Tariffs and 'drill, baby, drill' — What Trump 2.0 could mean for Alberta's energy sector

With Donald Trump set to become the next president of the United States, some market watchers are feeling uneasy about what the Republican leader's "America First," protectionist trade policies will do to Alberta's economy.

Among the most concerning policies is Trump's proposed worldwide minimum 10 per cent tariff on imported goods and the potential implications for Alberta's energy sector.

In Trump's victory speech, the former president vowed to "govern by a simple motto: Promises made, promises kept." 

It's something Al Salazar, head of macro oil and gas research at Enverus Intelligence Research, says will keep oil market forecasters on their toes for the next four years. 

"The one thing that's the big cloud that's hanging over in terms of uncertainty is Trump's proposed tax on all imports, anything between 10 to 20 per cent," said Salazar, who is also the Calgary Eyeopener energy columnist.

"It kind of doesn't make sense to tax crude imports into the U.S. because that's going to push up gasoline prices and be inflationary for U.S. citizens. But on the other hand … in terms of supply chain, that is really concerning."

Salazar believes anything that could tilt a trade advantage toward the U.S. is something that warrants concern in the Canadian energy sector. 

"In a way, this election is all about change, and certainly we've got change coming."

Virtually all of Canada's crude oil was exported to the United States last year, with 87 per cent — or 3.3 million barrels per day — of that oil coming from Alberta, according to data from the Canadian Energy Regulator. 

This year's completion of the Trans Mountain pipeline expansion from Alberta to the West Coast has improved Canada's access to Asian markets, but much of the oil unloaded from the pipeline is being shipped by tanker to California.

With Alberta being the largest crude producer in the country, some say this new era of Trump could mean the province's economy is particularly exposed to what's going on in the States. Trump also promised during his campaign that it would be "drill, baby, drill" on Day 1 of his presidency. 

"At this point, we're quite concerned about what the potential impacts to Canada and to Alberta, specifically, could be, knowing that we're very trade exposed," said Ruhee Ismail-Teja, vice-president of policy and external affairs for the Calgary Chamber of Commerce.

"In fact, $3.6 billion every day crosses between the Canada-U.S. border, so any change in government will have massive implications for the Canadian economy."

With the presidential election still resonating across the globe, Ismail-Teja says it's challenging to predict how a second Trump term could be felt in Alberta, as how these proposals would look in practice isn't exactly clear yet.