Western Standard - January 10, 2026


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


Episode Stats

Length

25 minutes

Words per Minute

138.0958

Word Count

3,584

Sentence Count

220

Misogynist Sentences

1

Hate Speech Sentences

3


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

There are fears that a revitalized Venezuelan oil industry will displace Alberta exports to the U.S. Meanwhile, just before we sat down to record this interview, we learned of amazing developments with the US intercepting a Russian-flagged tanker in the Atlantic Ocean with a nuclear submarine looking on.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 Good evening, Western Standard viewers, and welcome to Hannaford, a weekly politics show
00:00:21.960 of the Western Standard. It is Thursday, January the 8th. President Trump's actions in Venezuela
00:00:28.780 have caused a huge reaction around the world, and especially here in Alberta, where there are fears
00:00:34.320 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
00:00:49.080 with the U.S. intercepting a Russian-flagged tanker in the Atlantic waters north of Great Britain
00:00:58.500 with a Russian nuclear submarine looking on.
00:01:01.900 Of course, we can assume that there's an American submarine
00:01:04.280 watching all this as well,
00:01:06.200 but the tensions that are building up
00:01:09.760 around President Trump's actions of the last weekend
00:01:13.240 seem to have amazing consequences,
00:01:15.800 and we really don't know where it's all going to end.
00:01:20.140 One thing we can be sure of is that the case
00:01:22.660 for an additional export route for Alberta oil,
00:01:26.420 always impressive, seems more urgent yet.
00:01:30.840 But could we be worrying too much?
00:01:32.760 With me today is Dr. Ron Wallace,
00:01:35.280 who served on the old National Energy Board
00:01:37.360 that the Liberals got rid of years ago.
00:01:39.760 He's a professional ecologist
00:01:41.280 with a long career in energy regulation.
00:01:44.500 In fact, he put in a little time in Venezuela.
00:01:47.040 We'll ask him about that in a minute.
00:01:49.140 But Dr. Wallace, welcome back to the show.
00:01:52.980 Thank you very much, Nigel.
00:01:54.420 It's great to be here.
00:01:55.200 Well, it's nice to see you again.
00:01:57.040 Ron, I see Alberta Energies took a hit over the weekend.
00:02:01.160 In fact, they were substantially down this morning.
00:02:03.920 So some people think there's a problem.
00:02:05.920 What do you think?
00:02:06.440 Are we in trouble here?
00:02:08.020 Well, I don't think anybody really knows right now.
00:02:11.720 There's so much happening so quickly.
00:02:14.580 One writer for the Western Standard has come out and said that what we're going through
00:02:20.180 is a $17 trillion reset.
00:02:22.440 And that's a very accurate summation of what's happening on the world.
00:02:28.720 Well, when there's a reset, there's something that was and something that will be after it's reset.
00:02:34.920 Yeah.
00:02:35.280 Well, exactly.
00:02:36.420 What is the reset?
00:02:37.980 Well, you know, there's a great deal of media attention, and there's an awful lot of information being thrown about, some of which is actually accurate.
00:02:49.500 But let's just go back to the beginning.
00:02:52.300 That would be the Western standard, presumably.
00:02:56.480 But let's just go back to basics here.
00:02:59.900 Canada exports about 4 million barrels to the U.S. every day.
00:03:05.320 70% of that goes to Midwest refineries.
00:03:08.660 The rest of it goes to the American U.S. Gulf Coast refineries for heavy oil.
00:03:15.680 And that was the market traditionally that was developed.
00:03:19.500 and built around Venezuelan oil.
00:03:22.220 And of course, about 880,000 barrels a day
00:03:27.100 goes through Trans Mountain,
00:03:29.260 meaning it's about 85% full.
00:03:32.620 So the bulk of the Canadian exports of our oil
00:03:38.300 is going to the United States.
00:03:39.700 So anything that's gonna change that market
00:03:42.780 is gonna have a knock-on effect in Canada.
00:03:44.900 There's just no question about it.
00:03:47.660 The question is, what is the knock-on effect?
00:03:50.700 What do we know?
00:03:51.580 Now, things are developing very, very quickly here.
00:03:58.000 This morning there was an announcement
00:04:00.280 that between 30 and 50 million barrels of Venezuelan oil
00:04:04.960 will be transported to the United States
00:04:07.740 and refined at those Gulf Coast refineries.
00:04:11.140 Now, what effect does that have
00:04:13.440 on the Canadian export thing?
00:04:15.540 That's a market function.
00:04:16.740 I can't tell you what that is.
00:04:18.660 And in fact, there are people out there like Richard Mason at the School of Public Policy
00:04:25.040 who's been giving out very, very accurate numbers.
00:04:28.460 It would be very useful to hear what he has to say about that dynamic that's happening.
00:04:32.960 Well, let me just stop you there for a second.
00:04:34.700 If there are 50 million barrels of oil going into the Gulf Coast refineries coming from Venezuela,
00:04:43.260 do they have spare capacity or is that going to displace alberta oil in the very near future
00:04:49.760 well i don't know i don't know but 50 million barrels is a lot of oil and how much what have
00:04:57.140 you produced here in alberta is it four million a day it's about yeah it's about that number um
00:05:02.240 and uh so it's really only well that's the number that's going to the united states that's only 12
00:05:07.560 Well, that's right.
00:05:10.340 So this is a very dynamic market.
00:05:11.960 So let's talk about that Gulf Coast refinery system.
00:05:20.640 What's called the USGC, the United States Gulf Coast Refinery Complex, is probably one
00:05:26.000 of the largest, most well-developed refinery systems in the world.
00:05:31.240 It's required billions of dollars of investment for coking, desulfurization, and hydrocrackers.
00:05:37.320 and it was built specifically around Venezuelan heavy sulfur crude.
00:05:46.320 That refining complex imports about 40 million barrels of heavy crude a month.
00:05:53.320 And what happened is that as Venezuelan production collapsed from 3 million down to about a million barrels a day,
00:06:02.320 which was then hit with American sanctions, that stream of oil from Venezuela caused the USG refiners to scramble to replace that oil.
00:06:16.260 And they replaced it with Alberta crude, which was coming in by Platon and was very quickly adapted to their system.
00:06:23.500 It was perfect for their needs, as a matter of fact.
00:06:25.780 So here you have Canadian Cold Lake, the Mexican, Mayan, Brazilian heavy grades were being offered, but Canadians supplied 13.6 million barrels per month, which represented 34% of the largest single crude to those U.S. refiners.
00:06:46.520 And as a result of that, Canadian Cold Lake and WCUS differentials tightened with the WTI discount narrowing from around $13 a barrel down to $9 a barrel.
00:06:59.560 So the sanctions that the Americans put in place had a tremendous positive effect on Canadian oil production and transport to the United States.
00:07:12.820 It's 34% of that refinery.
00:07:17.100 So that's what's at risk here for us.
00:07:19.060 That's what's at risk.
00:07:19.980 That's the number that we don't actually know.
00:07:22.500 We don't know.
00:07:23.260 Well, we don't know because the market will function here.
00:07:26.280 Do we know what we don't know?
00:07:28.820 No, I don't.
00:07:29.520 I don't think we do.
00:07:32.340 When you look at the total situation and Mr. Trump's actions,
00:07:38.540 you could say this is about drugs.
00:07:40.380 He's certainly been very emphatic about blowing drug boats out of the water.
00:07:44.520 I mean, you can't say he isn't taking that seriously.
00:07:47.860 It certainly could be for geopolitical aims to make life difficult for China.
00:07:53.240 He's had a year of doing that in his second term.
00:07:57.780 This would fit that profile.
00:07:59.720 Or it could be about the oil, you know.
00:08:01.940 Well, I think it's about all of it, right?
00:08:04.820 but there's two very significant things hanging over this at a geopolitical aspect of this.
00:08:17.460 There's a political, as you say, point out to it, and there's also a Canadian economic level.
00:08:24.020 And right now, Canadian economic level is kind of the bottom of the triangle.
00:08:27.620 Let's talk about that for a minute.
00:08:29.460 But there was once a proposal to build a pipeline to the coast from,
00:08:37.400 ah, yes, you know what I'm going to say, don't you?
00:08:39.480 Okay, we're talking about the Northern Gateway.
00:08:42.440 Am I correct in saying that that was fully permitted,
00:08:45.580 ready to move the bulldozers in?
00:08:47.860 Yeah.
00:08:48.360 And it was one of the first things that the new liberal government
00:08:52.340 headed by Justin Trudeau did was to cancel that project.
00:08:57.320 Yeah.
00:08:57.800 Where would we be today if we had built the Northern Gateway?
00:09:01.640 That's a really perceptive question, and it's one that has not been, I think,
00:09:08.600 as thoroughly examined as it should in terms of what that cancellation has cost Canada.
00:09:14.680 At one point, I remember one writer at the time that happened,
00:09:20.360 and I was still at the National Energy Board at that point.
00:09:23.800 The National Energy Board had fully accredited and approved that pipeline.
00:09:31.000 It required a certificate from the federal cabinet.
00:09:34.480 They denied it, and they shut it down.
00:09:36.980 The cost of that immediately to the proponent, which was Enbridge,
00:09:41.420 was estimated in excess of $500 million, fully approved, fully licensed.
00:09:47.520 The real slam, well, there was a writer at that time said that that was the worst economic decision that was made in Canada's history.
00:09:59.520 And of course, you know, time has moved on.
00:10:02.520 But now, if you look back at that development and you realize that, well, Trans Mountain went ahead.
00:10:11.520 The initial estimates is that the transmountain oil would be transported largely to California to the US.
00:10:20.680 The shocking development is that much, much more than what was predicted.
00:10:26.680 I think up numbers of up to as much as 30 to 50 percent is not flowing to Asia.
00:10:32.720 That shows you what could have been with Gateway.
00:10:39.380 Now, if you look, and that's the brilliance of the question that you've asked,
00:10:44.980 if you look now with the presence of hindsight to say,
00:10:50.180 where would Canada be if we had allowed Gateway to proceed,
00:10:54.740 and it would be up and running or very close to up and running,
00:10:58.980 suddenly that oil that is at risk to China,
00:11:03.380 right now China was importing about 400,000 barrels of Venezuelan oil per day.
00:11:09.060 That's gone.
00:11:10.560 Now, not only is there a geopolitical aspect to this,
00:11:14.300 China has put billions of dollars into Venezuela to enhance the oil trade
00:11:20.680 and ensure that that 400,000 barrels a day would flow to them.
00:11:24.120 That's gone.
00:11:25.100 That would now be made up by gateway.
00:11:29.220 So this is an enormous blow to Canada because we have nothing there.
00:11:35.840 And in fact, we're at least 5, 8, 10 years away now from replicating that.
00:11:42.800 We can enhance the flow maybe by 20, 30% through the Trans Mountain pipeline.
00:11:56.960 That will help offset that flow.
00:12:01.600 But the cumulative disastrous impact on the Canadian balance of trade in our economy
00:12:10.960 from that single decision that was made by the Trudeau government
00:12:15.040 is only just now becoming to be enumerated.
00:12:19.680 You can now calculate the damage that does cause.
00:12:22.960 Now, that doesn't talk about the geopolitical damage,
00:12:26.400 but when you use that as your starting point,
00:12:29.280 And you fast forward to today, you see a federal government that shut that down.
00:12:34.320 Now you see a federal government that's saying they're going to expedite it and effectively rebuild it.
00:12:39.140 But they're going to rebuild it and accelerate it with decarbonized oil.
00:12:45.540 Well, here the federal government...
00:12:47.160 Just in case people have forgotten what decarbonized oil is, could we just remind us?
00:12:52.280 Yeah, well, the famous, the grand bargain that Premier Smith has enunciated is based on an MOU, a Memorandum of Understanding, that says, yes, we will look at building a pipeline to the British Columbia Northwest coast over the objections of Indigenous and certain Premiers.
00:13:19.760 We will accelerate that and take it to some sort of a port, which is yet undefined, with an application that is being formulated by Alberta, which will be submitted to the Major Projects Office to expedite this project.
00:13:37.980 All of these and wrapped around that pipeline is a requirement that the oil be decarbonized with a $16 billion pathways decarbonization facility.
00:13:53.340 Which is pumping CO2 underground.
00:13:55.300 Pumping CO2, taking it out of that production stream, not a refining stream, a production stream, and putting it underground.
00:14:01.980 It's not an EOR, an enhanced oil recovery.
00:14:06.060 It's a simple, it's a cost off the top.
00:14:09.140 You were just taking a carbon CO2 and putting it underground.
00:14:12.620 Well, these are tremendous penalties that have been put on top of it.
00:14:15.900 So look at the Canadian history of policy.
00:14:18.760 You know, I've talked to many people and they say, you know, energy policy is boring.
00:14:22.800 Well, here's energy policy.
00:14:24.620 It's not so boring anymore.
00:14:26.160 Yes.
00:14:26.500 Because we're in the middle of a $17 trillion reset.
00:14:29.880 The energy policy that dynamited Gateway, once the federal cabinet said, no, we're not going to build this, thank goodness they went with Trans Mountain, or we would have no access to that right now.
00:14:46.880 now. The card started falling with that decision. So now we have a situation where we have a federal
00:14:55.760 government that has turned around 180 degrees, saying they're now going to expedite this,
00:15:01.520 but have tremendous penalties at the front end.
00:15:04.240 So those penalties make me doubt their sincerity. Do you really think that this
00:15:12.800 is going to be the shock that Mr. Carney needs?
00:15:14.960 Well, they've said that the federal government,
00:15:19.280 on top of all this, this 180-year reversal,
00:15:24.960 where now suddenly we're in full panic mode
00:15:27.360 to get alternative access outside of the United States.
00:15:32.000 They've said there's two major conditions.
00:15:33.600 One is you have to have an indigenous partnership,
00:15:36.800 and the second is that you have to be able to decarbonize and do that oil.
00:15:42.480 Well, the question is right now is that will the private sector come to the table
00:15:50.080 with those kinds of preconditions on it?
00:15:54.000 Is there a market?
00:15:55.000 Is there a political capacity in Canada to actually bring this about?
00:16:00.100 Because remember, you're talking two years before you even get to put pipe in the ground,
00:16:05.420 assuming you've got an approval.
00:16:07.640 You know, bearing on that matter of is Mr. Carney sincere about this, I gather there's an oil glut at the moment.
00:16:15.840 Well, to expedite the new pipeline so that we can offer our higher priced oil into a lower priced oil doesn't sound like, doesn't give me much confidence.
00:16:32.820 Well, those are the questions that any private sector investor is going to be asking, is that if you have a $16 billion penalty at the front end before you can build a $20 to $30 billion highly controversial pipeline to get to market in 5 to 10 years to offset what may be happening in the Gulf, and we're not sure what that is because that's going to be driven by market forces.
00:17:02.820 Right now, the refineries will take the best-priced oil that they can get,
00:17:09.100 whether it's Canadian or whether it's Mexican or Venezuelan,
00:17:13.760 and they will refine it and they will put it out into the U.S. market.
00:17:17.360 What has happened here is that this is a phenomenal market intervention
00:17:22.620 by the Trump administration.
00:17:25.060 They are controlling the oil.
00:17:26.560 Well, what has happened in Venezuela is that when the sanctions came in,
00:17:32.820 and the Americans blockaded effectively the oil tankers,
00:17:39.100 what happened is that their heavy oil production from their fields
00:17:42.820 filled up all of their storage capacity.
00:17:46.620 If you fill up your storage capacity,
00:17:48.700 you've got to start shutting down heavy oil wells.
00:17:51.580 When you shut those down, that's a very serious thing
00:17:54.080 because it's very hard to get those things up and running again.
00:17:57.360 Now, what Trump has done is he said,
00:17:59.680 okay, we'll take the surplus off your hands for free.
00:18:02.360 we will sell it to the world market, we will refine it with American refineries and American tankers
00:18:08.440 and American transport systems, and then we will sell it to the market. Then we will put the money
00:18:13.640 in American banks and then we'll dispense it to whomever we choose, presumably the Venezuelan
00:18:19.400 people. Well, that solved the problem for the Venezuelans because now they don't have to shut
00:18:24.920 down their producing fields and their storage capacity will in fact be bled down so they can
00:18:31.880 and start to refill it.
00:18:34.940 So at least they're keeping their system running.
00:18:38.500 But the Americans are, this is a market intervention,
00:18:43.820 the likes of which I don't think is in history.
00:18:48.580 Right, so the reset that we're talking about
00:18:51.600 is from this situation.
00:18:54.360 Trump is doing the reset.
00:18:56.100 What does it look like in six months time?
00:18:59.240 Well, that's another really, really good question.
00:19:01.940 I don't think anybody knows right now.
00:19:04.280 But I can tell you that what this is,
00:19:08.680 is a gigantic wake-up call for the,
00:19:13.820 I don't know, I don't want to use an adjective here,
00:19:17.400 but the Canadian energy policy-
00:19:20.420 Let's say the government of Canada.
00:19:22.900 Canadian energy policy has led us to a gigantic wake-up call,
00:19:28.620 Where now, what must we do?
00:19:33.520 Well, it's very simple.
00:19:35.700 We've got to diversify our markets, and we've got to maintain our competitiveness.
00:19:41.060 And the Prime Minister in Paris said that he's saying the right words,
00:19:46.940 we've got to diversify markets, we've got to make oil, Canadian oil competitive.
00:19:52.800 Well, how do you make Canadian oil competitive when you shut down the pipelines?
00:19:57.300 You're forcing decarbonization, which by the way, it's not Canadian oil which will be the only oil producers in the world that are forced to decarbonize their oil while we bring international sourced oils into Eastern Canada for refining, which is a big source of CO2.
00:20:22.380 There's much more CO2 generated when you're refining than when you're producing.
00:20:28.140 But with this conflict that we've got running,
00:20:31.660 where now Venezuelan oil effectively can come into Montreal and New Brunswick,
00:20:36.780 but Canadian oil has to be decarbonized.
00:20:39.980 And it's not just Canadian oil that is the only oil in the world
00:20:44.780 that's going to have to be decarbonized.
00:20:46.420 It's Alberta oil.
00:20:47.540 Yes, more specifically.
00:20:49.140 Well, how do you maintain Canadian market access and competitiveness
00:20:55.780 when you have burdened it with the lack of pipeline approvals?
00:21:01.380 You've opened up the Canadian market to international sources of supply,
00:21:06.180 and then you have to decarbonize it.
00:21:08.100 Well, you've been very vocal on this for the last few months, Ron,
00:21:11.940 and I actually think that your opinions are starting to make a difference
00:21:16.020 where it needs to be heard.
00:21:18.900 Certainly, they know who you are and what your point of view is.
00:21:23.240 I guess the question remains a very simple one.
00:21:29.700 We can't undo what Mr. Trudeau did, but we can certainly demand Mr. Carney.
00:21:39.320 We'll see if Mr. Carney is capable of unwinding it with the conditions.
00:21:44.660 because remember, at the same time, his net zero philosophy of this government is moving ahead.
00:21:51.240 They have significant legislation in place, which is aimed towards this net zero philosophy.
00:22:00.060 And there's more legislation coming forward from Senator Galvez,
00:22:04.480 which will set out restrictions to the financial industry to invest in the hydrocarbon.
00:22:09.220 So you've got this incredibly complex series of, well, one could say they're contradictory policies.
00:22:18.160 How do you make Canadian oil competitive and accelerate its market access and diversify our markets with this legislative regulatory burden that's been imposed upon it?
00:22:29.480 Now, the Premier of Alberta has talked about this at some length, where she's signed this agreement, this grand bargain with this MOU, but at the same time, she's saying, you know, we have to be rational, and we cannot continue down the road of economic self-destruction.
00:22:52.000 So, this is a very complex policy environment that we've got in Canada.
00:22:56.580 You think I was going to come back to Halter?
00:22:58.860 Well, she's got an election in 2027.
00:23:03.140 Well, I don't know.
00:23:04.660 I don't think there'll be a pipeline.
00:23:06.460 Well, the question is, who in the private sector is going to step up and enter this competitive environment?
00:23:16.180 Yeah.
00:23:16.600 So Trump has actually another question, Ron, that we're almost out of town.
00:23:20.300 I do want you to respond to this.
00:23:21.760 As we speak, there is a naval intersection taking place.
00:23:27.900 in the in the atlantic yeah an american coast guard vessel i believe yeah uh which sounds less
00:23:34.660 militant i guess than uh than the navy but the u.s coast guard uh vessel is intercepting a russian
00:23:41.540 flag tanker a couple of thousand miles from the american coast um it takes me back to our high
00:23:49.280 school studies about the war of jenkins ear and things like that you know well that's a do you
00:23:54.800 Do you, in your sort of black moments, fear that this is all going to get so out of hand that people are going to start shooting at each other?
00:24:02.920 Well, that's a geopolitical question, and it's very timely.
00:24:07.620 I don't know.
00:24:08.500 We'll see.
00:24:09.540 But, you know, there is an upside to this, and I don't want to.
00:24:13.660 Tell me the upside.
00:24:14.640 Well, the upside is that this regime in Venezuela drove almost 8 million Venezuelans out of the country.
00:24:21.760 And those 8 million Venezuelans were top-level, included top-level petroleum engineers, marketers, and so on.
00:24:34.860 The upside to that is many of those very, very competent people that I worked with Pedro Vesa in Venezuela back in the 80s were very, very capable people.
00:24:45.660 and they came to Canada and they're working in the oil sense and they are speaking out
00:24:53.340 more and more. People are seeking them out. Very, very, very capable.
00:24:57.260 What are they saying?
00:24:58.060 Well, they're saying it's going to take a long time to turn this around. Now, the fact that
00:25:04.300 Trump has used and grabbed that oil that was in storage and is bringing that to market very
00:25:11.580 quickly. That's a market blip, whether or not it's significant or not. But the point is that it is
00:25:18.940 assuming that the geopolitical situation and the internal political situation in Venezuela
00:25:25.260 can be stabilized, the least amount of time for a major return to Venezuela is three years,
00:25:31.900 maybe as much as five to ten. Okay. So there's hope. Dr. Wallace,
00:25:37.020 thank you for coming in and explaining laying all that out for us and obviously at the western
00:25:43.580 standard we are going to be staying right on top of this story as it develops the implications
00:25:49.740 for alberta are huge but so is it for the rest of the world for the western standard i'm nigel
00:25:56.620 Hannaford.