Canada-EU Energy Alliance: A New Route for Europe's Energy Security?

Canada is exploring an energy alliance with the European Union to bolster Europe's energy security amid strained relations with the United States. However, experts say this doesn't necessarily mean tankers crossing the Atlantic Ocean laden with oil or liquefied natural gas.

Werner Antweiler, an economist at the University of British Columbia, stated that 'Europe is in a precarious situation on multiple fronts.' The European Union has historically relied on Russian energy imports but pivoted to other sources following Russia's invasion of Ukraine in 2022.

R.J. Johnston, director of energy and natural resources policy at the University of Calgary's School of Public Policy, noted that 'there's nothing imminent in the short-term that's ready to physically take the oil and gas easily off the East Coast to Europe.' However, swap contracts can secure a stable gas supply from Canada through trading with other companies.

European companies have already signed agreements to buy liquefied natural gas from the Ksi Lisims LNG plant planned for British Columbia's northern coast. Antweiler suggested that a 'reshuffling' of supply could occur: Canada adding to the broader market, freeing up barrels for Europe that meet its stringent environmental standards.

Alberta Premier Danielle Smith and Ontario Premier Doug Ford floated a plan called the Northern Shield Energy Corridor to ship Alberta crude to refineries in Sarnia, Ont., with potential new export paths via the Atlantic. Antweiler said European demand alone won't see this project come to fruition.