Canada’s potentially irrelevant energy policy conflict

Infrastructure constraints likely to restrict the country from substantially raising output to replace lost Russian barrels

Canada’s major oil and gas producing provinces are butting heads with the federal government yet again as Russia’s invasion of Ukraine brings energy security to the fore. The provinces want to produce more oil and gas in the short and longer term to make up for lost volumes from Russia. The federal government wants to help support European energy security as well, but it has a different view of how to do so given the country’s Paris climate commitments. Ironically, the difference of opinion may be irrelevant, as Canada can produce little additional oil and gas in the shorter term, while substantially higher production levels are unlikely in the longer term due to infrastructure constraints.