Forward-looking Canadian energy policy needed against President Trump’s authoritarian moves
United States President Donald Trump says his country’s seizure of Venezuelan oil reserves should put “Canada on notice.”
If Canadians weren’t already “on notice” as to the U.S. president’s rapacious, hegemonic approach to strategic resources in the Western Hemisphere, they sure as hell should have been. Long before now.
The Trump administration announced on Aug. 28 an agreement with Venezuela's Interim President Delcy Rodríguez to secure control of key Venezuelan oil reserves. The Americans seized then-Venezuelan president Nicolás Maduro last January, whisking him to a high-security jail cell in Brooklyn. The Trump team installed Rodríguez, who had been Maduro’s vice-president, while insisting on the right to run the country themselves.
The Americans clearly made Rodríguez an offer she couldn’t refuse, as Don Vito Corleone famously put it in The Godfather. Opposition leaders in the South American country are denouncing it as an unconstitutional assault on the country’s sovereignty and pillaging of its national patrimony.
Trump's treatment of Venezuela illustrates a number of disturbing realities for Canada.
When considered along with other recent moves by the Trump administration, it becomes crystal clear that Canada needs to forge an independent path that diverges from the U.S. on strategic energy and climate issues.
And we will need to withstand any blowback that that divergence provokes from the Trump administration.
The Venezuelan deal puts us on notice—once again—that the Trump regime expects preferred access to—if not outright control of—strategic resources in the Americas without much regard for the sovereignty of the rightful owners.
Trump is doubling down on the fossil fuel economy, even as China secures its global leadership on renewable technologies and electric vehicles.
While Beijing focuses on deploying clean energy, the American administration is looking to secure long-term oil supplies for the U.S. economy, and opposes all efforts to transition to low- or zero-carbon energy to combat climate change.
As the U.S. seizes control of Venezuelan oil reserves, Trump has also moved in recent weeks to kill renewable energy projects and weaken fuel economy standards that are meant to reduce consumption of gasoline and diesel while combatting climate change.
The capture of Maduro and subsequent “deal” for Venezuelan oil resources was foreshadowed in the National Security Strategy that the Trump administration published last November.
It posited that the U.S. must be pre-eminent in the hemisphere and the government will identify strategic resources in the region “with a view to their protection and joint development with regional partners."
While there was some language about working with local allies for mutual benefit, the reality is that Trump doesn’t see mutual benefit in trade. And the document clearly lays down a warning to U.S. neighbours: fall in line with our approach, or face dire consequences.
Control of resource development in the hemisphere would lessen American reliance on Middle East oil, the 2025 strategy says. That’s become an even-more critical goal after the U.S. and Israel launched war on Iran last February, only to see Tehran make good on its threat to close the Straits of Hormuz and choke off deliveries of 20 per cent of the world’s crude supplies.
Canadian oil producers will likely face increasing competition in the major U.S. Gulf Coast refining sector, as the American fuel companies turn to the American-backed suppliers in Venezuela. The threat will no doubt stiffen the determination in Western Canada to gain new pipeline capacity to Asia.
The American plan is to boost Venezuelan production by 1.5 million barrels for export to the U.S. That could get derailed by any number of factors, but the competitive risk for Alberta and Saskatchewan producers is real.
Alberta separatists have sought to make common cause with Trump administration officials, and MAGA and right-wing influencers have been identified as a source of disinformation and inflammatory social media posts in the sunup to the province’s October referendum on whether the province should have a full sovereignty referendum.
We should not underestimate the potential for the American president and his supporters to try to divide this country, and gain bigger influence or control over the development of Western Canadian resources. However, the Alberta government sees its best interest as having a diversified customer base for its oil and gas exports.
A parallel threat to Canada and to the world is the demand side of the Trump administration’s energy supply agenda, as in encouraging consumption for fossil fuels. Along with controlling production, they are reversing efforts to transition American consumers off oil and gas. The impact on global climate change will be profound, given the U.S. is the world’s second-largest annual emitter of greenhouse gases, after China.
The Trump administration is paying a “buyback” to offshore wind developers to cancel their leases and either requiring or encouraging them to invest that money in oil and gas projects.
Last week, U.S. Transportation Secretary Sean Duffy said the Trump administration will soon announce sharply lower vehicle fuel-economy standards, reversing a push by then-president Joe Biden’s administration to force automakers to build more fuel-efficient vehicles.
Prime Minister Mark Carney is already under pressure from Ontario Premier Doug Ford to lower emission standards for Canadian-made vehicles as a way of easing the burden of tariffs that Trump has imposed.
Earlier this year, Carney said the government will replace EV sales mandates for 2030 and 2035 with emission standards that would provide incentives for manufacturers to produce zero- and low-emissions vehicles, as well as improvised efficiency on gas-powered autos.
But as the U.S. eases regulations, the Liberal government faces pressure to do likewise in order to protect the battered sector.
Canada needs to pursue an independent, forward-looking energy and climate policy to counter the Trump administration strategy of authoritarian mercantilism. That means diversifying exports markets, but also aggressively pursuing the energy transition in order to counter the Trumpian vision of continued reliance on hemispheric reserves of carbon-intensive fossil fuels.
Shawn McCarthy is a senior counsel at Sussex Strategy and a former national business reporter covering global energy for The Globe and Mail. He’s also the past president of the World Press Freedom Canada, a volunteer advocacy group based in Ottawa.
The Hill Times