Canada-EU Energy Alliance Takes Shape Amid Global Disruptions

Canada and Europe are exploring an energy alliance to bolster European energy security. The Canadian government has discussed strengthening ties with EU leadership, including Prime Minister Mark Carney's recent visit to Strasbourg, France.

The European Union relies heavily on Russian energy imports but pivoted after the invasion of Ukraine in 2022. However, supplies from other regions like the Middle East have been disrupted due to the US and Israel's war against Iran. The US is also a significant exporter of liquefied natural gas (LNG) to Europe, but President Donald Trump has caused global trade uncertainty.

Canada's pipeline and port infrastructure allow for oil and gas exports to Asia, but not yet to Europe. A 'swap contract' allows European companies to secure stable gas supplies from Canada by trading cargo on the Pacific with another destination on the Atlantic.

A recent agreement between two German companies will buy LNG from a new plant in northern British Columbia. Experts suggest that Canada can add to global energy supply, freeing up barrels for Europe that meet its stringent environmental standards. However, building infrastructure to connect East Coast refineries to European markets is a long-term project and may not be feasible.

Alberta Premier Danielle Smith and Ontario Premier Doug Ford proposed the Northern Shield Energy Corridor to ship Alberta crude to Sarnia, Ont., but experts say it won't be driven by European demand alone. Asia remains a more promising market for Canada's oil and gas exports.