The Globe and Mail reports in its Friday edition that Donald Trump is vowing to use Venezuela's oil exports to drive down oil prices in the United States in what would be a major blow to the profit margins of Alberta's oil patch. A Globe editorial says that resumed shipments of high volumes of Venezuelan heavy oil to the refineries on the U.S. Gulf Coast after a near seven-year absence would oversaturate the North American market for Alberta's own heavy oil, driving down its price. Existing production from Venezuela is the immediate threat, but that threat could grow in coming years. What is needed is more pipeline capacity to Asia, where Chinese refiners will be thirsting for heavy oil to replace Venezuelan shipments. Increasing the capacity of Trans Mountain would be a quick first step. Beyond that, a new pipeline to the West Coast will be needed for Canada to connect with new Asian markets, perhaps including Japan. Alberta Premier Danielle Smith has come up with a name, the Northwest Coast Oil pipeline (which conveniently leaves out pipeline-cautious British Columbia). Canada needs a plan for building a pipeline to the West Coast, including the not-small matter of who in the private sector will be footing the bill.
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