U.S. refiners may trump president, Burney says

Oil majors prefer supply from Canada

CALGARY • Canadian oil and gas could become a “trump card” in Canada’s renegotiation of the North American Free Trade Agreement with the United States, former Canadian ambassador to the United States Derek Burney said in Calgary Friday.

Burney, who has been advising Justin Trudeau’s government on NAFTA along with former prime minister Brian Mulroney, told shareholders of TransCanada Corp., of which he is member of the board of directors, that “there will be no surrender” by Canada to the administration of Donald Trump despite his insistence the U.S. will get a better deal, or will tear up the pact altogether.

“Energy is a trump card and we will play it,” Burney said in response to a question from a shareholder about whether Canadian oil and gas could become a bargaining chip in the negotiations. Speaking to reporters after the meeting, Burney said U.S. refiners would rather import heavy oil from Canada than from unstable suppliers like Venezuela, even as American production of oil and gas from shale formations is growing. That makes Canadian energy a “strength” that bolsters its negotiating position.

“If the Americans are satisfied that they can have energy independence on their own, I am not going to dispute that,” Burney said. “I don’t buy it. I don’t see it. And I don’t think the refiners see it that way. I think they would prefer the kind of commitments they are negotiating already” with Canada.

Burney was a key player in both NAFTA and the U.S.Canada free-trade agreement.

Recognizing the value of Canadian energy, Americans demanded to have unfettered access in the original FTA and in NAFTA, Burney said, and Canada’s trade-off was to demand unfettered access to the American energy market.

As part of the re-negotiation of NAFTA, Canada should ensure politicians can no longer exercise vetoes