Can Canada Become an Energy Superpower?

Guest

Andrew Leach

Energy and Environmental Economist; Professor, University of Alberta

Transcript

Andrew Leach: Even under a Biden administration that might’ve been less friendly, certainly to Canadian oil imports, I don’t think we were dealing with a world where we thought we would’ve woken up on a Monday morning to find out that all of a sudden our market access or our access to our own markets for our crude had been disrupted. But now you sort of start to feel like everything might be on the table, and that’s an uncomfortable feeling here in Canada. I think that’s going to dictate a lot of our domestic energy policy, unless the US approach changes.

Bill Loveless: From oil pipelines crossing the border to integrated electricity grids, energy trade has long been a key element of the mutually beneficial economic relationship between the United States and Canada. Now, President Trump’s America First trade policies are upending traditional certainties of North American cooperation on both sides of the border. Last week’s snap election has brought a significant change in Canada’s leadership.

Former central banker, Mark Carney, edged past conservative Pierre Poilievre. A surprising win for the Liberal Party. This narrow margin of victory reflects a deeply divided electorate grappling with issues of economic security, climate policy, and Canada’s place in a changing world. Carney has boldly declared the traditional US-Canada relationship over and pledged to forge a more independent path.

So can Carney balance both clean and conventional energy development amid provincial tensions, particularly with oil-rich Alberta? Will Canada respond to Trump’s proposed tariffs where nearly all of its crude oil exports flow to the United States? And will Carney use his experience as a champion of climate finance to help Canada achieve its goal of net zero emissions by 2050?

This is Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I’m Bill Loveless.

Today on the show, Andrew Leach. Andrew Leach is an energy and environmental economist. He is a professor at the University of Alberta with a joint appointment in the department of economics and the faculty of law. His research spans energy and environmental economics with a particular interest in climate change policies and the law.

We discussed the climate and energy policy battles Carney faces within Canada. We consider the prospects for continuing the economic partnership between Canada and the United States amid increasingly divergent policy priorities in climate, energy, and trade. And we consider the hurdles Carney will face as he pursues his plan to make Canada an energy superpower.

I hope you enjoy our conversation, which we recorded on Friday, May 2nd, just as news broke that Carney and Trump would be meeting this week.

Andrew Leach, welcome to Columbia Energy Exchange.

Andrew Leach: Thanks for having me.

Bill Loveless: Yeah, it’s a timely conversation. I look forward to having this one so soon after the election in Canada. But first, tell us a little bit about yourself and the work that you do at the University of Alberta.

Andrew Leach: Sure. I’m an economist by training originally. I’ve been at the University of Alberta since 2006, so I work on climate policy, energy policy, oil and gas, a little bit of electricity. I started in the business school and now I hold a joint appointment in the department of economics and the faculty of law.

Bill Loveless: Yeah, quite a broad swath of commitment you have there on these various topics and certainly well-suited to help us understand some of these issues taking place in your nation today. First, let’s make sure we understand the results of Canada’s election. How Liberal Mark Carney’s party went from being a significant underdog among voters to a winner over Pierre Poilievre and the Conservatives?

Andrew Leach: Yeah, well, I think there’s really a couple of different pieces. One is, of course, your President Trump played a massive role in the election by starting a trade war that I think it’s fair to say nobody up here was looking for. And by discussing Canada’s sovereignty, right? Talking about Canada as a 51st state, talking about then Prime Minister Trudeau as Governor Trudeau, I think that put Canadians in a very different frame of mind. So we switched from having an election about many of the topics that Mr. Poilievre had been talking about for a long time—crime, security, taxation and in particular carbon taxes—to having an election about who was best positioned to deal with Canada in a crisis.

And simultaneously with that, I guess, or coincidentally with that, you had Prime Minister Trudeau resign his position to be replaced by Mark Carney. That took out a lot of the deep unpopularity of Prime Minister Trudeau and brought forward a leader with some more crisis management experience for sure. So I think Canadians bought into what Mr. Carney was selling, saw him as maybe more prepared to deal with the crisis. And on the other side, I think Mr. Poilievre was penalized for not being able to pivot during the campaign to follow where Canadians were on the issues. Now that said, it was still a relatively close election, right? Very similar to what when we talk about US elections, that a very small swing in the popular vote in the right places can move the election dial quite a bit.

Bill Loveless: Yeah. Last time I checked some 99% of the vote was in and Liberals had won 43.7% and Conservatives, 41.2%. I’ve also read that it was the first time since 1930 that the Liberals and the Conservatives each won more than 40% of the votes. So it was in fact quite close between those two parties.

Andrew Leach: And we had really a collapse of what has historically been our third and fourth party. The Bloc Québécois and the New Democratic Party of Canada both saw their vote shares collapse, and that led to closer to a two-party race. And then when you look at representation in the House of Commons, which is our key legislative body, the Liberals hold a very strong minority. They haven’t quite got to a majority position in the house, but they have I think as of last check 168 seats. So that puts them four short of a majority position. So they’re in a very strong position, quasi-majority if you want to think of it that way, but still that possibility that if they end up offside with all of the other parties, that they could lose the confidence of the house and that we’d be back to an election in a relatively short time period.

Bill Loveless: How soon might we see a government formed?

Andrew Leach: I think within—we see Mr. Carney is now scheduled, I think to go to the White House within a few days and I expect you’ll see an announcement probably at the end of next week, I think on formation of government, if not before.

Bill Loveless: Yeah. Well, as you mentioned, until early this year, Conservatives had been counted on winning this election. They envisioned what they were calling a carbon tax election, one that would take advantage of popular discontent over that fee. And with former Prime Minister Trudeau championing it, they coined a quote “ax the tax” slogan. What happened?

Andrew Leach: Well, so I mean you saw a number of things that happened in Canada with respect to the carbon tax. I think a couple of them that we saw in the US as well, the pressure from inflation in particular after COVID and after the Russian invasion of Ukraine. We saw that general price level increase that most Western economies saw, and the Conservatives were able to very definitely leverage that and blame the carbon tax in large part for that increase despite it not really being that large a factor in the overall change. They were able to lump that in with government spending and sort of place a lot of that blame on Prime Minister Trudeau in response. And coincident with that, you saw the federal Liberals step a little bit away from carbon pricing and put more of their political emphasis on other measures on regulatory measures, clean electricity regulations, clean fuel regulations and emissions cap on oil and gas. So you had one party fighting essentially constantly against the carbon tax and you didn’t have the government defending it. And so those two things I think morphed into a situation where – and we saw this in Mr. Carney’s platform – the carbon tax was sort of dead on arrival by the time we got to the election campaign.

Bill Loveless: And polling data shows that voter concern about climate change dropped sharply during the campaign with the issue failing to rank among the top 10 factors influencing votes according to data I saw from one agency. So it more or less that issue, climate, more or less disappeared right from the campaign trail.

Andrew Leach: It absolutely did, and your president takes part of that blame. I think inflation takes part of that blame, but when you are facing a situation where some of your key national industries are looking at either losing or losing a lot of the value from their largest and most important market, your focus rightly shifts, right? When we’re talking about the possibility of major industries either shutting down or rationalizing dramatically in a very short period of time, then the question of what are our emissions going to be in 20 years from now does not really register on people’s radar in the same way.

Bill Loveless: Right. Andrew, to what extent might divisions within Canada test national unity in the face of President Trump? The Liberal and Conservative parties have starkly different agendas, and as you noted, they were not all that far apart in the election and there are still regional differences in the country.

Andrew Leach: Yeah, I think when you look at the policies, the divergence isn’t as large as people might think, but where you really are seeing the differences is the degree to which I think the previous Liberal government was blamed for a lack of advancing energy projects across the country, which are primarily of importance, I think, to Alberta and Saskatchewan directly. So there’s really a feeling here in Alberta where I am and also next door in Saskatchewan, that the policies of the Liberal government, number one, really hamstrung the growth in the energy industry. And number two, that there really isn’t a recognition of the importance of that industry or particularly the oil and gas industry in the rest of the country, that the Liberal government was focused on, whether it was emissions targets or forcing clean electricity and such things, and really not paying attention to what that would mean on the ground in Alberta.

And you have very, well, you have in both Alberta and Saskatchewan quite right-of-center governments that have, I think, and this is not new, but have used that conflict with the federal government to essentially preserve and enhance their own popularity on the domestic side. So now that’s been ratcheting up and the latest ratchet is very much this question of national unity. You saw just this week both premiers in Alberta and Saskatchewan saying, well, we’re not really talking about supporting a referendum on separation, but if residents want to pursue that, then that’s their right and we’ll amend the legislation a little bit to make it easier for them, and then we’ll see where it ends up. So there really is a little bit of at least nodding and winking towards that possibility. My hope, of course, is that it’s going to wane very quickly over time, that the premiers will realize there’s not a lot of acceptability for that, but the numbers are real. I mean, depending on who you ask, 25 to 30% of people in those provinces would support separation in some form from Canada, whether it’s more provincial autonomy, becoming the 51st and 52nd states, or going it alone. I think you’d find support for all three of those.

Bill Loveless: That’s interesting. Separation. I didn’t realize it was coming up as a matter of conversation in those provinces these days. I remember years ago it was a big issue in Quebec, right?

Andrew Leach: Yes. Back to Pierre Trudeau era again, for sure. In the seventies and then again into the 1990s, we’ve had a couple of referendums on separation in Quebec, and that’s really set up the parameters by which this could happen from a legal perspective, a constitutional perspective, and you’ve seen it ebb and flow in Alberta over time and Alberta and Saskatchewan over time as well. And it really is, in this case, I think a dissatisfaction with the policies of the Liberal government to date, but also this feeling of underrepresentation, this feeling that there is something distinctive to the western provinces that just isn’t represented in Ottawa by the electoral process. And you see that when you look at the electoral map. You see a big swath of Conservative blue from the interior of British Columbia all the way through Alberta and Saskatchewan with I think the governing Liberals having two representatives in Alberta, one in Saskatchewan, and that being concentrated in the center of the major cities, well at least in Alberta, the center of the major cities, not so much in Saskatchewan.

Bill Loveless: And that talk of separation could be music to the ears of Donald Trump.

Andrew Leach: Potentially. I mean, I think from President Trump’s perspective, I think it might be a fool’s errand trying to understand exactly where his agenda lies other than chaos, but I think any sort of situation where he feels that he has sort of bargaining partners weakening themselves, he’s probably going to be happy about that.

Bill Loveless: Carney has declared the traditional US-Canada relationship over and pledged to fight back with targeted retaliatory tariffs and to act with what he calls purpose and force, but decoupling the Canadian and the US economies is not easily done. And considering the enormous trade in so many commodities including energy, how might he go about doing that?

Andrew Leach: Well, I think you’re absolutely right, not easily done and impossible to do without massive costs on this side of the border. The US is the world’s most important economy, and it’s right next door to us, and it uses a lot of things that we make and we use a lot of things that the US makes. And so I don’t think there’s any other outcome here than sort of the circular firing squad where we harm each other. And so I think the best outcome would be for more of a return to the traditional relationship that we’ve seen, particularly since the eighties with free trade and to start moving those commodities and other both people, commodities, services, et cetera, across the border as seamlessly as possible. So I think that has to be the end goal from Mr. Carney’s perspective. I think he’s talking about expanding our trade relationships with Europe, expanding our trade relationships into Asia Pacific, but it’s impossible to get away from the fact that… let’s use oil as an example.

I mean, moving oil from Alberta to Minnesota or to Chicago or to even the US Gulf Coast is going to be the best option for that crude, and it’s not by accident that that’s where our pipelines run and certainly the largest local market for our crude. That’s obviously changed a bit with the increase in domestic production in the US, but you still can’t give it away. And you go back and think of how much investment was done in the US refineries through 2000 Bush policies in 2005 to refit those refineries to process Canadian crude. I mean, it really has been a relationship of collaboration. And so to give that up I think is incredibly harmful. Same thing’s true on electricity, same thing’s true on gas. And so I think Mr. Carney has a tough road ahead, but when you have a president and administration that clearly responds to or appears to respond to power and alternatives and a negotiating position, I think you have to now as Canada look away from the US as a default and start building those alternatives in a way to strengthen your US trading relationships as well.

Bill Loveless: But as you note, there’s the Midwest refineries, for example, Midwest United States refineries are heavily dependent on Canadian crude. Losing it would be a significant blow to their operations as well. So there’s a lot to be gained and lost, I guess, and certainly lost on both sides of the border on oil trade, energy trade. It seems as though it makes it difficult to understand the extent to which there could be some sort of a trade war between these two countries involving energy.

Andrew Leach: And I think we have to really take a great example, which is our domestic supply into Ontario. So our domestic supply to our two largest, most populous provinces from Alberta, that all routes through the US, right? It crosses the border going south of the Great Lakes from Manitoba and then back into Ontario through Sarnia, Detroit-Sarnia or near Detroit into Sarnia. And so that type of relationship is something that you don’t see very many if any other places in the world, that our sovereign own market energy supply routes through our neighboring country to the south. So you don’t take that apart without very big losses on both sides. Electricity is another great example. If we go to Eastern Canada, Western Canada or hydro resources. We rely on that US export market to monetize those resources. But the US market relies and will rely probably on an increasing basis on our ability to store water as opposed to the much more expensive option of storing renewable electricity. And so the more that those systems are integrated, I think the better it is for both sides of the border. But you have to also take into account once you start talking about, okay, 10%, 25% tariffs, then that changes the trade math.

Bill Loveless: Carney has pledged to make Canada an energy superpower and to invest in clean and conventional energy. The energy superpower reference to some may echo Trump’s call for energy dominance in the United States, but on closer inspection, the policy seems comparable to the clean energy goals sought by the Biden administration through the Inflation Reduction Act and other measures. Is that a fair statement?

Andrew Leach: Well, I think we don’t know a hundred percent yet what we’re going to see from Prime Minister Carney. I mean, for me, looking back, it’s interesting in a Canadian context because this was very much the line that Prime Minister Harper used early in his term. And he gave one of his, what I think is a favorite speech of his he gave, which is I think referred to as his energy superpower speech back in I think 2007 on a trip to Europe, where he talked about not only the ability to expand our resources, but our role in a world acting on climate change, which is a little bit of unfamiliar territory for then Prime Minister Harper. But I think that rhetoric’s been around for a while. And I think by any metric, you look at where Canada sits, we’re in the top five in the world or top six in the world in natural gas, top four I think in oil, massive clean electricity system with some of the cleanest electricity supply in the world.

We have our uranium mining sector. So I think by any stretch of the imagination, we fit into that definition of energy superpower in a global context. Question will be what does Prime Minister Carney have in mind in terms of the expansion of that position? So is it more barrels per day, more gigajoules per day of oil and gas production? Is it renewable resources? Is it new hydro? Is it rare earth mining and battery elements mining? Where does this come from? And I think we’ll see in the coming weeks, who does he appoint as Minister of Natural Resources and Energy, who gets appointed as Minister of the Environment? Those will be big telling signs for what direction his government’s going to go.

Bill Loveless: Andrew, you mentioned Prime Minister Harper. For those of us who may need to recall the chain of prime ministers that has taken place in recent years, tell us who he was when he was in office.

Andrew Leach: For sure. Prime Minister Harper was our last Conservative prime minister in office from 2006 through 2015. So he was replaced by Justin Trudeau and really the Western base who’s a Calgary member of Parliament and originally elected as part of a western reform movement, and then eventually that merged with the Conservative party. So it was really a western energy based or energy focused government when he came in. So it was pretty remarkable at the time to see him early in his term, make a little bit of a pivot towards some stronger language on climate with that energy superpower speech that I talked about. That kind of went away later on. But it was there for a bit.

Bill Loveless: On climate policy, Carney and Liberals say Canada needs one that moves past division, focuses on the future, the nation wants. He said we quote “need a climate policy that is unifying, credible and predictable.” And we’ve discussed there are major divisions in the country over climate policy, especially over things like carbon fees, as we discussed. Alberta and Saskatchewan have long argued that they have been taken advantage of by Liberal governments and Canadians in the East who benefit from their oil and gas sector while supporting policies that threaten those provinces’ livelihoods. How might Carney pursue a unifying climate policy amid those differences?

Andrew Leach: It is going to be really challenging. I think right now you’re seeing a real pullback, even from the oil and gas industry itself, which had embraced the idea of a large carbon capture and storage deployment. They had embraced the idea of net zero goals by 2050 for the oil sands industry. There was a lot of public communication on these goals, et cetera, and now you’ve seen a real pullback on those from leaders in the industry saying, well, that’s not our priority now, talking about increasing production, increasing revenue, et cetera. So I think it is going to be—the bargains that maybe were on the table and available to Prime Minister Trudeau, it doesn’t sound like those are going to be there for Prime Minister Carney, that the more strident Alberta and Saskatchewan governments are saying, okay, we need much faster approvals. We need no carbon fees, no industrial carbon price. We need no regulations on emissions or remove a substantial share of the regulations on emissions and get projects built in very short order. So it’s really a continuation of I think what is an effort to hang the blame on the Liberal government for some of the projects not getting built, for the lack of major project investment in the oil sands, in LNG and pipelines, et cetera, that we’ve seen over the last decade.

Bill Loveless: Does Carney back away at all from his longstanding support for things like ESG, environmental, social governmental standards, the Glasgow Financial Alliance for Net Zero or the phase-out of oil and gas?

Andrew Leach: Yeah, it’s a good question. I mean, it was certainly telling to see the politics trump the economics, if I can use those, when we talk about him removing the consumer carbon fees. So in his book, his book “Values,” he talks about how the Canadian Carbon Pricing System is a model for the world and one that we should strive for, and I don’t remember the exact quote, but something along those lines and is very laudatory of that program. And then we see his day one action as Prime Minister is to have his cabinet essentially zero-rate that carbon price. So I mean, that’s a big, big pivot. It was a politically necessary one. I’m not a fan of it. I helped design the carbon pricing system, so it bites pretty close to the bone for me.

But you’ve seen some of the other parts of his previous priorities still there. Certainly on the shareholder disclosures and reporting, the question will be how do we get from that reporting and awareness to actual regulations and or spending—what are we going to see? And I don’t think there’s enough in the platform to know what exactly we might see going forward. And in a minority parliament, Prime Minister Carney is going to need support from somebody else to get any legislative changes passed. So he’s going to need either support from parties to the left or support from parties to the right. And in Canada, we don’t talk a lot about the potential for support from parties to the right, but he may find himself needing to rely on that as well. So we’ll see what he comes up with, but it’s a little bit of an unanswered question to this point.

Bill Loveless: Would he lift the emissions cap on oil and gas, the cap that currently exists under government regulation, or should he, or what happens if he does it? Can the oil sands grow production without growing emissions?

Andrew Leach: So the emissions cap is a draft regulation at this point, so it has not been implemented. It’s in the regulatory development process. And so he has said he’s remained committed to that. But of course this is kind of committing to a speed limit, right? The real question is what is that speed limit going to be? And so that part’s not locked in yet. And then the second piece is what are the flexibility elements within any such regulation? So you could write an oil and gas emissions cap that would allow for massive expansion of production and emissions, or you could write one that would be sufficiently stringent that it would drive emissions down. And if the companies aren’t willing to invest in new technology, that will also end up with a trade-off on the production side. We will see what comes from that. And then the interesting thing for me will be the positioning of the oil and gas industry.

So the oil and gas industry for a long time was telling Canadians very clearly, “You don’t need to. We can grow production, maintain production while driving emissions to zero. We have the technology, we can do it.” [Meaning] production side emissions. And now all of a sudden that ambition seems to have gone by the wayside. And I think they’ve seen that the trade-off of: would we rather produce this without investing the capital and operating expenses and carbon capture and sequestration? And the answer appears to be yes. And so maybe if the government paid for it, we would’ve been okay with it. But now I think we’re going to see another soundbite, another series of soundbites coming from the industry, which is more about productivity and employment and government revenues and wages, et cetera, from that potential production of oil. And anything that the Liberal government is perceived to do that stands in the way of that will be met with, well, you’re going to lose millions and millions of jobs and maybe billions of jobs at this rate by the way the soundbites are traveling around Canada these days.

Bill Loveless: I guess what it boils down to politically right now, when it comes to climate and energy policy, what are the key differences between Justin Trudeau and Carney on energy and climate?

Andrew Leach: Well, certainly the carbon pricing policy seems to be the big one so far. So Prime Minister Carney has with his cabinet zero-rated the consumer side carbon price, has committed to a redesign – and still kind of opaque as to what that will involve – of the industrial output-based pricing system. So a system by which there is a price on emissions, but sort of like in California where you think of California where emitters are allocated some emissions credits for free, and then if they exceed that allocation, they’d have to go to the market to buy. Think of the Canadian system as being similar on the allocation side, but there’s a government window where you can essentially buy credits at a fixed price or buy emissions permits at a fixed price. So it’s a little bit of a hybrid system. He’s committed to reform that. He’s talked about a border carbon adjustment to compensate for the fact that our exporters pay domestic carbon pricing and then may not face it in the markets to which they export or vice versa for imported products.

But we haven’t seen the details on those. And then on the regulatory file, we talked about the oil and gas emissions cap. Mr. Carney has remained committed to that, which was a signature policy, I think in the last Trudeau term. Then we’ve also got regulations on electricity, we have regulations on fuels, and those, so far as we’ve seen so far, are going to remain in place under the Carney administration. So a little bit of a pivot away from pricing as the main driver and maybe more towards, I mean you highlighted that sort of an Inflation Reduction Act type approach of “we’re going to spend big dollars, we’re going to lever private capital with government spending, et cetera.” So that approach is much more present, I think, in the Carney plan to date than was the case in the Trudeau plans.

Bill Loveless: There’s a lot of discussion these days over critical minerals. Canada has potentially substantial potential when it comes to critical minerals, but can it turn that potential into action? I mean, what can Carney do in this area?

Andrew Leach: Well, so this one’s interesting because a lot of the critical mineral potential exists outside of the traditional resource province, or at least outside of the resource provinces where we have a lot of focus right now. So this is an Ontario, Quebec, Newfoundland, and Labrador storyline, so provinces with big historic mining bases, but not that same level of focus on resource policies politically. And so I think you’re seeing the potential there for one of the storylines during the election. I’ll take a little tangent here, was that the Conservative premier of Ontario, Doug Ford, did everything but put a Mark Carney sign on his lawn during the election campaign. This has caused a big division in Conservative ranks in Canada. The critical minerals file is all in or is in large part in Ontario and then to a lesser degree in Quebec. And so this opens an opportunity for a really interesting partnership between the Ford government and Ontario and the Carney government in Canada to get approvals in place for not only the roads, but also the mining projects that could go forward in Ontario’s so-called Ring of Fire region. And then to help some of those projects get to at least the start line, if not the finish line in pretty near term.

But right now, those projects have been talked about for a long, long time, but there’s not a lot of action yet. And it’s one of those areas where a lot of blame was heaped on the Trudeau government for long-term regulatory approvals. But when you start to dig into the projects, you see, okay, well, this is a project that was put forward by a company that’s since gone bankrupt. It’s a project that put in a regulatory application and never submitted the follow-up documents. So really for a lot of them, there wasn’t a lot that the governments could do. There were some though that are advancing, and I think that Ford-Carney partnership on Ring of Fire could be really interesting.

Bill Loveless: And very timely right now, just given the interest in the critical minerals among countries around the world. Indigenous communities play an important…they’re an important factor. Canadian governance, Canadian commerce, they’re protected under the nation’s rules and regulations. Is there a closer alignment now between the energy industry and indigenous communities in Canada? And if so, how did that happen?

Andrew Leach: I don’t think you can draw a general statement in that regard. I think you do have indigenous communities that are very pro-development, that have been supportive of development, whether it be in and around the oil sands region. You have indigenous communities. Fort McKay First Nation is one that comes immediately to mind, that is really right in the center of the oil sands and has built a number of business interests around supporting the oil and gas industry in Alberta. You have others that are more historically opposed, so some downstream communities downstream from the oil sands. Same thing’s true in BC. You have communities that have partnered in building LNG projects. You have communities that were staunchly opposed to pipelines that would feed those projects. And so I don’t think there’s really a clear line that we can draw there. What we’ve seen, I think, is a realization amongst industry that there is no route to major project development without support from indigenous communities, or there is no cost-effective route to it.

Some people grudgingly accept that, some people accept it enthusiastically, and I think you’re seeing a lot of work towards developing those partnerships and towards advancing projects where you may have one or two local First Nations who are in favor despite the opposition of others. So there are some complicating factors there. So another interesting dynamic since we’re talking about the recent election is two First Nations leaders were elected to the House of Commons this time around on the Conservative platform. So you’ve got Ellis Ross in Northwestern BC and Billy Morin here in Edmonton, both First Nations leaders who have been very pro-development in their own regions and engaged with, and particularly the oil and gas industry, but also more broadly. And so having their voices in Parliament I think will be a really interesting change for the country and for the conversation around First Nations involvement in energy projects.

Bill Loveless: Yeah, interesting. We’ve talked so much about the climate and energy policy potential, how the new government might respond on these issues, but again, coming back to the difficulties between the United States and Canada driven by the Trump administration’s America First trade policies and all, it seems as though these climate energy and other issues might just get lost in the mix as Canada tries to sort out and respond appropriately from its perspective to the threats from the United States these days, that these other issues may be pushed to the side as Ottawa responds and perhaps may even be ultimately affected in a big way by the trade decisions that Ottawa is forced to make.

Andrew Leach: For sure. And I think our climate policies have always been deeply affected by where the US stands. So you go back to the era of President Obama, our pipeline. You know Keystone XL became that political football, but the role of President Obama in and around the Copenhagen Climate Conference that really moved the dial on Canada. We mentioned Prime Minister Harper earlier. That question of what is the US going to demand of us from a climate change perspective really did matter a great deal during Prime Minister Harper’s administration. It was a focus. We talked about different integrated North American cap and trade type policies. Now I think the focus is going to be different. You have a Trump administration that is going to essentially exit the post-Kyoto climate process, it looks like, pulling out of the Paris Agreement.

So that leaves Canada a little bit of a different position than it’s historically been in from a climate perspective. And then on the energy file, again, having this, all of a sudden, “Wow, we’re really vulnerable.” And I think that there was some talk during the Biden administration about Line Five and the pipeline through Michigan that feeds our Canadian markets and the risk of, well, what would happen if the US said no to that? But it seemed distant. But now you really do have this situation where number one, the tariffs are an ever-present threat, but I think it’s more the chaos. Can you say with certainty that those taps won’t be shut off on Monday? You probably can’t anymore. Whereas even under a Biden administration that might’ve been less friendly, certainly to Canadian oil imports, I don’t think we were dealing with a world where we thought we would’ve woken up on a Monday morning to find out that all of a sudden our market access or our access to our own markets for our crude had been disrupted. But now you sort of start to feel like everything might be on the table, and that’s an uncomfortable feeling here in Canada. I think that’s going to dictate a lot of our domestic energy policy unless the US approach changes dramatically, and I certainly hope it will after the meeting between Prime Minister Carney and Mr. Trump next week.

Bill Loveless: Before we go, I want to mention a book you wrote a couple of years ago called “Between Doom and Denial: Facing Facts about Climate Change.” You once said you hope the book would serve as a little bit of a climate change conversation, survival guide for people. Times are certainly challenging these days, but it seems as timely as ever. What are some of the things we can learn from that book today?

Andrew Leach: Well, I think, so the book was really structured on a lecture series, so it was six myths and little lies that we tell ourselves about climate change and try to unpack a couple of them. And one of them that I think is timely right now was you had the federal government pushing what was, I think an adopted US term, the “just transition” strategy. And that really, I think gave people permission to feel like you could walk away from the oil and gas sector and everyone would be fine. And the book really takes another stance on that to say, that’s not the case. You’re not going to be able to replace the employment, the revenue, the economic activity associated with oil and gas for everybody. You might be able to make some people better off, but there are going to be costs here. And it was really pushing a story to say, if you think that government policy can create an industry that would offer the same types of employment opportunities as Alberta’s oil and gas sector does, don’t need to wait for the oil and gas industry to go away.

If you think you can do that, do it now and do it in a lot of the other communities in Canada that have seen big industrial transition. So that was one of the storylines. Then of course, the other one that I really enjoyed was this question we hear in Canada all the time, well, “You’re only 2% of global emissions or one and a half percent of global emissions. Why should we act on climate change?” And in that one, I actually quote from that energy superpower speech that Prime Minister Harper gave of saying essentially, everybody’s a small polluter when it comes down to it, but Canada, if we want that space in global markets to sell our oil, our natural gas, our other exports, that at that point it was clear that being part of a global solution was important.

I think one of the things that will be interesting for you is how that chapter ages with a Trump administration and a global financial community that’s moved away, I think a little bit from that push for Net Zero. How that chapter’s going to age. Is it actually going to be a sort of necessary condition for Canada to be seen to be acting on climate change while we’re growing our – or looking to grow some of our conventional energy sources? And I don’t think we know the answer to that yet, and you sort of alluded to it, and I think Mr. Carney’s going to have to provide us with an answer to that in pretty short order.

Bill Loveless: Andrew Leach, thank you very much for taking the time to join us today on Columbia Energy Exchange.

Andrew Leach: Oh, this has been a great conversation. Thanks for having me.

Bill Loveless: That’s it for this week’s episode of Columbia Energy Exchange. Thank you again, Andrew Leach, and thank you for listening.

The show is brought to you by the Center on Global Energy Policy at Columbia University School of International and Public Affairs. The show is hosted by Jason Bordoff and me, Bill Loveless.

The show is produced by Mary Catherine O’Connor from Latitude Studios. Additional support from Caroline Pittman and Kyu Lee. Sean Marquand is the Sound Engineer. For more information about the show or the Center on Global Energy Policy, visit us online at energypolicy.columbia.edu or follow us on social media @ColumbiaUEnergy. If you like this episode, leave us a rating on Spotify or Apple Podcasts. You can also share it with a friend or colleague to help us reach more listeners. Either way, we appreciate your support. Thanks again for listening. See you next week.

From oil pipelines crossing the border to integrated electricity grids, energy trade has long been a key part of the economic relationship between the United States and Canada. Now, President Trump’s trade policies are upending longstanding cooperative norms on both sides of the border.

Last week’s snap election has brought a significant change in Canada’s leadership. Former central banker Mark Carney edged past Conservative Pierre Poilievre — a surprising win for the Liberal Party. This narrow margin of victory reflects a deeply divided electorate grappling with issues of economic security, climate policy, and Canada’s place in a changing world. Carney has boldly declared the traditional U.S.-Canada relationship “over” and his victory signaled support for a more independent path.

So can Carney balance both clean and conventional energy development amid provincial tensions, particularly with oil-rich Alberta? How will Canada respond to Trump’s proposed tariffs when nearly all of its crude oil exports flow to the United States? And will Carney use his experience as a champion of climate finance to help Canada achieve its goal of net-zero emissions by 2050?

This week, Bill Loveless speaks with Andrew Leach about the climate and energy policy battles Carney faces within Canada, a place Carney is eager to turn into an energy superpower.

Andrew Leach is an energy and environmental economist. He is a professor at the University of Alberta, with a joint appointment in the department of economics and the faculty of law. His research spans energy and economics, but he is particularly interested in climate change policies and law. His 2023 book, “Between Doom & Denial: Facing Facts about Climate Change,” explores the challenges Canadians face as they confront climate change.

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