As it battles over trade with its big southern neighbor, Canada is looking westward for new markets for its oil.
In the thick of a bitter trade dispute with the United States, the only customer for its crude oil, the Canadian government has opted to buy a pipeline project that will more than double the oil it can send to the West Coast — and then on to new markets in Asia.
While the pipeline project has been moving on its own timeline, the purchase coincidentally comes during one of the thorniest periods in U.S.-Canadian trade relations. Analysts say ironically that should in fact help Canadian Prime Minister Justin Trudeau find some support for the controversial project, which has pit the province of British Columbia against Alberta and has prompted protests across the country.
The construction is slated to begin this summer, but it is opposed by the British Columbia government, local governments, environmental interests and even groups in Washington state. Canada has long sought a pipeline solution, both to the east and west coast, and has so far failed. There is a lot to gain from moving its oil resources outside of North America, including much higher prices and access to the world's fastest growing market.
Trudeau's government late last month announced it would buy Trans Mountain pipeline, its British Columbia terminal and expansion project for about $3.5 billion, after owner Kinder Morgan Canada found the project too risky. Trudeau has said he wants to make sure the pipeline expansion gets built and then sold to a new operator so Canada can send oil on to new customers in Asia.
"We are going to ensure that it gets built so that we can get our resources to new markets," Trudeau told Bloomberg News.