Canada's Empty Threats: Why Building a Strategic Energy Reserve Matters

Ontario Premier Doug Ford's suggestion to use Canada's oil and gas as leverage in trade negotiations with the US has been met with skepticism by Alberta Premier Danielle Smith, who argues that cutting off energy exports would harm Canadians and escalate an already strained relationship.

However, David Knight Legg suggests that a more strategic approach could be taken by building a national strategic energy reserve. This would allow Canada to combine its vast oil resources with Ontario's industrial capacity to produce world-leading energy security and economic resilience.

Legg notes that Canada is the only G7 nation without a strategic energy reserve, which would give it a storage buffer to turn energy into national strength. He points out that the US stores hundreds of millions of barrels in Gulf Coast salt caverns, while Japan, Germany, France, and others hold stockpiles equal to 90 days or more of imports.

A strategic energy reserve would not only provide Canada with a tool for rapid response when allies face disruption but also cushion manufacturers, refiners, and consumers against price and supply shocks. Legg suggests that the right geology already exists in Sarnia-Lambton, next to its industrial heartland, where dozens of salt caverns have stored hydrocarbons and liquefied petrochemicals safely for decades.