Trade war a ‘great opportunity’ to talk about pipelines, says CNRL president

Open this photo in gallery:

The developing trade war with the United States is a “great opportunity” to have a national discussion about building new pipelines, says the president of oil giant Canadian Natural Resources Ltd. CNQ-T.

U.S. President Donald Trump’s 10-per-cent tariffs on oil and gas imports from Canada – which received a one-month reprieve Thursday – have spurred a flurry of talk about the need for more pipelines to carry domestic product to Canada’s coastlines, where it can then be shipped to markets in Asia and Europe.

CNRL president Scott Stauth said in an interview Thursday that more pipeline capacity would give the company a chance to increase its already significant production, which hit a record high of roughly 1.36 million barrels in 2024.

“We would like the opportunity to see additional egress come out of Canada and go to the coast. We’d be supportive of those types of projects and we’re happy to work with both provincial and federal governments in those discussions,” he said.

Other industry voices and calls from Alberta for such projects have been particularly loud. This week, for example, Enbridge Inc. chief executive officer Greg Ebel said Canada should declare pipeline projects in the national interest, while Premier Danielle Smith noted there has been a “sea change” in support among premiers for various pipelines.

Federal Natural Resources Minister Jonathan Wilkinson said in February that Canada should have a national conversation about whether a new east-west oil pipeline is needed to counter protectionist threats from the U.S., though he emphasized this week that facts must prevail.

Developing CNRL’s sizable reserves would create “significant creation of wealth for Canadians,” Mr. Stauth said. “I think it’s something that all Canadians should be looking at as a positive opportunity.”

One of the companies Ms. Smith mentioned this week as having an interest in pipeline expansion is South Bow Corp. The liquids infrastructure business is a spinoff from TC Energy Corp., which originally proposed the Keystone XL pipeline expansion but is now out of the liquids game.

South Bow has said it has “moved on” from Keystone, which would have carried crude from Canada’s oil sands to U.S. refiners. It was halted in 2021 by TC after then-U.S. president Joe Biden revoked a key permit needed for an American stretch of the project.

Bevin Wirzba, South Bow’s chief executive officer, said Thursday that any decisions on pipeline spending will be measured against the company’s risk appetite.

“We are encouraged by the enthusiasm expressed in the United States and Canada regarding advancing energy solutions and we are 100 per cent in support,” he told analysts on an earnings call.

He said South Bow has received a lot of questions regarding its current open season, a period when the company seeks commitments from shippers for new crude oil transportation services, which it then uses to determine interest from potential users and secure shipper commitments.

Mr. Stauth said Thursday that he thinks any additional capacity on Canadian pipelines will be used well into the future.

“The demand for Canadian crude oil in the U.S. … is pretty undeniable,” he told The Globe and Mail, because refineries were constructed at great cost specifically to process barrels from Canada.

“To the extent that that desire is there to do so, I would see barrels continuing to move and supplying and supporting the U.S. consumers.”

He said CNRL is still working to understand what effects tariffs will have on the price of oil. The levies been a significant source of chatter on recent oil and gas earnings calls. In the case of CNRL, however, the vast majority of its barrels are sold in Alberta, with only 87,500 of them heading south each day.

So while the price of oil will affect the company’s bottom line, Mr. Stauth told analysts on a Thursday earnings call that its low operating costs and the “significant flexibility” in its 2025 capital spending budget puts it in a good place with a trade war looming.