1.2-3 trillion in total long-term costs, equivalent to about US$16,700 to US$41,750 per household in current U.S. dollars. Yet the war did achieve the goal of reopening access to Iraqi oil fields for American oil companies.

More recently, the invasion of Ukraine by Russia cost an estimated one per cent of global GDP in 2022 and added 1.5 per cent to global inflation in 2022-23. Ukraine, of course, paid the largest price for the war, but direct impacts in Europe amounted to about 1 trillion euros.

Much of these costs ultimately translated into profits for oil and gas companies, especially liquefied natural gas (LNG) companies from the U.S. and producers in Australia and the Gulf states.

Profits on a single LNG shipment from the U.S. to Europe increased fivefold from about US$17 million to US$102 million.

A similar dynamic is now unfolding again.

Who really benefits from rising oil prices?

This time, with major Gulf states themselves exposed to the conflict, U.S. and other exporters less directly affected by the war may have even greater room to increase profits. American LNG companies could see windfalls approaching US$20 billion per month.

The main lesson is that petro-states, including Iran, Russia and the U.S., don’t hesitate to go to war partly because they believe oil revenues will bail them out, if not further enrich them.

In fact, in seeking to justify the attack on Iran and the continuation of the conflict, Trump argued that “the United States is the largest oil producer in the world, by far, so when oil prices go up, we make a lot of money.”

This, of course, depends on who “we” refers to. The populations of most petro-states have paid dearly for the wars involving their countries, whether it’s been Angola, Chad, Iraq, Libya, Nigeria, Russia, Syria and now Iran.

The U.S. has fared much better economically, but the gains have been mostly for its companies, not its population. Higher oil and natural gas prices generate enormous revenues for U.S. oil producers and LNG exporters along the Gulf Coast as global gas markets tighten. Investors and shareholders in these sectors stand to gain from rising margins and market valuations.

American households, however, face the opposite effect. Fuel prices rise. Inflationary pressures intensify. Transport and heating costs increase.

The gains accruing to producers are therefore not only partially financed by the most import-dependent countries with the least strategic reserves but also by low-income households who are stuck in a carbon-intensive economy they can least afford to escape.

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By Justina C. Ray and Dave Poulton

Over the summer, the Canadian government announced that it’s setting up a Major Projects Office to identify and fast-track projects deemed to be in the national interest. The projects under consideration are spread across Canada and focus on mining, power generation and port expansions.

But each update to the list throws a spotlight on a persistent gap in Canada’s planning processes. The federal government has signalled it wants to see these projects move quickly — but without a clear way to help ensure they proceed without sacrificing the climate resilience, biodiversity or community trust that Canadians also value.

For example, the government has signalled interest in expanding the Port of Churchill, Man., with new shipping, road, rail and energy infrastructure to support expanded Atlantic access for Prairie industries.

These facilities would introduce industrial activity into Arctic and sub-Arctic ecosystems that have seen little prior disturbance and are already stressed by rapid climate change. The siting and design choices will be critical — raising questions about how early ecological risks are being weighed.

What Canada needs alongside its list of major projects is a principled, transparent sequence of steps that governs how those projects are planned and assessed.

Without such a strategy, the focus centres on pushing the project through. And planners and policymakers fail to consider those early, fundamental questions about ecological risk, or whether the location and design make sense in the first place.

Adopting a well-established mitigation hierarchy, as outlined in our recent report, can help Canada avoid the tangled and dysfunctional outcomes we see again and again in current planning and assessment processes.

In this context, mitigation refers to the full set of tools available to deal with environmental impacts, applied in a clear sequence or hierarchy: first avoiding impacts where possible, then minimizing those that remain, then repairing damage on site, and only as a last resort compensating for residual losses elsewhere.

Step 1: Avoid harm with early-stage planning

Too often planners focus only on reducing impacts after basic design decisions are made. This leaves decision-makers boxed into weaker options than if they had first asked what could be avoided — and it can be far costlier as late-stage fixes mean redesigns, deeper ecological damage and heightened conflict.

Effective planning requires backing up and taking in the big picture. What comes into view is a sweep of globally important, largely intact ecosystems — places that anchor our climate, support communities and sustain wildlife and their movements.

That means the first step in any sensible hierarchy is to steer development away from places like sensitive peatlands, areas important for biodiversity, cultural keystone places and headwaters that sustain vital watersheds.

Early-stage planning enables the most important questions to be asked: Is the proposed option the best means of meeting the need, or do lower-cost or less damaging alternatives exist? Are projected ecological, climate and community impacts supported by evidence of commensurate economic and social outcomes?

Answering these questions well depends on strong baseline information about ecosystems and communities — something too often missing at the outset, causing delays while data is gathered.

Governments can begin closing this gap by strengthening the evidence base needed to inform projects before they advance. This includes support for sustained regional ecological monitoring, Indigenous and community knowledge programs and fuller use of strategic and regional impact assessments. All of these measures can identify cumulative effects and landscape-level priorities and provide shared information for planning across entire regions.

Delivering on the Liberal commitment to “map Canada’s carbon and biodiversity-rich ecological landscapes … to enable a more holistic ecosystem approach to conservation, carbon accounting, and project development” would substantially advance and improve early-stage planning. Integrating existing data held by public agencies, private proponents and consultants would further clarify environmental strengths and vulnerabilities.

Step 2: Minimize harm that cannot be avoided

Only after fully considering ways to avoid impacts should the focus shift to minimizing unavoidable damage. This is where design and operational choices matter: adjusting scale, routing, timing and methods to reduce a project’s footprint and its effects.

In ecologically intact regions — places where human pressures have not yet reached levels that compromise core ecological functions — minimization also means confronting growth-inducing impacts head-on by limiting new access, managing roads and corridors and regulating the pace and scale of development to prevent cascading cumulative effects.

Done properly, minimization protects ecological function and reduces long-term environmental, social, and financial liabilities for proponents.

Step 3: Remediate to make impacts temporary

Once all feasible steps for minimization have been taken, it becomes appropriate to move on to onsite remediation — rendering unavoidable impacts temporary through progressive reclamation, revegetation and decommissioning.

Prioritizing remediation in already stressed landscapes reduces cumulative effects, restores ecological function and builds trust by demonstrating recovery during the life of a project, not decades later.

Step 4: Offsetting is the last tool, not the first

The final step in the mitigation hierarchy is offsetting — the idea of restoring or protecting habitat elsewhere to compensate for what is lost to development. In theory, this promises no net loss, or even a net gain.

In reality, it’s the riskiest and least reliable form of mitigation, which is why it must be treated as a last resort. When offsetting is used in isolation, long after a project’s design is locked in, it becomes a poor substitute for the harder, but more valuable, work of avoiding and minimizing impacts at the outset.

As we stress in our report, that kind of sequencing failure matters. Once decisions are made and footprints fixed, ecological losses can no longer be undone, and offsets are expected to carry a burden they cannot realistically bear.

Offsetting should therefore function as a backstop — not a shortcut. Yet, it is frequently looked to as if it were the first tool in the box rather than the last.

A unified federal policy framework

Deploying the mitigation hierarchy is a technically simple approach to project planning, and it can make a substantial difference in getting projects built without unnecessary delays.

It requires a planning mindset open to alternatives and a willingness to invest early in understanding ecosystems and community needs. The hierarchy also aligns with Indigenous perspectives that view natural systems as interconnected, offering pathways for more meaningful engagement.

There is nothing new about this approach. The mitigation hierarchy has guided major-project planning and financing in other countries for decades and appears — albeit inconsistently — across several federal policies. But in this moment of renewed ambition for “nation-building” projects, Canada has an opportunity to bring coherence and discipline to the management of environmental and social impacts.

This is why we are calling for a unified federal policy framework, so that the mitigation hierarchy is applied consistently across federally supported projects. A clear hierarchy — applied early, consistently and transparently — would make decisions stronger, projects more credible and our commitments to biodiversity, climate, and Indigenous rights more than words on paper.

The post Fast-tracking without foresight: Canada’s risky approach to major projects appeared first on Thoughtful Journalism About Energy's Future.

by Bob Weber

The year 1539 was a good one to be King of England.

Henry VIII, the reigning monarch, had a free hand on royal marriages, state religion, church property, and such. But those pesky Parliamentarians didn’t always move as quickly or as agreeably as he would have liked.

So he had his fixer Thomas Cromwell come up with the Statute of Proclamations, which gave Henry the power, exercised through decree, to alter any law, with those decrees having the same force as if Parliament had voted for them.

It was not popular with the commoners. The Act was repealed in 1547 and history’s verdict has been harsh. One 18th-century jurist said it “was calculated to introduce the most despotic tyranny,” and it is still considered the height of Henry’s will to power.

But legislation giving the whip hand to the executive branch of government, which scholars call King Henry the Eighth clauses, is still around. One such clause is prominent in the Carney government’s new Building Canada Act (BCA). It’s a major reason observers say the legislation marks a big shift in power to the prime minister and cabinet and away from the courts, Parliament—and the public.

“Cabinet, with cabinet secrecy, can pass a regulation that changes a law duly passed by Parliament,” Martin Olszynski, a University of Calgary resource law professor who testified before a Senate committee on the bill, told The Energy Mix in an interview. “That’s really radical.”

The Building Canada Act was hustled through Parliament last summer in less than a month. It was presented as a response to the perceived need to speed up environmental approvals for large industrial developments, responding in turn to the undoubted threats to the Canadian economy posed by the current United States government. Here, briefly, is how it works.

Project proponents who feel their idea is “nation-building” can apply to the Major Projects Office, a new agency created by the legislation. That office measures the proposal against five goals, including “whether a project will contribute to clean growth and addressing climate change,” according to the recent federal budget.

The office is to ensure both First Nations and provincial governments have been adequately consulted. It then makes a recommendation to the minister of internal trade. After 30 days to ensure the provinces and territories are onside, the minister can then declare the proposal a Project of National Interest, (PONI). Dawn Farrell, CEO of the Major Projects Office, told a House committee she hopes a decision on designation will take four or five months. The discussion will then change from whether to proceed, to how.

Who Wouldn’t Want a PONI?

Supporters say the legislation eliminates the need for companies to answer questions twice, once at an environmental assessment and again when they request permits from federal departments for specific actions—say, building a stream crossing.

“Half the job is getting through environmental assessment, getting your capital together, and announcing the project,” said Dave Nikolejsin, an adviser at the McCarthy Tétrault law firm and the former provincial deputy minister who oversaw natural gas development in British Columbia. “The other half, and sometimes the tougher half, is actually getting it built.”

Speaking on a podcast by the ARC Energy Research Institute, Nikolejsin said “What drives proponents crazy is they will go through massive expense and time to do a baseline study as part of an environmental assessment. Then they have to do it again when they turn to get their permits.”

A blog from the law firm Bennett Jones, which often represents fossil energy companies, made a similar point: “By cutting red tape and coordinating project approvals more efficiently, the MPO represents a significant effort by the federal government toward ensuring that Canadian infrastructure can be advanced to attract investors and boost the competitiveness of Canada’s project execution timing.”

Stacking the Deck

Well and good. Environmental groups and concerned citizens aren’t any keener than businesses to spend time and money in court or endless regulatory hearings. But observers suggest the Building Canada Act has stacked the deck, dealing aces to those in power and jokers to everyone else.

“Parliament has given cabinet really unprecedented power to exempt projects from environmental laws, in effect giving cabinet what are effectively law-making powers,” Anna Johnston, staff lawyer at West Coast Environmental Law, told The Mix.

Pierre-Alain Bujold of the Privy Council Office disputed this characterization in an email to The Mix. “Designation under the Act does not exempt projects from federal laws listed,” he wrote. “It provides upfront clarity and coordination, allowing projects to advance while maintaining protections for the environment and Indigenous rights, with reviews occurring simultaneously rather than consecutively”

“Once reviews are complete, the Minister responsible for the Act (the Minister of One Canadian Economy) issues a single, binding set of public conditions for the project, including mitigation measures.”

Still, questions begin with how PONIs are designated. Most projects won’t be.

Only a small minority of resource projects in Canada trigger a federal assessment. For those that might, Ottawa’s five criteria to determine which ones go through the magic gate are extremely broad. They ask if the project will improve Canada’s autonomy and security, if it will bring economic “or other” benefits, the likelihood of success, impact on First Nations, and environmental and climate effects. Opponents say they are so woolly that—except on the issue of First Nations rights—it would be extremely hard to challenge a project designation in court.

“The act was designed to give huge discretion to federal cabinet,” said Johnston. “It has such broad discretionary powers that I think the possibility of successful legal challenge would be difficult.”

An Environmental Assessment. Sort Of.

A designated PONI would still be subject to an environmental assessment. Sort of.

Before the Act, proponents were required to go through a six-month planning period before beginning their assessment. “That was an avenue for public input,” Johnston said. “That was where we were going to figure out what questions we were going to ask.”

Now, that’s gone, she said. “If you’re a PONI, you have to go through an impact assessment, but you start at the assessment phase, you don’t start at the planning phase.”

The planning period did sometimes spawn the kind of litigation that created crazy-making delays, but Olszynski told The Mix that dropping it shifts power significantly. “Removing that six-month planning period puts the responsibility for setting the terms of reference exclusively in the hands of the proponent.”

Government documents don’t address how reviews will be designed. They only stipulate they will occur. “Projects will continue to be subject to all regulatory review processes that would ordinarily apply to the project.”

The BCA hobbles environmental assessment and public involvement in other ways. Project proponents have been required by law to evaluate their proposals through certain lenses—consideration of cumulative effects, for example. Whether those lenses have been donned are often at the heart of legal disputes.

But PONI projects are “deemed” to have already met such requirements—even if we don’t know whether they have or not. And once something is deemed, it’s done, immune from judicial review.

“If we have any semblance of environmental law in this country, it’s because the courts have pushed that,” Olszynski said. “The fact they are being squeezed out of this space is not good.”

And if regulations are violated, thanks to our old friend King Henry, cabinet can simply alter them. “Cabinet can make a regulation exempting a project from any of the environmental laws,” said Johnston. Hearings may still be held, but the outcome is predetermined.

“It’s just a question of how, not whether,” said Olszynski.

Still, King Henry has his supporters. Nikolejsin sees the mechanism of deemed approval as “something huge (the BCA) has going for it.” As he sees it, that’s the scrubber which will scour away duplication and delay: “If you get through enough gates, whatever that’s going to look like, everything else is supposed to become about expediting things like permits.”

There are still some checks. Safety regulations from the Canadian Energy Regulator and the Canadian Nuclear Safety Commission aren’t subject to alteration. The BCA requires provincial consent for projects that concern exclusive provincial jurisdiction. And cabinet can remove a project’s PONI designation if, say, it’s deemed to ask for too much deeming.

Is This Legal?

You may ask yourself: is any of this legal? Well, maybe. Neither the Constitution nor common law guarantees public input into regulatory matters.

Or maybe not. Johnston said health and safety issues could provide grounds for constitutional challenges. As well, previous court rulings have found the government must consider all relevant information in regulatory decisions, something the BCA may inhibit.

“Even if the government went in and changed the regulations, that wouldn’t change the court rulings,” she said. “We’re in a legal grey area.”

The Quebec Environmental Law Centre is challenging the BCA in Quebec Superior Court. “The Act allows an excessive encroachment on provincial powers and delegates too much power to the federal government such that the population and the courts lose their ability to effectively control government decisions,” lawyer Marc Bishai told The Mix.

He said that while the BCA requires Ottawa to consult with provinces, that doesn’t mean provincial concerns will be heeded. “Consultation is one thing, but it can be set aside.” The Act also allows provinces to delegate powers to the federal government, something the Constitution forbids, he added.

Finally, he argues King Henry VIII has no place in a modern democracy. “By removing the levers that usually exist to control government decisions, this Act puts at risk the ability of courts to effectively verify whether those government decisions are legal,” he said. “That power of judicial review is protected by the Constitution. The ability of Parliament to reduce or set aside that role of the courts is limited.”

Of course, it’s early days for the BCA. So far, the government has only referred proposals to the Major Projects Office for PONI consideration, 11 of them at last count. As yet, there are no actual PONIs in the stable and no one knows what the process will actually look like. Farrell told the House committee that she expects no more than one or two projects will become PONIs. Still, she added that her office has received 500 applications and the Globe and Mail reported there are 32 projects on the potential list—a reminder that, with a law that hands such open-ended power to cabinet, anything could happen.

“How it’s going to be implemented fundamentally depends on who’s in power,” said Olszynski. “You could do radical things with this bill, if a government wanted to.”

Somewhere, King Henry is smiling.

The post Building Canada Act Gives Cabinet ‘Radical’ New Powers, Expert Warns appeared first on Thoughtful Journalism About Energy's Future.

By Mitchell Beer

With fossil fuel publicists touting decades of future demand, and those expectations baked into last week’s pipeline deal between Canada and Alberta, the global oil and gas industry already recognizes and is planning for its own decline, the UK-based Carbon Tracker think tank concludes in a recent review.

“A clear-eyed analysis reveals an oil and gas industry already conducting a quiet, rational, strategic retreat from long-term growth, despite public bravado from its supporters in the stands,” analysts Harry Benham and Guy Prince write in a Nov. 12 blog post.

“The cold data shows a sector preparing for plateau and decline, rewarding investors who push for harvesting with dividends and buybacks, and leaving investors who believe the growth rhetoric dangerously exposed.”

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• Separatists Boo Smith While the Clueless Bros Pitch a Pipeline

This “say vs. do” chasm is playing out “in real-time company boardrooms and capital allocation plans,” Carbon Tracker concludes. The post cites four trends that contradict the “political rhetoric of robust future fossil demand”:

• Capital expenditure (“capex”) in the industry still stands at US$500 to $600 billion per year, but that’s about 40% below a peak of nearly $900 billion that now dates back more than a decade. “The industry has rationally concluded that this leaner, more efficient level of investment is sufficient to meet slowing demand and maintain a production plateau,” the blog post states. That makes the industry’s refusal to increase investment a “powerful vote of no confidence” in the notion of endless future growth.

• Spending on exploration for new oil and gas wells has fallen by about 60% in the last decade, and the major, new projects recently reported in Brazil are likely “more ornamental than truly productive and profitable”, with the world unlikely to need the new oil by the time the projects are ready to deliver it in 10 to 15 years.

• Credit agencies like Standard & Poors and Fitch Ratings have downgraded the sector after “listening to the numbers, not the speeches.” Those decisions show analysts “increasingly [treating] major new greenfield fossil fuel projects as potentially stranded from the day they are announced.”

• The continuing news of oil and gas mergers and acquisitions show a different kind of stranding, with bigger corporate players absorbing assets that aren’t meeting their revenue targets. “This is not production growth,” Carbon Tracker writes. “It is financial engineering—shuffling existing assets to cut costs and maintain dividends, and certainly not to expand a resource base.”

While not all companies are pursuing this new strategy, the ones that don’t “are increasingly punished by the market,” the authors state. “But legacy structures and political pressure still lead to capital misallocation at the margins—a key risk for investors to resist.”

Cooking the Books

Carbon Tracker posted its analysis just as the International Energy Agency was releasing its latest World Energy Outlook, long styled by the IEA as the “gold standard of energy modelling”. After months of intense arm-twisting from the Trump administration to cook the books and align its modelling with a “drill, baby, drill” agenda, the IEA resurrected its Current Policies Scenario (CPS) in this year’s WEO. It showed that rising oil and gas demand through 2050.

But that projection was just one of three in the WEO, and amounted to “a triumph of political gesture over foresight,” Benham and Prince state. “The CPS—which assumes no new climate policies at least until 2050—is a backward-looking relic that ignores the seismic shifts already reconfiguring the global energy system.”

That makes the CPS “a warning, not a forecast: it implies energy innovation stops in 2030, as if hitting some sort of intellectual brick wall,” they write. The reality on the ground is that “the pillars of oil demand growth are crumbling in real time, and irrespective of price—something front-line oil industry instinctively knows and can see.”

A Fossil Industry Collapse in Five Acts

Carbon Tracker says the collapse is being driven by these factors:

• Global gasoline demand is set to peak this year as vehicles electrify. “This isn’t a future prediction; it’s a present-day reality as EVs are on track to displace four to five million barrels per day of demand by 2030.”

• China is going through a “stunningly fast transition that undermines the core assumption of endless Asian fossil-demand growth,” with oil demand growth already declining and power sector emissions set to peak this year as renewables push coal below 50% of total generation.

• Growth in demand for petrochemicals and aviation fuels “cannot possibly offset the sweeping declines in road transport and power generation. They are a fleeting respite, not a revolution.”

• Liquefied natural gas (LNG) has drawn too much investment, so that any new expansion will threaten the financial viability of existing projects facing a global glut.

• Investors are voting with their dollars, with annual investment in renewable energy, grids, and electrification hitting $2.2 trillion per year, nmore than double the remaining capital expenditures in oil and gas.

“The market is already building the post-oil energy system, recognizing that fossil fuels, while important, are a diminishing part of a very new and different, larger energy mix,” Carbon Tracker states. And the pattern of the industry’s own investments “recognizes the very transition that industry supporters attempt to dismiss.”

That quiet retreat “is perhaps its most rational act in a decade,” Benham and Prince conclude. “The great irrationality now lies with investors who mistake this harvest for a rebirth, and with policy-makers who resuscitate outdated forecasts. The industry is no longer led by multi-billion-dollar, high-risk engineering megaprojects, but by sober capex reduction, and cash flow diverted into investors’ pockets.”

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By Naveena Sadasivam

When President Donald Trump took office, he promised to “unleash American energy” — and quickly left no doubt that he meant fossil fuel energy in particular.

In the months since, he has opened up vast stretches of public lands and U.S. oceans for drilling and reduced the royalty rates that companies must pay for extracting oil and gas in those areas. His administration has also proposed scrapping environmental rules requiring polluters to report their emissions to the EPA, easing regulations for oil and gas wastewater disposal, and rewriting rules to weaken risk management protocols at refineries. And by declaring a national energy emergency, Trump has cleared the way for faster permitting primarily for fossil fuel infrastructure, bringing down review timelines from multiple years to a few weeks. Trump’s signature legislation, the One Big Beautiful Bill Act, quietly included billions of dollars in new federal tax breaks available to fossil fuel companies. More substantially, it dramatically scaled back federal support for wind and solar energy, as well as electric vehicles — effectively dealing a blow to the newer technologies competing with oil and gas interests.

But the boom times Trump has promised U.S. fossil fuel producers have not materialized. In fact, the industry is headed in the opposite direction: In recent months, Chevron said it would cut as much as one-fifth of its workforce, ConocoPhillips announced plans to let go of up to a quarter of its workforce by the end of the year, and Halliburton began its own round of layoffs. Across the sector, companies have also been reining in spending, cutting capital expenditures, pausing or canceling major projects, and reducing rig counts.

“We believe we are at a tipping point for U.S. oil production at current commodity prices,” warned Travis Stice, CEO of Diamondback Energy, a Texas-based oil and gas company, in May. “Today’s prices, volatility, and macroeconomic uncertainty have put [the industry’s] progress in jeopardy.”

Since Trump’s inauguration in January, crude oil prices have dropped nearly 20 per cent. That’s left prices below the roughly $65-per-barrel level where most U.S. producers can expect to break even on drilling, and they’re cutting back in anticipation of these unprofitable extraction conditions lasting into 2026. Indeed, the Energy Information Agency projects that oil prices, which currently sit at about $62 per barrel, will drop to $51 per barrel next year.

This reflects the makeup of the global oil market, which Trump has far less control over compared to the domestic regulations he’s attacked. In Saudi Arabia, for instance, where drilling costs are among the lowest in the world, a barrel of oil costs at most $10 to extract. So when the global price of oil drops, as it has this year, American producers feel the squeeze — but national oil companies in the Organization of Petroleum Exporting Countries, or OPEC, continue to be profitable.

So even though Trump has called for more drilling to lower domestic gasoline prices, American companies see little reason to pump more oil when prices are below the break-even point. The result reveals a paradox in the administration’s pursuit of what it calls “energy dominance”: It wants both lower prices and more drilling, but the former automatically discourages the latter.

“The goal of energy dominance is perhaps not fully aligned with the goal of low oil prices without significant innovation,” said Susan Bell, a senior vice president at Rystad Energy, an independent research firm, in an emailed statement. “Increasing U.S. production in a world that is oversupplied with oil in the near term would certainly drive prices down, ultimately making investment in the sector uneconomic.”

That disconnect has been on full display this year. Even as Trump promised boom times for the oil and gas industry, he has called on OPEC to increase production as a means to fulfill his promise to lower gasoline prices for Americans. In a January speech, he told OPEC to “bring down the oil price,” and in March he said that it was “very important that OPEC increase the flow of oil” in a social media post on X, the platform formerly known as Twitter.

The following month, OPEC announced it would increase production at a time when oil prices were already at a four-year low, taking industry analysts by surprise. While the move may have been an attempt to appease Trump, it was also an opportunity to assert dominance over American companies and increase the cartel’s market share. The increased production also acts as a buffer against price volatility by creating oversupply that can be tapped in times of crisis. There has been no shortage of the latter in recent years, with escalating conflict in the Middle East and the ongoing Russia-Ukraine war.

“All this extra supply creates a cushion,” said Trey Cowan, an oil and gas analyst at the Institute for Energy Economics and Financial Analysis, which tracks the rise of renewable energy and its impact on fossil fuels. “Events like the hunting down of people in Qatar by Israel — normally, that would be a crisis situation. Oil prices would spike tremendously. And while they did surge, they came right back down.”

Trump’s tariffs haven’t helped the U.S. fossil fuel industry either. His surcharges on steel and aluminum, two metals ubiquitously used in oil and gas infrastructure, have increased the cost of production. “The cost of our largest drilling input cost, casing, has increased over 10 per cent in the last quarter due to steel tariffs,” Stice, the Diamondback Energy CEO, noted in his letter to shareholders.

Cowan said that, while oil prices rise and fall periodically, the industry is facing a highly volatile market at a time when gasoline demand is poised to take a hit from the growing adoption of electric vehicles. In its drive to find new markets, the industry invested heavily in refineries producing plastics. But there, too, the industry is now facing oversupply and slim profit margins.

“You’re running out of places to use the oil, so then you’re creating an oversupply condition that’s going to continue for a longer period of time,” said Cowan. “There is some expectation that oil prices could be lower for an extended period of time.”

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By Jim Stanford

Canada has long striven to be more than a mere supplier of raw resources to more developed trading partners.

From the national policy of the 1870s, to the industrial planning of C.D. Howe after the Second World War, to the Canada-U.S. auto pact of 1965, our economic development strategy tried to nurture secondary and tertiary sectors that add value to primary resources instead of just exporting them raw.

Through the latter half of the 20^th century, this strategy largely succeeded. Value-added industries were built in auto, aerospace, pharmaceuticals and technology – in some cases by Canadian-owned businesses, in others relying heavily on foreign investment.

By 2000, less than one-fifth of Canada’s merchandise exports were unprocessed or barely process primary products. We were no longer just “hewers of wood, drawers of water.”

Unfortunately, much of that progress has been undone in this century – for a variety of reasons, heightened recently by U.S. President Donald Trump’s tariffs and other economic threats. Today, primary exports make up almost half our merchandise exports.

The federal government should use every tool at its disposal to craft a targeted industrial policy to reverse the current trend toward precarious over-dependence on resource extraction and export.

More than “diggers of critical minerals”

After entering a free-trade agreement with the U.S. in 1989, Canadian governments retreated from proactive industrial strategies, instead relying on our supposedly privileged access to U.S. markets.

The commodities boom of the 2000s reinforced the focus on resource extraction – first and foremost, the massive expansion of bitumen production and export. Evolving global competition, including the rise of China and Mexico as manufacturing powerhouses, further challenged our value-added export industries.

Now, Trump is hammering more nails into the coffins of Canada’s value-adding industries with his targeted Section 232 tariffs.

It’s no coincidence these tariffs are aimed squarely at Canada’s most important high-value manufacturing. To date, his sectoral tariffs have targeted auto, aluminum, steel, copper and lumber, while aerospace, heavy trucks, pharmaceuticals and semiconductors are next in his crosshairs.

Trump’s various tariffs, including the so-called “emergency tariffs” levied under the International Emergency Economic Powers Act, are being challenged in various U.S. courts. However, the worrying erosion of the rule of law in the U.S. leaves Canadians with little confidence that his unilateral measures will be significantly constrained.

Trump is happy, it seems, to keep importing Canadian raw materials, which he treats more leniently, with lower tariffs on energy and potash, as well as CUSMA exemptions (for now, anyway) for most other primary products.

His goal is clearly to increase U.S. industrial dominance in the sectors that transform raw resources into more expensive value-added products – the very sectors Canada must defend and grow.

Otherwise, Trump’s trade war will pigeon-hole Canada as a continental resource pit – and a lucrative market for America’s more innovative (and expensive) exports.

To “hewers of wood and drawers of water” we would then add “steamers of bitumen and diggers of critical minerals.” The economic, geopolitical and environmental risks of this structural retreat from value-added industry are worrisome.

Therefore, this is the moment for Canadian policymakers to rediscover the importance of targeted industrial policy, which is essential to help our value-added industries survive Trump’s attacks and to reverse Canada’s over-dependence on resource extraction and export.

Believers in the traditional “comparative advantage” theory see little wrong with a country being so reliant on production and export of a specialized portfolio of unprocessed resources. If that’s what global markets want from a country, it should simply go with the flow, they believe. Accepted fully, this approach leads to ahistorical and fatalistic passivity in trade policy.

As Nobel economist Paul Samuelson famously quipped, the fact that “the tropics grow tropical fruits because of the relative abundance of tropical conditions” is hardly useful for a country that wants to do more than export bananas. The same warning applies to other countries that can’t see beyond the limited horizon of their immediate resource endowments.

The industrial success of Asia 

Contrary to comparative advantage theory, the most successful global examples of industrialization in the last century have been countries such as Japan, Korea, the other Asian “tigers” and China. They – more often by necessity than choice – did not focus on building industries based on what was buried beneath their feet.

Instead, they mobilized capital, skills and technology to carve out competitive (not comparative) advantages in strategically important and growing high-value industries.

Those efforts relied on powerful state-directed strategies to twist markets and alter incentives. Many tools were invoked – all with the overarching goal of expanding domestic capacities to manufacture, innovate and export higher-value products and services.

Comparative-advantage thinking says “export what you were endowed with.” Good industrial policy acknowledges it’s better to specialize in some industries than others, especially industries that are technology-intensive, export-oriented, anchor valuable supply chains and demonstrate high and rising productivity.

Instead of relying on resource endowments and private markets alone to guide a country’s specialization in global trade, these countries take deliberate action to build a presence in targeted, desirable sectors.

They have all used a wide range of industrial policy levers to become global manufacturing giants. These include channeling capital (including public or sovereign wealth) to targeted industries on favourable terms; powerful public-private missions to develop and commercialize strategic technologies; and complementary investments in skills and infrastructure to lubricate the high-value export machine.

Many European countries have followed broadly similar strategies, using public capital, planning, regulation and knowledge to nurture successful global firms and high-value domestic production.

Even the U.S., while mouthing free-market jargon, relies regularly on powerful, targeted interventions, including massive defence and energy subsidies, to buttress its presence in strategic industries.

These lessons of successful industrialization have renewed relevance for Canada as we confront Trump’s economic aggression.

Some have concluded Canada should double down on extraction and export of natural resources – facilitated by new pipelines and other export infrastructure to sell our resources to countries other than the U.S. But the urgent task of export diversification needs to take account of what we produce, not just where we sell it.

Enter industrial policy, which holds new relevance for Canada as we try to protect our economy and our sovereignty against Trump’s erratic actions. Good industrial policy draws on a full suite of policy measures applied to shift incentives, motivate investment and innovation, reinforce the vitality of domestic industry and penetrate high-value export markets.

Call it “sector-development policy” 

The tools of industrial policy are many and varied, including fiscal rules and incentives, technology supports, preferential access to capital, public investment (including public equity or co-investments), infrastructure construction, skills and training support, trade policy, government procurement and more.

These tools need to be applied creatively and flexibly, reflecting the specific challenges and opportunities of each sector. Governments need strong internal capacity to understand and manage industrial policy (to avoid being captured by rent-seeking businesses). As well, the goals and performance requirements need to be explicit and enforced.

Industrial policy doesn’t apply only to conventionally understood industry, which is often stereotyped as large-scale goods-producing facilities, such as resources and manufacturing.

Any technology-intensive, high-productivity, tradeable sector – including technology, business, digital, entertainment or education services – is a candidate for targeted attention. A better moniker for this theme might be “sector development policy,” moving past the outdated assumption that industrial policy is only about smokestack industries.

A fully capable industrial nation must do more than harvest resources. This has always been true.

The global energy transition – which will continue despite Trump’s best efforts to roll back history – gives further impetus for Canada to diversify beyond fossil fuels.

The current concern with Canada’s lagging productivity growth provides another important motive. Indeed, it’s no coincidence that the countries leading productivity growth globally (such as Korea, the U.S. and Ireland) are those with the biggest domestic presence of high-tech production.

Those industries didn’t end up there by accident or thanks to the autonomous logic of market forces. They ended up there because those countries undertook targeted efforts to attract and build them.

Trump’s trade war is forcing our governments, businesses and workers to collectively renew Canada’s historic crusade to build an economy that is more than a northern appendage to a larger, more developed neighbour.

A comprehensive industrial strategy – using every tool to add value to our resources instead of exporting them raw, and sustaining and growing a strong Canadian footprint in innovative value-adding industries – needs to play a central role in that nation-building mission.

The post Opinion: Only targeted industrial policy will fulfil Canada’s value-adding potential appeared first on Thoughtful Journalism About Energy's Future.

By Alexander Bressers, Senior Oil Market Analyst

Oil prices are one of few tailwinds at the moment for global oil consumption in the face of a challenging macroeconomic backdrop and the increasing uptake of electric vehicles. Crude oil is currently trading near multi-year lows – about $15 per barrel below this year’s high.

On the face of it, one might expect prices at these levels to spur demand in developing countries, where oil‑intensive sectors such as mining, agriculture and heavy industry can drive a significant share of output. Moreover, since energy is a basic necessity, it frequently accounts for a comparatively high share of household expenditures in less affluent nations. It would follow, then, that consumption would be particularly sensitive to oil price changes.

Yet oil demand in developing nations has been less sensitive to recent price movements than consumption in advanced economies, our analysis shows.

Using data from GlobalPetrolPrices, which tracks what drivers around the world pay at the pump, we calculated by country the correlation between retail prices in local currency and wholesale prices on global gasoline markets. These generally follow crude oil prices closely, typically trading at a differential termed the “crack spread” that reflects an oil refinery’s profit margin from converting crude oil into gasoline.

This analysis showed that from January 2022 to May 2025, the average demand‑weighted correlation between global gasoline prices and prices at the pump was 77 per cent among member countries of the Organisation for Economic Cooperation and Development (OECD). This was about twice as strong as in other economies, where it was 39 per cent. The equivalent correlations for diesel were similar: 77 per cent and 38 per cent, respectively.

Understanding the looser relationship between retail prices and demand in emerging economies

This weak linkage between wholesale and retail prices stems from the prevalence of government price controls and state subsidies for oil in many emerging and developing economies. This is particularly apparent in major oil and gas producers in the Middle East. In Saudi Arabia, Kuwait and Qatar, gasoline prices at the pump have remained essentially unchanged for years. In large swathes of Asia, including India and Malaysia, these prices have also barely moved – or only faintly reflected developments in oil and currency markets, as is the case in China.

State intervention in oil market dynamics is no less common in advanced economies. However, these governments typically deploy fuel taxes rather than subsidies or price freezes (although this distinction is not absolute: for example, Japan’s extensive scheme of fuel subsidies renders it an outlier). As a result of these taxes, retail prices for gasoline and diesel tend to be much higher. Crucially, however, the taxes do not block the link with international oil markets – though the type of tax used determines the extent. Excise duties, which are quantity based, result in less of a link than value-added taxes, which are calculated based on price. Countries with low excise taxes, like the United States, therefore retain a clear transmission of market signals and a strong demand correlation to prices.

The impact of oil price and currency movements on short-term forecasts for oil demand

This structural disparity is an important factor in the different trajectory we see for oil demand in advanced economies compared with trends in developing countries this year. The IEA currently forecasts that global oil consumption in 2025 will rise by less than 700 000 barrels per day compared with 2024 – about 350 000 barrels per day less than our estimate at the start of the year. This downgrade since the beginning of 2025 is almost entirely attributable to lower-than-expected demand in emerging and developing economies.

Conversely, demand in advanced economies has proved resilient in the face of macroeconomic headwinds, supported by a relatively cold winter that boosted oil use for heating. Importantly, falling pump prices have also acted as a key support.

The impact of the drop in retail prices in some developed markets has been magnified by currency movements – most notably in Europe. Global oil prices and the US dollar have historically tended to move in opposite directions, with a weaker dollar typically coinciding with firmer oil prices. However, this trend has broken down in 2025, with a softer dollar accompanied by lower oil prices. (The US Dollar Index and benchmark Brent crude prices are each down about 10 per cent year to date.) Since global oil markets are priced in dollars, a weaker dollar reduces the cost of oil in local currencies for importing countries, incentivising demand.

The greenback’s decline has been most pronounced against the euro, which has risen 13 per cent against the dollar. The MSCI Emerging Market Currency Index has only appreciated by 6 per cent, with investor sentiment towards developing economies weighed down by turmoil over tariffs.

Partially as a result of this euro strength, we see oil demand in Europe growing by 20 000 barrels per day in 2025. That’s a notable change from the contraction of 80 000 barrels per day that we had forecast at the start of this year. This upward revision stands in marked contrast to downgrades in the consumption forecasts for most regions of the world in 2025.

 

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By the Petroleum and Liquid Fuels Markets Team

During the first quarter of 2025 (1Q25), crude oil prices generally decreased while U.S. refinery margins initially increased before decreasing in the final month of the quarter. In this quarterly update, we review petroleum markets price developments in 1Q25, covering crude oil prices, refinery margins, biofuel compliance credit prices, and natural gas plant liquids prices.

Crude oil prices
After reaching a quarterly high of $82 per barrel (b) on January 15, crude oil prices generally declined through the end of the first quarter, settling at $75/b on March 31. Although our preliminary world petroleum supply and demand estimates suggest global consumption outpaced production—which typically puts upward pressure on prices—oil prices largely fell following concerns surrounding future economic growth.

According to the U.S. Bureau of Economic Analysis, U.S. GDP declined 0.3 per cent in 1Q25. This marks the first economic contraction since 1Q22. Economic growth concerns weigh on oil prices because a decline in economic activity reduces demand for oil.

Refinery margins
U.S. refinery utilization started 2025 at 93 per cent but fell below 90 per cent beginning in mid-January, ending the quarter at 86 per cent. Midwest utilization was particularly high, remaining above 90 per cent through all but the last week of the quarter. West Coast utilization fell from 80 per cent to 90 per cent in January and February to below 75 per cent in late March, partly due to an outage at PBF Energy’s Torrance refinery as well as a major outage at the company’s Martinez refinery, both in California. East Coast utilization started the year at 83 per cent but decreased below 60 per cent in late February and through March, ending the quarter at 59 per cent. This reflects normal spring maintenance and a major turnaround at Phillips 66’s Bayway refinery in Linden, New Jersey. After undergoing seasonal maintenance, Gulf Coast utilization began increasing in March going into the second quarter as refiners prepare for the summer demand season.

In February, refinery crack spreads—a proxy for refining margins—for gasoline were about 35 cents per gallon (cpg) at New York Harbor, about 8 cents above the 2020–24 average. Los Angeles crack spreads were about 70 cpg in February, about 9 cents higher than average. In March, crack spreads fell to 23 cpg at New York Harbor and 61 cpg at Los Angeles, both below their five-year averages for the month. Crack spreads for distillate fuel oil, which had been below average through most of 2024, increased this winter. This increase is partially supported by heating oil consumption in response to cold weather.

Biofuel compliance credit prices
The prices for biomass-based diesel (D4) and ethanol (D6) renewable identification number (RIN) credits—the compliance mechanism used for the Renewable Fuel Standard (RFS) program administered by the U.S. Environmental Protection Agency (EPA)—have been higher in 1Q25 than in 2024 because of higher feedstock prices and less production of biodiesel and renewable diesel—the two fuels that generate most D4 RINs. RIN prices peaked in late February and again in late March, when they were higher than at any time since 2023.

In 1Q25, D4 RINs traded at a slight premium to D6 RINs because of low biomass-based diesel production. We estimate that the combined domestic production of biodiesel and renewable diesel for January 2025 decreased by about 30 per cent from the previous month to about 230,000 barrels per day, the least since December 2022.

Natural gas plant liquids
The natural gas plant liquids (NGPL) composite price at Mont Belvieu, Texas, rose 10 per cent in 1Q25 compared with the previous quarter to an average of $8.10 per million British thermal units, driven by gains in ethane and propane prices.

Most NGPL prices follow crude oil prices, except for ethane, which is linked to natural gas prices. Ethane prices climbed 4 per cent from January 1 to March 31, following a sharp rise in the Henry Hub natural gas price (21 per cent). Propane prices increased 7 per cent because of strong heating demand this winter, especially in January. Normal butane and isobutane prices decreased about 20 per cent over the quarter, dropping at a faster rate than West Texas Intermediate crude oil prices. Natural gasoline prices fell 1 per cent throughout 1Q25 and have been at a premium to crude oil prices on a heat-value basis.

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By Mitchell Beer

The astonishing thing about the last week is not that Donald Trump went ahead with his threat to blow up the global trading system by imposing tariffs on about 60 countries, including two economically mischievous islands populated only by penguins.

It’s that the rest of the world was so fast to push back, ready and determined to move on from an era of U.S. economic dominance.

That a promising approach to building a new trading bloc that bypasses the rogue regime in the White House has gone from online conversation to serious proposition in scarcely a week.

That if you survey the scene from just the right angle, a new, emerging bloc might be able to cover more ground and tackle multiple problems at once by pivoting to low-carbon goods and real decarbonization technologies.

And that Canada might yet place itself at the centre of this emerging new coalition of the willing, as long as our next federal government has the insight and inclination to play along.

In the last 100 or so hours we’ve seen a fast flurry of analyses on the slapdash, amateur-hour process behind Trump’s tariff announcement, the immediate impact on jobs, the shock reaction from global stock markets, and the apparent certainty that this spells the end of global trade as we’ve known it.

But there are more interesting, even hopeful and positive questions to ask, beginning with:

If every end is also a beginning, what’s next?

If the tariffs are really dealing a death blow to the established international trading system, what if this undercuts the fossil fuel industry as badly as Trump’s direct hostility and interference have devastated the U.S. renewable energy sector and climate justice community?

For Canada, now that we’ve declared that there’s no way back to an era when our economy was over-dependent on our neighbour to the south, what else do we gain by getting closer to countries that are farther along on their climate and decarbonization journey?

And how can we work with our future trading partners to accelerate the shift?

Sleeping Beside an Elephant

For Canada, that response begins with a level of unity and shared purpose that we haven’t seen in many decades. It extends into some serious, long-overdue conversations about how to make our economy truly independent. We’ve always known we were sleeping beside an elephant, as Prime Minister Pierre Trudeau told the Washington Press Club in 1969. But there’s been little serious talk about dialling up our economic relationships in other parts of the world sufficiently to dial back our dependence on the U.S.

Until now.

It was only about a week ago that I first saw Social Capital Partners Chair Jon Shell suggest a new trading bloc with the economic clout to survive, thrive, and leave the United States behind.

“We know what Donald Trump is afraid of,” he wrote on LinkedIn. “Now let’s organize around it.”

The EU, UK, Canada, Japan, South Korea, and Australia (I’m now calling them “EU + 5”) collectively have 760 million people and control 34 per cent of the global economy and vast quantities of natural resources. We are an obvious threat to the U.S. and to China if we were to organize.

The best way to beat a bully is for the rest of the group to rise up against him.

The rest of Shell’s scenario is that much more plausible in the year when Canada holds the rotating chair of the Group of 7 forum of industrialized nations, and will be hosting G7 summits over the next few months.

The most powerful signal to give Trump would be for this group to meet in a very public way, ideally in Canada, so the meeting would play out on American TV in the right time zones. The stats on the economic and resource might of this new group would scroll across the bottom of Fox News. [If we can assume that Fox would even carry the story—Ed.]

A joint statement at the end pledging to work together as friends and allies to ensure a resilient and prosperous future for our populations would be a powerful message. Quick wins could be action on Ukraine and munitions manufacturing.

First and last, it needs to be 100 per cent clear—and for Trump, spelled out with a Sharpie in simple, single-syllable words with lots of golf analogies—that no one is taking this lying down.

“My strong recommendation to Canada, Mexico, Japan, the United Kingdom, and the European Union is to join together to create a free trade zone that excludes the United States, imposing at least a 10 per cent tariff on all imports from America,” writes Bill Clinton-era U.S. labour secretary Robert Reich. “Don’t negotiate. Do this now so you’ll be negotiating from a position of power.”

G7? Meet the ‘Free 7’ (By Comparison)

And by declaring an emphasis on clean energy and decarbonization trade, the countries could jump-start their economies after Trump’s tariff attack, boost affordability and local self-reliance across the entire bloc, support Ukraine’s reconstruction, and prevent military conflict in the first place—and oh, by the way, move closer to meeting their climate targets.

The focus on climate and carbon would be consistent with the accelerated priorities the European Union has been setting since 2022, when Vladimir Putin’s invasion of Ukraine turned energy efficiency and renewables into a geopolitical security strategy for countries that were too dependent on Russian gas.

And this general line of thought is quickly gaining traction. Within a week, the idea of a wider trading bloc had broken out from social media and Substack newsletters to general media in a Toronto Star post by John Austin, a nonresident senior fellow at the Washington, DC-based Brookings Institution. His formulation brings together the EU, Japan, the UK, Canada, Mexico, South Korea, and Thailand in a group of nations that “would dwarf the U.S., as well as the economies of China combined with its ally Russia.”

Given America’s new stance, now is the time for the G7 member nations to disinvite the U.S. from the group, and morph to a new organization: a “Free 7.” It would be a new forum in which the nations that still believe in democracy, free markets, freedom of expression, and free trade would collaborate to strengthen their collective hand and push back against authoritarians—which now includes the U.S.

The work of the new Free 7 would be the urgent task of building an international coalition that stands up to the authoritarian axis—and successfully contains it. This means standing up to pressure from the U.S.

Take this as a thumbs-up for the basic idea, not necessarily the branding Austin attaches to it. It would take a whole other edition of The Weekender (or more) to unpack what we mean by “Free” and how well or widely it applies to the countries in the group, certainly including Canada.

But the point of contrast with full-on authoritarians like Trump still makes a lot of sense—to counter the rush to fascism that we’re seeing in the U.S. and, if it goes this way, to reignite the response to climate change and the energy transition. That general line of thought makes South Korea an interesting addition to the group after an unequivocal population pushed back against an egregious assault on the country’s democracy—unlike their U.S. counterparts, who splintered in response to Trump’s 2020 election loss and the deadly insurrection attempt that followed.

Things Are Moving Fast

The good news is that the global response has been far faster than Trump’s on-again, off-again rollout. And (set the bar low enough) pretty much infinitely smarter.

Trump’s response to the EU+ concept shows he was feeling the heat before he even made the announcement. “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs (sic), far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” he ranted in late March, in what the New York Times politely cited as a “middle-of-the-night social media post”.

Of course, there’s just one possible response to that: As Jon Shell wrote last week, “time to get started.”

Particularly when so many other responses to Trump’s mob boss rule are beginning to produce whiplash in Washington. In the couple of weeks:

• People in all 50 states took to the streets yesterday, joining an estimated 1,300 local rallies in a massive Hands Off protest. Organizers in Washington, DC initially told the National Parks Service they expected 10,000 people at the Washington Monument, then upped their estimate to 20,000 on Friday night. On Saturday, police began closing off adjacent streets after the numbers swelled to 100,000 or more.

• The protests, along with the result of three special elections last week in Wisconsin and Florida, capture the state of U.S. public opinion before the tariffs bite. “In a few days’ time, every desirable consumer good will be dramatically more expensive in the United States than on world markets,” writes former George W. Bush speechwriter David Frum, in a post for The Atlantic titled Make Smuggling Great Again. “Flat-screen TVs, athletic shoes, video-game equipment, even household basics such as coffee, toilet paper, and soy sauce—all will soon cost 20, 25, 35 per cent more than they cost on world markets.”

• The U.S. stock market has just gone through its deepest crash since the early days of the COVID-19 pandemic.

• The Federal Reserve Bank of Dallas is warning that Trump’s trade policies and assorted ravings will undercut the fracking industry’s expansion plans (yes, okay, they said it more gently), and experts elsewhere say tariffs could disrupt plans to expand U.S. exports of liquefied natural gas (LNG). Not a great return on the $219 million the fossil industry reportedly invested to bring their hired hand back to the White House.

“The administration’s chaos is a disaster for the commodity markets. ‘Drill, baby, drill’ is nothing short of a myth and populist rallying cry,” one Texas fossil executive told the Dallas Fed. “Tariff policy is impossible for us to predict and doesn’t have a clear goal. We want more stability.”

Another exec complained: “The keyword to describe 2025 so far is ‘uncertainty’ and as a public company, our investors hate uncertainty.”

• China, ever ready to widen its clean energy lead every time Trump takes office and the U.S. falters, is declaring the energy transition “irreversible” and now expects to see its climate pollution peak ahead of its 2030 target date “due to the plunging costs of renewable energy,” Bloomberg reported late last month. Chinese electric vehicle giant BYD plans to double its overseas sales this year, to 800,000 vehicles, and analysts say U.S. auto tariffs will position Chinese EVs to “race ahead”, the Financial Times writes.

• Less than 100 days into his second term, Trump’s wrecking ball approach to America’s economy and its most basic institutions and guardrails has 75 per cent of the country’s scientists ready to leave for Canada or the EU, according to a poll for the journal Nature. (And if any of you soon-to-be scientific expats are reading this, Canada is ready to offer you a warm welcome.)

“These are terrifying numbers, if true,” wrote U.S. blogger John Ellis. “Even if only 35 per cent of the best young scientific minds in the United States are seriously considering living and working elsewhere, the numbers are still terrifying. Brain drain is always a disaster. Nothing good comes from it. The downside is enormous. And the more that leave, the more will follow.”

• And all along, global leaders who stand up to Trump are getting the kind of reward they crave, the positive reinforcement they understand best: from Canada and Mexico to Ukraine and France, “leaders across the world have seen a bump in their public approval since Trump came to office,” the Financial Times writes. Canada’s shift toward Mark Carney’s Liberal party has been by far the most dramatic, but Nathalie Tocci, director of Rome’s Institute for International Affairs, pointed to a wider trend.

“You have this bully that is smashing the system,” she told the Times. “Rather than just kissing the ring, these leaders basically stand up and politely say ‘no’, and their voters appreciate the fact that they are not being colonized.”

Time to Stand for What Matters

In a Toronto Star op ed this week, Savanna McGregor, Grand Chief of the Algonquin Anishinabeg Nation Tribal Council, says Conservative Leader Pierre Poilievre’s “Canada First” National Energy Corridor doesn’t meet that standard.

Reading Mr. Poilievre’s announcement, I am left wondering why it does not mention Indigenous people even passingly, other than to expect fancifully that we give “approval … before any money is spent.” Surely he knows Canada’s constitution requires Indigenous consultation, accommodation, and ultimately consent to build major infrastructure inside his National Energy Corridor? How can there be consultation (to say nothing of accommodation and consent) if the corridor is “pre-approved” before anyone has the blueprints for what infrastructure will be built and where?

McGregor asks how city dwellers would respond to word of a “pre-approved” major development in their own back yard, with no indication of whether it’s a school, a shopping mall, or a radioactive waste dump.

It sounds ridiculous and contemptuous, yet this is exactly how Mr. Poilievre and many others hold Indigenous communities today (there is a radioactive waste dump on Algonquin land right now). Obviously, pushing a development decision without identifying the development would never fly in a city where the residents have no constitutional right to be consulted—so it definitely will not fly for Indigenous people having that right.

“Ironically, the pre-approved corridor Mr. Poilievre wants to speed development up would nearly paralyze it,” McGregor writes, citing court cases that would slow down a campaign promise that she describes as a “war with Indigenous nations”.

Then there’s the question of who gains if those projects are fast-tracked. In a separate post for the Star, Toronto Metropolitan University associate professor Shari Pasternak and Emily Lowan, fossil fuel supply lead at Climate Action Network Canada (of which Energy Mix Productions is a member), connect dots to some of the main movers and shakers in Trump’s inner circle. Which means that projects like the Prince Rupert Gas Transmission (PRGT) pipeline and the Ksi Lisims LNG export terminal “are now making Canada vulnerable to Trump’s predatory goal of North American energy dominance.”

Pasternak and Lowan write:

The solution is not to copy Trump’s “drill, baby, drill” approach with a thin gloss of maple syrup over top; it is respect for Indigenous jurisdiction and a just transition from fossil fuels to clean energy. Canadian pride should come from ethical investment and reconciliation—not backstopping U.S. corporations.

We’ve all heard the too-easy, too-glib line that a crisis is a terrible thing to waste. And once, just once, I wish the pundits and prognosticators who keep talking that way would turn their attention to the climate crisis and the fossil fuel industries that drive it. Or the nature and biodiversity crisis. Or the food security crisis. Or the multiple, wrenching human rights crises going on around the world as we virtually speak. No need to be fussy.

But here’s the thing so many of us have been hoping for—since the U.S. election result in November, and since around 8:10 PM Eastern last June 27, as we watched then-U.S. president Joe Biden implode onstage in his debate against Trump. Faced with the worst we’ve ever seen from Trump, the #ElbowsUp mantra is extending far beyond Canada, into a global coalition so wide that it might be able to withstand this moment, recover, thrive—and thrive green.

There are no guarantees, and it’ll take a while to see how things land. But the first step in building the solution we need is to envision it. And over the last week, that’s been happening.

The post Opinion: The world will move on from Trump tariffs. How should a new trading bloc show up on energy and climate? appeared first on Thoughtful Journalism About Energy's Future.