The CEO of TC Energy, one of North America’s largest pipeline companies, has expressed concerns about new U.S. tariffs on oil and gas imports from Canada and Mexico. François Poirier warns that these tariffs could lead to higher inflation and jeopardize energy security amid growing fears of a trade dispute.
In an interview, Poirier emphasized that these tariffs would disrupt the efficient movement of energy and create unnecessary barriers to trade. He advocates for the removal of regulatory obstacles to infrastructure development in order to advance liquefied natural gas (LNG) exports and support electricity growth, especially in the context of increasing demands from sectors like artificial intelligence.
Poirier noted that tariffs usually lead to higher prices because they hinder the most efficient production and delivery methods. Despite the U.S. being the largest oil producer globally, many of its aging refineries are designed to process the heavier crude from Canada instead of the lighter grades produced in Texas.
Restricting imports could ultimately raise gasoline prices in the U.S. and affect both American refiners and Canadian oil producers. “Canada and Mexico can assist the U.S. in achieving its energy goals, providing cost-effective options and reducing reliance on Russian energy,” Poirier highlighted.
The recent imposition of a 10% tariff on energy imports sent shocks across the North American energy sector, especially in Canada, where approximately 4 million barrels a day are transported to U.S. refineries. Although industry advocates lobbied aggressively for an exemption on energy, they only succeeded in securing a lower tariff compared to the 25% imposed on other goods.
Poirier mentioned that in the short term, TC Energy would remain shielded from the tariffs since it operates on a fee-based structure. However, he cautioned that the financial health of its customers could be influenced in the long run, impacting business and investment.
Following the tariffs, Canada announced retaliatory measures targeting over $100 billion worth of U.S. goods. Additionally, the Ontario premier threatened to halt electricity exports to the U.S., which may lead to increased consumer prices in northern states.
Poirier pointed out that the tariffs underscore Canada’s heavy dependence on the U.S. for energy exports and highlight the need to diversify its markets. He suggested that expanding the LNG industry and constructing more oil pipelines to the coast could be effective strategies.
Headquartered in Calgary, TC Energy operates vast networks of pipelines across North America and is involved in supplying gas to LNG Canada, the nation’s first major export terminal expected to start operations later this year.
Poirier expressed hopes to significantly increase the capacity of existing pipelines to LNG Canada. After spinning off its oil pipeline division last year due to regulatory challenges related to the Keystone XL project, he believes there’s an opportunity for Canada to enhance its crude oil and natural gas exports, benefiting both domestic and international markets.
He concluded by asserting that “cooperation among the three countries allows each to achieve more than they could individually.”