Western Standard - HANNAFORD： Trump’s energy revolution leaves Carney in the dust

00:00:00.000 Good evening Western Standard viewers and welcome to Hannaford, a weekly politics show

00:00:20.400 of the Western Standard. It is Thursday, May the 7th. The global warming revolution is dead

00:00:27.760 As Western economies raced to reduce carbon emissions to save the world, many lost sight

00:00:34.000 of the vital contribution fossil fuels make to economic resilience and national security and now

00:00:41.840 regional international security. With me today to talk about what this means for Canada

00:00:48.000 and the world is author and political economist, Brian Lee Crowley. Welcome, Brian.

00:00:54.000 it's always great to be here nigel thank you well thanks for coming on the show brian is founder of

00:00:58.880 ottawa's leading think tank the mcdonald-laurier institute and also of the washington-based center

00:01:04.800 for north american prosperity and security which gives him a unique viewpoint into what's going on

00:01:12.400 down south so it's good to have you back brian what we want to get at today is what the u.s

00:01:18.000 blockade of the Gulf of Hormuz means for Canada and for the rest of the world. It has turned a

00:01:24.400 well-supplied European market into one that is drawing down inventories at a rapid pace to meet

00:01:30.080 demand. Great Britain and Europe are paying 20% more for gasoline. We are paying more for gasoline

00:01:37.360 here in Canada, where we're sitting on a great pool of oil. And the only reason the Europeans 1.00

00:01:43.760 and the British can get oil, is it now the Americans are selling it to them? But now in

00:01:48.400 the past month, and I know you're going to love this, Canada has authorized a new oil pipeline

00:01:54.320 into the U.S. market. It is the Bridger line. It uses up a lot of KXL infrastructure. It'll take

00:02:01.920 half a million barrels a day. Presumably, this is to help Americans meet demand in Europe.

00:02:08.640 Does this make any sense to you, Brian?

00:02:10.560 well if you're thinking about it in terms of the great geopolitical chess board uh you know

00:02:19.440 how are the pieces moving russia iran the middle east uh china uh and the americans it actually

00:02:29.200 makes a lot of sense to me uh but i think many people have not you know their image of the world

00:02:35.500 is not quite caught up with how the chess pieces have been moved. And what I have in mind here is

00:02:40.900 that one of Donald Trump's major ambitions has been to end the dominance of the Middle East on

00:02:49.100 world oil prices and supply, to break up OPEC, and to shift the center of the world oil market

00:02:59.380 away from the Middle East towards the Americas. And I think that we are living through the

00:03:05.140 consequences of that strategy. And of course, it creates some short-term pain. The Strait of

00:03:13.220 Hormuz, which you mentioned, through which about 20% of the world's energy travels on its way to

00:03:20.780 either Europe or Asia. Part of Donald Trump's strategy, I think, was he forced Iran's hand

00:03:28.500 on the Strait of Hormuz. What he did was he said, you guys have been threatening for years that if

00:03:35.060 anything happened to you, you would close this trade of Hormuz. And everybody could manage that

00:03:40.080 risk. They knew it was a possibility, but perhaps not very likely. What Donald Trump did was he

00:03:45.180 forced them actually to do it. And one of the consequences of that, Nigel, is that as soon as

00:03:51.100 that vital choke point becomes used as leverage, it immediately begins to be discounted by everybody

00:03:59.020 because they start to look for ways to get around it. And now Saudi Arabia is sending

00:04:03.720 seven million barrels a day, roughly, of oil to the Red Sea so that they're not going through

00:04:08.660 the Persian Gulf. I think Oman or the UAE, I don't remember which now, has built a pipeline

00:04:15.040 to bypass the Strait of Hormuz, sending about two million barrels a day.

00:04:20.840 Brian, hold on. They just built a pipeline? How long was it? It takes 10 years to build a pipeline.

00:04:26.200 I mean, let me put it this way. They've expanded capacity to about two million barrels a day to

00:04:33.520 allow them to bypass the Strait of Hormuz. And, you know, all of this means that Iran's leverage 0.94

00:04:41.920 because of its proximity to the Strait of Hormuz is a declining asset. It's not going to be very

00:04:47.720 valuable to them for very much longer. One of the consequences, as you know, Donald Trump,

00:04:54.380 as soon as Iran closed the Strait of Hormuz, he started to post on true social pictures of,

00:05:00.860 very large crude carriers, the VLCCs, which were leaving the Middle East empty. And where were

00:05:08.560 they headed? They were heading down under Africa, up across the Atlantic towards what I still call 0.98

00:05:14.320 the Gulf of Mexico. Why are they headed to the Gulf of Mexico? Because Donald Trump has now

00:05:21.100 positioned America to be the place where people go looking for that barrel of oil they can no

00:05:29.480 longer find in the Middle East. And, you know, he makes a lot of the fact that America is now

00:05:36.160 exporting the equivalent of 10 million barrels of oil a day. I say the equivalent because they're

00:05:42.000 exporting, you know, five, six million barrels a day of crude, but they're exporting, you know,

00:05:47.820 four, five, six million barrels a day of processed petroleum products. So, you know,

00:05:55.620 the equivalent of about 10. They've gone up to as much as 13 million barrels a day.

00:06:02.020 So America is now the largest exporter of oil in the world. And he's put America at the center of

00:06:10.800 the world energy trade. And you've got the UAE, the United Arab Emirates, a major oil producer in

00:06:16.940 the Middle East saying, you know what, the world has changed so much. We're getting out of OPEC.

00:06:22.920 uh we don't like the organization petroleum exporting countries anymore controlling prices

00:06:29.240 controlling production we want to get as much value as we can out of our reserves before the

00:06:35.120 world stops using oil i personally don't think that's going to happen anytime soon but still

00:06:39.580 uh that's their strategy and this is all grist to donald trump's mill he has reordered the world

00:06:46.400 energy markets in a fundamental way in an amazingly short period of time it's an astonishing

00:06:51.700 accomplishment. Let me just take you back to where we came in. We've got this line going

00:06:58.040 south from Alberta, the old Keystone line. They're going to take it to Wyoming, half

00:07:05.720 a million barrels a day. I can see why if the Americans are selling all this oil to

00:07:12.240 everybody, they would be quite glad to just be bringing in another half a million barrels

00:07:16.400 from canada but mr carney has said that he wants to do big things have great projects in canada

00:07:24.800 wouldn't it make a great project to like why are we doing this why are we just building the line

00:07:30.000 eastwards and uh or or if quebec won't have it sending it up through churchill why aren't we

00:07:36.160 advancing that project selling it to europe ourselves such such interesting question well

00:07:42.880 first of all let's start with you know where is this uh oil going you've mentioned europe

00:07:49.840 absolutely europe is uh anxious to find new sources of oil but it's also asia don't forget

00:07:57.040 that uh you know japan taiwan uh korea a whole bunch of other uh countries that are friendly to

00:08:03.920 us plus china who is one of our great adversaries uh depend enormously on middle east oil and now

00:08:12.400 that's uh uh no longer so easy to get uh this is another one of trump's victories in his reordering

00:08:21.120 of the world oil markets you know that iran was selling a lot of uh uh you know off the books uh

00:08:29.360 under the radar or sanctions busting oil through a shadow fleet to china he's destroyed that trade

00:08:36.480 So we could talk about that too. But let's come back to Canada and our ability to export oil.

00:08:44.600 You know, Mark Carney says that our reliance on the United States has become a weakness,

00:08:50.940 not a strength. He wants to diversify our trade. The very easiest thing he could do

00:08:56.720 to diversify Canada's trade on a massive scale would be to build a pipeline to the West Coast

00:09:03.100 and send our energy resources to all those hungry Asian markets.

00:09:10.160 But of course, this is the same prime minister who in one breath says,

00:09:14.020 we want to diversify our trade, blah, blah, blah.

00:09:17.240 But in the next breath, he says, oh, and by the way,

00:09:19.200 if we're going to build a pipeline to the West Coast,

00:09:21.660 I need to get the permission of both the government of British Columbia

00:09:24.700 and all the First Nations along the route.

00:09:26.720 this is something that no federal government has ever agreed to before it's always been accepted

00:09:34.300 that it was federal jurisdiction to build pipelines so he's thrown up all kinds of

00:09:38.420 barriers himself to the single easiest way for Canada to diversify its trade so instead what's

00:09:45.740 going to happen because I think those conditions are virtually impossible to fulfill and what's

00:09:52.540 going to happen then is if we're going to create egress for Alberta's energy resources ironically

00:09:58.800 it's going to be by taking them south we're going to get them to tide water it's just going to be on

00:10:04.420 the Gulf of Mexico and you know we're going to become even more dependent on the United States

00:10:11.420 and we are going to contribute to Donald Trump's ambition to turn North America or the Americas

00:10:18.600 more generally because we should include venezuela and even argentina which has huge

00:10:22.920 oil resources they haven't developed yet turning the americas into the the key to world energy

00:10:29.400 markets that the middle east has been for the last uh you know 50 60 70 years uh and i i

00:10:38.840 the interesting thing because let's think for a minute about what trump's ambition is and

00:10:45.160 America's energy production, which is needed to back up this shift to make America the center

00:10:52.200 of world energy markets. It used to be that America was a major consumer of oil. They were

00:11:05.000 not an exporter. In fact, they used to have an export ban because they needed to keep all the

00:11:10.840 oil that they could within the United States. Now, because of the fracking revolution, America

00:11:16.060 has vastly increased its production capacity, but they still import almost 8 million barrels

00:11:24.860 of oil a day. So, you know, yes, they export 10, but they import eight. So their net contribution

00:11:31.640 to world consumption outside the United States is only 2 million barrels. That's not huge.

00:11:37.080 so what given how the iran conflict and so on has tightened up oil markets raised prices and so on

00:11:44.800 america is is rather anxious right now to find other sources of oil based in the americas that

00:11:51.180 they can use to fill up these very large crude carriers that are coming from the middle east

00:11:55.920 empty because they can't get the the the the resource in the in the persian gulf and what

00:12:01.940 would be the easiest way to do that would be to increase Canada's oil exports to the United States

00:12:07.700 because if you look at the production curve of fracked oil in the United States it actually

00:12:14.480 leveled off in the last quarter of 2025 now don't get me wrong I'm not saying we've hit peak oil or

00:12:21.960 anything like that I think that's rubbish I would never discount America's ability to innovate and

00:12:27.620 you know, apply artificial intelligence to fracking to increase production. But the fact

00:12:34.680 of the matter is that, you know, fracking produces huge splashes of oil at the beginning,

00:12:40.540 and then it quite quickly declines. Whereas, as you know, oil sands production is fantastically

00:12:48.000 stable. You know, once you start production, you just have this, it just motors along at a

00:12:54.580 consistent level off into an indefinite future. And this is a tremendous supplement to America's

00:13:01.020 own energy supply in this effort to achieve American dominance in world oil markets.

00:13:08.880 So I know that Donald Trump likes to say Canada has nothing that America needs,

00:13:14.220 but he's wrong about that. You know, exactly the strengths of the Canadian oil sands are the

00:13:21.300 supplement that his energy ambitions need because the fracking revolution in the United States is

00:13:26.860 not enough by itself. Well, the implications of what you have just said, Brian, are that this is

00:13:32.580 huge news for Alberta. Because what you said was that pipelines to the west coast,

00:13:42.720 not that likely because of the conditions that Mr. Carney has chosen to accept for their approval,

00:13:49.240 That is, indigenous approval, and going in the other direction, they want the approval of Quebec to put a pipeline across it.

00:14:01.880 That doesn't seem to be happening. 0.92

00:14:05.140 They don't care.

00:14:06.700 So oil can only actually make it out of Canada through Alberta, which takes us in so many different directions.

00:14:18.860 But you have really just given everybody who's ever thought about investing in Alberta time to think about it and to make a decision.

00:14:30.160 And I think that's not Shell just committed to a $20 billion investment in Alberta.

00:14:37.080 Does this factor into your case?

00:14:38.860 Well, it's very interesting that you raise this, Nigel, because, you see, the industry in Alberta, particularly in the oil sands, has been coasting along for a decade and more on investment that was made basically before 2015.

00:14:58.840 uh there really has not been any new productive capacity uh a greenfield productive capacity

00:15:06.780 created there's been you know incremental increases in uh the capacity of existing

00:15:12.740 plants to produce more oil but basically for over a decade we've not added to our productive capacity

00:15:20.220 in the in the oil sand uh but during all that time we've been applying you know typical alberta

00:15:27.980 ingenuity and and driving down the cost of producing a barrel of oil out of the oil sands

00:15:33.900 from this productive capacity that we created decades ago that it means that you know the

00:15:40.540 the we've been driving down the production costs oil prices have to be quite high right now i mean

00:15:46.300 the existing productive capacity in alberta is is really fantastically profitable uh and so

00:15:54.220 it's attracting uh i i think international players to want to get a a piece of that action

00:16:01.260 but it's very important to understand that what we really need now is uh the ability to get

00:16:08.700 greenfield sites going you know to do the kind of upfront investment that would create

00:16:15.100 larger productive capacity over time and that i don't see happening yet because you know much

00:16:21.100 as mark carney says he uh he wants to see this happen you know we've got the egress problem that

00:16:27.020 we talked about east and west we've got uh you know the carbon capture and storage uh uh obstacle

00:16:33.420 that he attaches to uh to new egress and new productive capacity i mean he's he's he talks a

00:16:40.700 good game but my view is that he's not at all creating the conditions in which it's worthwhile

00:16:46.700 to invest in new productive capacity in Alberta. So the oil majors are attracted to the profitability

00:16:54.620 of what already exists, but what we in Canada really need is to increase that productive

00:16:59.700 capacity. And we're not there yet, as far as I can see. Do you think Mr. Carney understands

00:17:06.340 what Donald Trump is doing the way that you understand it? Is there any evidence?

00:17:10.620 well you know my reading of mark carney is that he is he is perfectly happy to take short-term

00:17:24.760 political advantage of say canadian's unhappiness with donald trump and you know look

00:17:30.660 i can't disagree that donald trump has said many offensive things and he's insulted canadians and

00:17:36.960 I get that but you know Mark Carney has taken that and turned it into an entire political brand

00:17:44.400 and he has invested not just the government of Canada but the the future interests of Canada in

00:17:49.840 an anti-American extravaganza which I think really harms our national interests in the long run and

00:17:58.160 I think he understands perfectly well what he's doing and he's willing to he's willing to take

00:18:03.920 short-term political advantage over promoting the long-term interests of canada i actually think

00:18:09.920 this is quite a shameful position to occupy well i think you find lots of support for that point

00:18:16.800 of view here in alberta where many people do not like the messaging that's coming out of eastern

00:18:23.840 canada central canada and there is as you probably know quite a strong independence movement in in

00:18:33.040 alberta that will come to a head in october but meanwhile it's no surprise to us that mr

00:18:40.400 carney may want to take a short-term advantage to his political benefit but why does this sell so

00:18:46.080 well in central canada well you know there's an historian who once said that uh a canadian is the

00:18:55.760 perfect anti-american anti-american as imagined in the mind of god you know there there is an

00:19:01.840 anti-american streak in canada there always has been uh it's it's kind of inevitable sharing the

00:19:09.200 continent with the united states but you know we've always been able to sublimate or submerge this

00:19:18.480 kind of anti-american reflex uh because we understand that our our fates are inevitably

00:19:25.920 tied together our two countries in in in north america and i i'm i'm sorry that uh donald trump

00:19:34.160 has you know uh used his traditional negotiating strategy which is to so outrage his negotiating

00:19:43.280 partners that they lose the ability to focus on their own interests and i think canadians fall

00:19:47.680 for it every time and you know what he's done is said outrageous things and canadians say how

00:19:55.360 dare he say that to us? And Mark Carney has said, yes, exactly. And if you support me politically,

00:20:00.680 I will find us alternatives to the United States. The fact of the matter is, though, as Margaret

00:20:05.840 Thatcher used to say, there is no alternative. The idea that there is some substitute for our

00:20:13.120 relationship with the United States is, in my estimation, completely fanciful. Can we sell more

00:20:20.600 to other people of course we can should we do so of course we should but that's not the same as

00:20:28.040 saying that there is some alternative to our relationship with the united states because

00:20:32.940 there isn't i i just very quickly because i know we don't have a lot of time but i i'll just point

00:20:38.280 out that you know he talks sometimes about we should join the european union we're the most

00:20:42.380 european non-european country blah blah blah blah blah we negotiated a free trade agreement

00:20:48.420 with europe uh came into effect in 2015 so it's been in effect for 10 years so we already have

00:20:55.620 free trade with europe in 2015 we sent 10 of our exports to the european union now 10 years later

00:21:03.700 after 10 years of free trade with europe what share of our exports are we sending to europe

00:21:08.180 10 in other words it hasn't the existence of a free trade agreement with europe hasn't changed

00:21:14.420 one iota the extent to which uh we are reliant on europe as opposed to america so 0.66

00:21:24.580 what is this alternative is it going to be china the people who kidnap our citizens who weaponize 0.66

00:21:31.060 trade relationships you know the they japan became reliant on trade with china the first 0.87

00:21:36.980 thing china did was to institute a rare earth export ban which has a a dagger aimed at the

00:21:42.980 the industrial heart of Japan. I mean, talk about out of the frying pan and into the fire. If I'm

00:21:49.560 choosing between a country that engages in slave labor and weaponization of trade and 0.84

00:21:55.420 opens police stations on my soil to intimidate Chinese-Canadian, as opposed to the relationship 0.99

00:22:05.500 that we have with the United States, I will choose that relationship with the United States 0.99

00:22:09.380 any day of the week.

00:22:12.340 And I just don't get this nonsense

00:22:16.560 that Mark Carney is perpetrating on us

00:22:22.680 that there is an alternative to the United States

00:22:25.300 because he's just wrong about that.

00:22:27.620 Ryan, we've got to go to the last question here.

00:22:30.440 When you began speaking about this,

00:22:33.080 you said that Mr. Trump had a plan

00:22:35.940 to upset the oil markets worldwide, to make America the center of it,

00:22:42.120 if that is the case.

00:22:45.340 Two things.

00:22:46.500 One, has he got there or is he still working on it?

00:22:51.280 And second, what does that mean for people in Canada?

00:22:56.880 Well, so I would say he's most of the way there.

00:23:03.180 This is a long-term job.

00:23:05.940 uh um uh you know the the conflict with iran has driven a lot of short-term traffic away from the

00:23:13.860 middle east uh uh we're not quite there yet in terms of the america's production productive

00:23:21.940 capacity in oil and gas but we're we're headed there and the investment is happening and i i

00:23:29.380 think he will win his bet and america will become the dominant uh oil and gas power in the world

00:23:36.660 america will set the marginal price of a barrel of oil not the middle east and this will be a

00:23:42.980 radical change to the world we've known because uh you know america doesn't have enough in my

00:23:50.260 view productive capacity to play that role alone it really is going to be an america's strategy

00:23:56.100 not America alone, and Canada sitting on the third, at least the third largest reserves of

00:24:04.280 oil in the world with, you know, a great environmental record and egress from Alberta

00:24:10.940 and Saskatchewan south to an America that wants those energy resources, we are extremely well

00:24:18.880 position and i think um you know if we play our cards right i i think this could greatly

00:24:26.480 redound to the benefit of uh not only the oil patch and the resource-rich provinces

00:24:32.160 of albert and saskatchewan but the country as a whole well thanks to the u.s navy then and

00:24:39.680 thanks to president trump anyway brian it's been great to have you on the show again thank you so

00:24:45.280 much for coming. And for the Western Standard, I'm Nigel Hannaford.

Western Standard - May 10, 2026

HANNAFORD： Trump’s energy revolution leaves Carney in the dust

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