TC Energy CEO on Tariffs, US-Canada Energy Trade, and Oil vs. Natural Gas

Administration's Energy Literacy

• 💡 The current US administration is described as very energy literate, understanding the need for collaboration between Canada, the US, and Mexico.
• 🌍 Energy flows are recognized as ignoring borders, with Canadian natural gas feeding the Pacific Northwest and US gas supplying Canada and Mexico.
• ✅ Tariffs on energy were wisely exempted due to this understanding, acknowledging the interconnectedness of North American energy markets.

Impact of Steel and Aluminum Tariffs

• ⚠️ Tariffs on steel and aluminum are noted as potentially challenging, especially for the auto sector.
• 🚗 Auto parts can cross the border multiple times during manufacturing, creating uncertainty about the actual cost impact of these tariffs.
• 🗣️ Many US CEOs are hesitant to speak out, likely to avoid being in the line of fire.

Message to Washington

• 🤝 The message to Washington from Canadian CEOs is that the US has been a friend for 75 years and remains the number one market for Canadian products.
• 📈 Canadians are anxious to resolve current situations and continue to be friends, fostering mutual benefit and economic growth.
• ⚡ This friendship is crucial for exchanging energy and other products.

Oil Prices and Natural Gas Output

• 🛢️ On the natural gas side, oil and gas prices are largely independent, with an energy equivalent ratio of about 6 to 1.
• 📉 When oil prices are lower (e.g., around $60 WTI), there's less economic incentive to switch from oil to natural gas.
• ⚠️ An exception exists in the Permian Basin, where natural gas is a byproduct of oil production, potentially capping natural gas prices.
• 🌍 Lower oil prices can lead to continued utilization of oil globally, reducing fuel switching to natural gas.