In North America, the oil and gas industry is not only central to the economy but also a critical component of the relationship between Canada and the United States. However, shifting governmental priorities on both sides could dramatically influence the future of this industry, with far-reaching economic and environmental consequences.
We sat down with James Kydd, an experienced energy sector executive and Vice President in Calgary, Alberta, who has monitored these shifts closely. With over two decades in oil and gas production facility construction, Kydd’s perspective offers valuable insights into how potential policy changes could shape North America’s energy landscape and impact crucial cross-border collaborations.
Virtually all of Canada’s crude oil exports go to the United States. Last year, 87 percent of Canada’s crude oil — roughly 3.3 million barrels per day — came from Alberta, according to the Canadian Energy Regulator. As the country’s largest oil producer, Alberta plays a pivotal role in the oil and gas trade and thus plays an essential role in the partnership between the two countries.
It also makes the province heavily reliant on U.S. policies – a balance Kydd is accustomed to managing.
“In my role, I’ve overseen major projects like the Trans Mountain Expansion and the Coastal GasLink Pipeline and have a firsthand understanding of the cross-border negotiations,” says Kydd. “The stakes are high for Alberta’s economy, especially if the U.S. decides to limit crude oil imports.”
The Biden administration’s emphasis on reducing greenhouse gas emissions and pivoting toward renewable energy impacted existing pipeline project timelines and continued infrastructure development. Simultaneously, in Canada, policies such as the federal carbon tax continue to play a role in the shape of the industry’s future. Although these measures push companies toward sustainability, they can also raise operational costs, which may affect the competitiveness of Canadian crude in the U.S. market.
“If the future American administration were to further prioritize domestic energy production over maintaining the current rates of imports, Canada’s energy industry could see its economic reliance on the U.S. tested,” warns Kydd.
With shifting priorities and regulations across the border, we can expect new issues to arise regarding the economic viability of oil and gas projects. When government policies supporting fossil fuel development are altered, it affects the investment risks for projects
“For Alberta, this new era brings a degree of unpredictability that we’ll have to get used to,” says Kydd. “We know the Trump administration wants to aggressively pursue drilling and providing domestic sources of energy. We’ll have to see if the demand for imports is affected.”
While shifts in policy can create uncertainty, they also usher in new opportunities for innovation. Companies willing to invest in new technologies or safety enhancements can position themselves as leaders in a more dynamic market. The industry’s future will likely balance fossil fuel demands with environmental responsibilities especially as North America works to maintain energy security in a global market marked by volatility.
“I think as we face the ongoing realities of the changing U.S. market, finding new strategies to diversify and innovate will be essential. This sector is an important pillar of both economic and energy security, and I don’t think that’s likely to change for either country anytime soon.”
