Western Standard - January 14, 2026


HANNAFORD： Trump's bold Venezuela action a wake-up call for Canada


Episode Stats

Length

26 minutes

Words per Minute

142.91367

Word Count

3,732

Sentence Count

240

Misogynist Sentences

1

Hate Speech Sentences

3


Summary


Transcript

00:00:00.000 Good evening Western Standard viewers and welcome to Hannaford, a weekly politics show of the
00:00:22.320 Western Standard. It is Thursday, January the 8th. President Trump's actions in Venezuela have
00:00:29.220 caused a huge reaction around the world, and especially here in Alberta, where there are
00:00:33.840 fears that a revitalized Venezuelan oil industry will displace Alberta exports to the U.S.
00:00:41.060 Meanwhile, just before we sat down to record this interview, we learned of amazing developments
00:00:49.100 with the U.S. intercepting a Russian-flagged tanker in the Atlantic waters north of Great Britain
00:00:58.520 with a Russian nuclear submarine looking on. Of course, we can assume that there's an American
00:01:03.780 submarine watching all this as well, but the tensions that are building up around President
00:01:11.080 Trump's actions of the last weekend seem to have amazing consequences, and we really don't know
00:01:17.920 where it's all going to end. One thing we can be sure of is that the case for an additional export
00:01:24.580 route for Alberta oil, always impressive, seems more urgent yet. But could we be worrying too much?
00:01:32.580 With me today is Dr. Ron Wallace, who served on the old National Energy Board that the Liberals got
00:01:38.260 rid of years ago. He's a professional ecologist with a long career in energy regulation. In fact,
00:01:44.820 he put in a little time in Venezuela. We'll ask him about that in a minute. But Dr. Wallace,
00:01:50.500 welcome back to the show. Thank you very much, Nigel. It's great to be here.
00:01:55.380 Well, it's nice to see you again. Ron, I see Alberta Energies took a hit over the weekend. In fact,
00:02:01.540 they were substantially down this morning, so some people think there's a problem. What do you think?
00:02:06.340 Are we in trouble here? Well, I don't think anybody really knows right now. There's so much
00:02:12.260 happening so quickly. One writer for the Western Standard has come out and said that what we're
00:02:19.620 going through is a $17 trillion reset, and that's a very accurate summation of what's happening in
00:02:27.140 the world. Well, when there's a reset, there's something that was and something that will be after
00:02:33.940 it's reset. Well, exactly. What is the reset? Well, there's a great deal of media attention,
00:02:43.380 and there's an awful lot of information being thrown about, some of which is actually accurate.
00:02:49.780 But let's just go back to the beginning. That would be the Western Standard.
00:02:55.220 Presumably. But let's just go back to basics here. Canada exports about 4 million barrels
00:03:03.140 to the US every day. 70% of that goes to Midwest refineries. The rest of it goes to the American
00:03:12.900 US Gulf Coast refineries for heavy oil. And that was the market traditionally that was developed
00:03:19.380 and built around Venezuelan oil. And of course, about 880,000 barrels a day goes through Trans Mountain,
00:03:29.220 meaning it's about 85% full. So the bulk of the Canadian exports of our oil is going to the United
00:03:39.300 States. So anything that's going to change that market is going to have a knock-on effect in Canada.
00:03:44.740 There's just no question about it. The question is, what is the knock-on effect? What do we know? Now,
00:03:53.300 things are developing very, very quickly here. This morning, there was an announcement that
00:04:00.340 between 30 and 50 million barrels of Venezuelan oil will be transported to the United States and
00:04:07.780 refined at those Gulf Coast refineries. Now, what effect does that have on the Canadian export thing?
00:04:15.380 That's a market function. I can't tell you what that is. And in fact, there are people out there
00:04:20.900 like Richard Mason at the School of Public Policy, who's been giving out very, very accurate numbers.
00:04:28.260 It would be very useful to hear what he has to say about that dynamic that's happening.
00:04:32.100 Well, let me just stop you there for a second. If there are 50 million barrels of oil going into
00:04:39.060 the Gulf Coast refineries coming from Venezuela, do they have spare capacity? Or is that going to
00:04:47.140 displace Alberta oil in the very near future? Well, I don't know. I don't know. But 50 million
00:04:54.340 barrels is a lot of oil. What do you hear about it? Is it 4 million a day? It's about that number.
00:05:04.740 Well, that's the number that's going to the United States. That's only 12 days supply of them.
00:05:09.060 Well, that's right. So this is a very dynamic market. So let's talk about that Gulf Coast
00:05:15.460 refinery system. What's called the USGC, the United States Gulf Coast refinery complex, is probably one
00:05:25.940 of the largest, most well-developed refinery systems in the world. It's required billions
00:05:32.660 of dollars of investment for coking desulfurization and hydrocrackers. And it was built specifically
00:05:39.220 around Venezuelan heavy sulfur crude. That refining complex imports about 40 million barrels of heavy
00:05:51.140 crude a month. And what happened is that as Venezuelan production collapsed from 3 million down
00:05:59.380 to about a million barrels a day, which was then hit with American sanctions,
00:06:06.340 that stream of oil from Venezuela caused the USG refiners to scramble to replace that oil.
00:06:16.340 And they replaced it with Alberta crude, which was coming in by pipeline and was very quickly
00:06:22.100 adapted to their system. It was perfect for their needs, as a matter of fact. So here you have
00:06:28.020 Canadian Cold Lake, the Mexican, Mayan, Brazilian heavy grades were being offered,
00:06:34.020 but Canadians supplied 13.6 million barrels per month, which represented 34% of the largest single
00:06:44.740 crude to those US refiners. And as a result of that, Canadian Cold Lake and WCUS differentials
00:06:51.780 tightened with the WTI discount narrowing from around $13 a barrel to down to $9 a barrel. So
00:07:00.100 the sanctions that the Americans put in place had a tremendous positive effect on Canadian oil
00:07:09.460 production and transport to the United States. 34% of that refinery.
00:07:16.980 So that's what's at risk here for us.
00:07:18.900 That's what's at risk. That's the number that we don't actually know.
00:07:22.500 We don't know. Well, we don't know because the market will function here.
00:07:26.020 The refinery…
00:07:26.740 Do we know what we don't know?
00:07:27.940 No, I don't think we do.
00:07:33.300 When you look at the total situation and Mr. Trump's actions, you could say this is about drugs.
00:07:40.500 He's certainly been very emphatic about blowing drug boats out of the water. I mean, you can't
00:07:45.380 say he isn't taking that seriously. It certainly could be for geopolitical aims to make life difficult
00:07:51.780 for China. He's had a year of doing that in his second term. This would fit that profile.
00:07:59.220 Well, or it could be about the oil, you know.
00:08:01.300 Well, I think it's about all of it, right. But there's two very significant things hanging over
00:08:10.260 this. It's so complicated. There's a geopolitical aspect of this. There's a political, as you say,
00:08:19.140 point out to it. And there's also a Canadian economic level. And right now, Canadian economic
00:08:25.780 level is kind of the bottom of the triangle. Let's talk about that for a minute.
00:08:29.460 Yeah. There was once a proposal to build a pipeline to the coast from…
00:08:36.580 Yeah.
00:08:37.380 Ah, yes. You know what I'm going to say. Okay, we're talking about the Northern Gateway.
00:08:41.460 Yeah.
00:08:41.860 Am I correct in saying that that was fully permitted, ready to move the bulldozers in?
00:08:47.540 Yeah.
00:08:48.340 And it was one of the first things that the new liberal government headed by Justin Trudeau
00:08:54.980 did was to cancel that project.
00:08:57.300 Yeah.
00:08:57.780 Where would we be today if we had built the Northern Gateway?
00:09:01.940 That's a really perceptive question. And it's one that has not been, I think, as thoroughly examined
00:09:10.420 as it should in terms of what that cancellation has cost Canada. At one point, I remember one writer at the
00:09:17.300 time that happened, and I was still at the National Energy Board at that point. The National Energy Board had fully
00:09:28.260 accredited and approved that pipeline. It required a certificate from the Federal Cabinet. They denied it,
00:09:35.460 and they shut it down. The cost of that immediately to the proponent, which was Enbridge, was estimated in excess
00:09:43.540 of $500 million, fully approved, fully licensed.
00:09:47.700 So the real slam on it. Well, there was a writer at that time who said that that was the worst economic
00:09:57.060 decision that was made in Canada's history.
00:10:00.340 And then, of course, time has moved on. But now, if you look back at that development and you realize
00:10:07.620 that, well, Transmountain went ahead, the initial estimates is that the Transmountain oil would be
00:10:16.260 transported largely to California to the US. The shocking development is that much, much more than what
00:10:25.540 was predicted. I think numbers are up to as much as 30% to 50%. It's not flowing to Asia. And that shows you
00:10:34.740 what could have been with Gateway. Now, if you look, and that's the brilliance of the question that you've
00:10:44.340 asked, if you look now with the presence of hindsight to say, where would Canada be if we had allowed
00:10:53.140 Gateway to proceed, and it would be up and running or very close to up and running, suddenly that oil
00:11:01.460 that is at risk to China, right now, China was importing about 400,000 barrels of Venezuelan oil
00:11:08.020 per day. That's gone. Now, not only is there a geopolitical aspect to this, China has put
00:11:15.460 billions of dollars into Venezuela to enhance the oil trade and ensure that that 400,000 barrels a
00:11:22.740 day would flow to them. That's gone. That would now be made up by Gateway. So this is an enormous
00:11:31.060 blow to Canada because we have nothing there. And in fact, we're at least five, eight, 10 years away now
00:11:40.580 from replicating that. We can enhance the flow maybe by 20, 30% through the Trans Mountain pipeline.
00:11:56.580 That will help offset that flow. But the cumulative disastrous impact on the Canadian balance of trade
00:12:09.300 in our economy from that single decision that was made by the Trudeau government is only just now
00:12:16.740 becoming to be enumerated. You can now calculate the damage that that's caused. Now, that doesn't talk
00:12:24.340 about the geopolitical damage. But when you use that as your starting point, and you fast forward to
00:12:30.900 today, you see a federal government that shut that down. Now you see a federal government that's saying
00:12:36.020 they're going to expedite it and effectively rebuild it. But they're going to rebuild it and accelerate it
00:12:43.300 with decarbonized oil. Well, here the federal government-
00:12:47.060 Just in case people have forgotten what decarbonized oil is, could we just remind us?
00:12:52.100 Yeah. Well, the famous, the grand bargain that Premier Smith has enunciated is based on an MOU,
00:13:02.260 a memorandum of understanding that says, yes, we will look at building a pipeline to the
00:13:11.860 British Columbia Northwest coast over the objections of indigenous and certain premiers.
00:13:19.700 We will accelerate that and take it to some sort of a port, which is yet undefined with an application
00:13:29.860 that is being formulated by Alberta, which will be submitted to the major projects office to expedite
00:13:37.140 this project. All of these wrapped around that pipeline is a requirement that the oil be decarbonized
00:13:48.020 with a $16 billion pathways decarbonization facility.
00:13:53.220 Which is pumping CO2 underground.
00:13:55.140 Pumping CO2, taking it out of that production stream, not a refining stream, a production
00:14:00.100 stream and putting it underground. It's not an EOR, an enhanced oil recovery. It's a simple,
00:14:07.300 uh, it's a cost off the top. You were just taking a carbon CO2 and putting it underground.
00:14:12.580 Well, these are tremendous penalties that have been put on top of it. So look at the Canadian history of
00:14:18.020 policy. You know, I've talked to many people and they say, you know, energy policy is boring.
00:14:22.740 Well, here's energy policy. It's not so boring anymore because we're in the middle of a $17 trillion reset.
00:14:30.820 The energy policy that dynamited a gateway, which the federal cabinet said, no, we're not going to
00:14:40.580 build this. Thank goodness they went with Trans Mountain or we would have no access to that right
00:14:46.900 now. That, that, uh, the card started falling with, with that decision. So now we have a situation where
00:14:55.060 we have a federal government that has turned around 180 degrees saying they're now going to expedite this,
00:15:01.460 but a tremendous penalties that the front end. So those penalties make me doubt their sincerity.
00:15:10.420 Well, do you really think that this is going to be the shock that Mr. Carney needs?
00:15:14.980 Well, the, the, the difficult, well, they, they've said that the federal government on top of all this,
00:15:21.140 this, uh, this, this 180 degree reversal, where now we're suddenly we're in full panic mode to get
00:15:28.340 alternative access outside of the United States. They've said there's two major conditions. One is you
00:15:34.020 have to have an indigenous partnership. Um, and the second is, is that you have to be able to decarbonize and,
00:15:40.820 uh, and do that oil. Well, uh, uh, the question is right now is, is that will the private sector come
00:15:49.300 to the table with those kinds of preconditions on it? Is there a market? Is there a political, uh,
00:15:57.220 capacity in Canada to actually bring this about? Because remember you're, you're talking two years
00:16:03.140 before you even get to put pipe in the ground, assuming you've got an approval and not, you know,
00:16:08.660 bearing on that matter of is Mr. Carney sincere about this, I gather there's an oil glut at the
00:16:14.980 moment. Well, um, this to, to expedite the, the, the, the, the new pipeline so that, uh, we can offer our
00:16:25.540 higher price oil into a lot of low, lower priced oil. It doesn't sound like, doesn't give me much
00:16:32.340 confidence as well, you see, although it was unintended. Those are the questions that any
00:16:37.860 private sector investor is going to be asking is that if you, if you have a $16 billion penalty at
00:16:44.340 the front end, before you can build a 20 to $30 billion, highly controversial pipeline to get to
00:16:51.540 a market in five to 10 years, uh, to offset what may be happening in the Gulf. And we're not sure
00:16:59.940 what that is because that's going to be driven by market forces. Uh, right now the refineries will
00:17:06.020 take the best priced oil that they can get, uh, whether it's Canadian or whether it's Mexican or
00:17:12.340 Venezuelan, uh, and they will refine it and they will put it out into the U S market. What, what has
00:17:18.100 happened here is, is that this is a phenomenal market intervention by the Trump administration.
00:17:24.900 They are controlling the oil. Well, what has happened in Venezuela is, is that when
00:17:30.980 the sanctions came in the, and the Americans blockaded effectively, uh, the oil, uh, tankers,
00:17:39.060 what happened is, is that their heavy oil production from their fields filled up all of their storage
00:17:45.460 capacity. If you fill up your storage capacity, you've got to start shutting down heavy oil wells.
00:17:51.460 When you shut those down, that's a very serious thing because it's very hard to get those things
00:17:56.180 up and running again. Now, what Trump has done is he said, okay, we'll take the surplus off your
00:18:01.620 hands for free. We will sell it to the world market. We will refine it with American refineries
00:18:06.980 and American tankers and American transport systems. And then we will sell it to the market.
00:18:12.500 Then we will put the money in American banks and then we'll dispense it to whoever we choose.
00:18:17.940 Presumably the Venezuelan people. Well, that solved the problem for the Venezuelans because now they
00:18:24.100 don't have to shut down, uh, their producing fields and their storage capacity will in fact be bled down
00:18:31.300 so they can start to re, uh, refill it. Uh, so at least they're keeping their system running, but the Americans are,
00:18:39.780 uh, this is a market intervention, the likes of which I don't think, uh, is in, in history.
00:18:48.580 Right. So the reset that we're talking about is from this situation. Trump is doing the reset.
00:18:55.940 What does it look like in six months time? Well, that's another really, really good question. I don't
00:19:02.100 think anybody knows, uh, right now, but, but I can tell you that what this is, is a gigantic wake up call
00:19:11.300 for the, I don't know. I don't know the, I don't want to use an adjective here. That's, but the Canadian
00:19:19.460 energy policy, the government of Canada, Canadian energy policy is, has led us to a gigantic wake up call
00:19:28.500 where now we are, uh, what must we do? Well, it's, it's very simple. We've got to diversify our markets
00:19:37.380 and, uh, we've got to, and we've got to maintain our competitiveness. And, you know, the prime minister
00:19:43.460 in Paris say that, you know, can he, he's saying the right words, we've got to find, we've got to
00:19:48.660 diversify markets. We've got to make oil Canadian oil competitive. Well, how do you make Canadian oil
00:19:55.060 competitive when you shut down the pipelines, you're forcing decarbonization, uh, which by the way,
00:20:02.020 it's not Canadian oil, which will be the only oil producers in the world that are forced to
00:20:08.980 decarbonize their oil while we bring, uh, uh, international sourced, uh, oils into Eastern Canada
00:20:18.580 for refinery refining, which is a big source of CO2. There's much more CO2 generated when you're
00:20:25.940 refining than when you're producing. But with this conflict that we've got running where now
00:20:32.260 Venezuelan oil effectively can come into Montreal and New Brunswick, but Canadian oil has to be
00:20:38.980 decarbonized. And it's not just Canadian oil that is the only oil in the world that's going to have to
00:20:45.380 be decarbonized. It's Alberta oil. Yes. More specifically. Yes. Well, how do you maintain
00:20:51.940 Canadian market access and competitiveness when you have burdened it with the lack of pipeline
00:21:00.340 approvals? You've opened up the Canadian market to international sources of supply, and then you have
00:21:06.740 to decarbonize it. Well, you've been very vocal on this for the last few months, Ron, and I actually
00:21:12.820 think that your opinions are starting to make a difference where it needs to be heard. Certainly
00:21:19.140 they know who you are and what your point of view is. Um, the, I guess the, the question remains a
00:21:28.900 very simple one. We can't, you know, we can't undo what Mr. Trudeau did, but we can certainly demand.
00:21:36.980 Well, Mr. Carney. Yeah. We'll see if Mr. Carney is capable of unwinding it with the conditions.
00:21:45.300 Uh, because remember at the same time, his net zero philosophy of this government is moving ahead. They
00:21:51.460 have, uh, uh, significant legislation in place, which, uh, is aimed towards this net zero philosophy.
00:21:59.860 And there's more legislation coming forward, um, from Senator Galvez, which will set out restrictions
00:22:06.180 to the financial industry to invest in the hydrocarbon. So you've got this incredibly complex
00:22:13.940 series of, well, one could say they're contradictory policies. How do you make Canadian oil competitive
00:22:20.820 and accelerate its market access and diversify our markets with this legislative regulatory burden that's
00:22:27.700 been imposed upon it? Now, the premier of Alberta has, has talked about this at some length where she is,
00:22:36.580 she's, she's signed the, this agreement, this, uh, grand bargain with this MOU. But at the same time,
00:22:43.620 she's saying, you know, we have to be rational and we cannot continue down the road of economic
00:22:50.580 self-destruction. So this is a very complex policy environment that we've got in Canada.
00:22:56.420 Anybody else going to come back to haunt her? Well, she's got an, uh, an election in 2027.
00:23:03.140 Well, I don't know. I don't think there'll be a pipeline.
00:23:06.580 Well, we'll, we'll, the question is who in the private sector is going to step up and enter this
00:23:14.580 competitive environment? Yeah. So Trump has actually another question, Ron, that we're almost out of
00:23:19.940 town. I do want you to respond to this. As we speak, there is a naval interception taking place
00:23:28.020 in the, in the Atlantic, an American Coast Guard vessel, I believe, which sounds less militant,
00:23:35.140 I guess, than, uh, than the Navy. But, uh, U.S. Coast Guard, uh, vessel is intercepting a Russian flag
00:23:42.340 tanker a couple of thousand miles from the American coast. Um, it takes me back to our high school
00:23:49.540 studies about the War of Jenkins Ear and things like that, you know. Well, that's a, do you, do you,
00:23:55.140 in your sort of black moments, fear that this is all going to get so out of hand that people are going
00:24:01.220 to start shooting at each other? Well, that's a geopolitical question and it's a, it's, it's very
00:24:06.340 timely. I don't know. We'll, we'll see. But, uh, but you know, there is an upside to this and I don't
00:24:11.860 want to, uh, I, I don't mean the upside. Yeah. Well, the upside is, is that this regime in Venezuela
00:24:18.180 drove almost 8 million Venezuelans out of the country. And those 8 million Venezuelans were top
00:24:26.340 level, uh, included top level, uh, uh, petroleum engineers, uh, marketers, and so on. The, the upside
00:24:35.700 to that is many of those very, very competent people that I worked with in Penn, with Pedro Vesa
00:24:41.620 in Venezuela back in the eighties were very, very capable people. And they came to Canada
00:24:46.900 and they're working in the oil sense and they, and they are being, uh, they are speaking out, uh, uh,
00:24:53.300 more and more people are seeking them out. Very, very, very capable. What are they saying?
00:24:58.340 Well, they're saying it's going to take a long time to turn this around. Now, the fact that Trump
00:25:04.660 has used and grabbed, uh, that, uh, oil that was in storage and is bringing that to market very quickly,
00:25:12.100 that's a market blip, whether or not it's significant or not. But the point is, is that it is
00:25:18.100 assuming that the geopolitical situation and the internal political situation in Venezuela
00:25:25.300 can be stabilized. It's the least amount of time for a major return to Venezuela is three years,
00:25:31.940 maybe as much as five to 10. Okay. So there's hope. Dr. Wallace, thank you for coming in and, uh,
00:25:38.740 explain, laying all that out for us. And obviously at the Western Standard, we are going to be
00:25:45.300 staying right on top of this story as it develops. The implications for Alberta are huge, but so is it
00:25:52.100 for the rest of the world. For the Western Standard, I'm Nigel Hannaford.