NEW YORK (AP) — The U.S. increasingly relies on Canadian crude oil to meet domestic demand and that relationship faces potential strain amid the threat of tariffs from President-elect Donald Trump.
More than 50% of crude oil imported to the U.S. comes from Canada, up from 33% in 2013. The increase follows a jump in production from Canada’s western provinces and growing pipeline capacity to its southern neighbor. Another roughly 10% of imports come from Mexico.
Trump has threatened blanket tariffs of up to 25% on products from both Canada and Mexico. That has raised concerns about higher energy costs trickling through the entire U.S. economy, making gasoline and other petroleum products more expensive and reigniting inflation.
“All three countries remain heavily reliant on each other economically, and hefty taxes on key U.S. imports like crude oil or softwood lumber risk exacerbating U.S. consumer inflation,” said a report led by Solita Marcelli, chief investment officer of the Americas for UBS Financial Services.
Canadian officials say they’re studying how they would respond if Trump follows through on his threat. The leader of Ontario, Canada's most populous province, has suggested barring imports of American-made alcohol and restricting energy exports. But the head of oil-rich Alberta has ruled out cutting off oil exports and hopes to find a solution.
Canada, with its proximity to the U.S., is also the nation’s biggest trading partner. Nearly all of Canada’s oil is exported to the U.S.
Canadian oil makes up the majority of overall oil imports in the U.S., despite the nation’s own oil boom over the last decade. That boom has made the U.S. the world's biggest producer of crude oil and a net exporter. But a mix of chemistry and infrastructure, along with geography and prices, means the U.S. still has to import a significant amount of oil to meet demand.
The U.S. produces mostly light, sweet crude, which is easier to refine than heavier crude oil, like the kind that Canada mostly produces. But refining infrastructure in the U.S. is geared toward heavier crude oil because of a history of having to import that type. Heavier crude is less expensive to purchase because it is tougher to refine.
Oil prices have been mostly stable throughout 2024 and the OPEC cartel has been limiting production amid weaker global demand. Energy commodities have been broadly falling throughout the year, helping to ease the rate of inflation.
Fuel oil costs eased 19.5% in November from a year prior, contributing to an overall decline in energy commodity costs of 8.5%, according to the U.S. government' latest report on consumer prices. Gasoline prices have also fallen from a year ago.
Tariffs on energy would likely trickle down to consumers through products made from the refining of oil. The most obvious impact would likely be at the gas pump and higher gasoline prices tend to fuel broader inflation.
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FILE - Pumpjacks draw out oil and gas from well heads as wildfire smoke hangs in the air near Calgary, Alberta, May 12, 2024. (Jeff McIntosh/The Canadian Press via AP, File)
WASHINGTON (AP) — President Joe Biden is pledging to cut U.S. greenhouse gas emissions by more than 60% by 2035 as he fights to ensure his legacy on slowing global warming, even as President-elect Donald Trump vows to undo much of Biden's climate work when he takes office next month.
Biden said the new goal — which supersedes a previous plan to cut carbon emissions at least in half by 2030 — keeps the United States on track to achieve net-zero greenhouse gas emissions economy-wide by 2050. The U.S. is making a formal submission of the new target, known as a Nationally Determined Contribution, to the United Nations under terms of the 2015 Paris climate agreement, Biden said Thursday.
The new goal calls for reducing net emissions by 61% to 66% below 2005 levels in 2035.
“I’m proud that my administration is carrying out the boldest climate agenda in American history,'' Biden said in a videotaped statement.
“We’re doing it by setting ambitious goals'' such as deploying 30 gigawatts of offshore wind and conserving at least 30% of U.S. lands and waters by 2030, Biden said. His administration also has set strict new standards to cut air pollution from cars, trucks and power plants and signed into law the most significant investments in climate and clean energy in U.S. history, he said.
The action by the Democratic president comes just over a month before he is set to leave office. Trump has already promised to unleash a series of executive actions that will seek to undo most or all of Biden's climate agenda as the Republican president-elect pushes for “energy dominance” around the globe.
Trump no longer dismisses climate change as a “hoax” but has pledged to dismantle what he calls Democrats’ “green new scam” in favor of boosting production of fossil fuels such as oil, natural gas and coal, the main causes of climate change. Trump is expected to withdraw the United States from the Paris climate accord, as he did during his first term, and will likely move to repeal parts of the landmark Inflation Reduction Act, especially subsidies that benefit electric vehicles and offshore wind.
Biden aides tried to downplay the impact of Trump's return to the White House, insisting that states and local governments can continue to lead on clean energy.
“American climate leadership is determined by so much more than whoever sits in the Oval Office,'' said John Podesta, Biden's senior adviser for international climate policy.
Climate leadership “happens on the ground in our cities and states, from Phoenix to Pittsburgh, from Boise to Baltimore,'' Podesta told reporters Wednesday. “And I believe that with this new 2035 target as their North Star, leaders across America can show the world that we are still in this fight for a better future."
The U.S. Climate Alliance, a bipartisan coalition of governors that support climate action, applauded the new target and pledged to work toward it, with or without help from the White House.
New York Gov. Kathy Hochul, the alliance's co-chair, said climate-conscious governors “will carry the torch forward'' after Biden leaves office. Hochul, a Democrat, said governors will use the new U.S. goal to “keep America on track toward a cleaner, safer future.”
“By continuing to stamp out climate pollution together, we’re safeguarding public health, protecting the environment, growing the economy and creating good jobs across the U.S,” said New Mexico Gov. Michelle Lujan Grisham, another alliance co-chair.
Biden, in his remarks, called the new goal “ambitious” and said it would lead to thousands of well-paying jobs, more affordable energy, cleaner air, cleaner water and a healthier environment for all Americans.
“It is also creating real momentum because we’re unleashing American ingenuity and innovation. And together, we will turn this existential threat into a once-in-a-generation opportunity to transform our nation'' for decades to come, Biden said. “I know we can do this.''
The proposal would require sustained changes across the economy, from power generation to transportation, buildings, agriculture and industry, including significant increases in renewable energy such as wind and solar power and steep cuts in emissions from fossil fuels such as oil and coal.
The U.S. pledge includes methane reductions of at least 35% from 2005 levels by 2035, Biden said. Cutting methane emissions is among the fastest ways to reduce near-term warming and is crucial to reducing greenhouse gas emissions.
Debbie Weyl, U.S. acting director of the World Resources Institute, a global research organization, said the new emissions target is “at the lower bound of what the science demands," but said it was “close to the upper bound of what is realistic if nearly every available policy lever were pulled" in the next decade.
“Assertive action by states and cities will be essential to achieving this goal,'' she said, adding that the United States needs to swiftly expand renewable energy and electric vehicles, modernize the electric grid and decarbonize heavy industry.
The nonbinding but symbolically important pledge is a key part of the Paris agreement, which calls for countries to submit so-called Nationally Determined Contributions every five years. A country’s NDC, or climate goal, outlines how it plans to reduce greenhouse gas emissions to help meet the global goal of limiting temperature rise to 1.5 degrees Celsius since pre-industrial times.
The Paris Agreement requires that NDCs are updated every five years with increasingly higher ambition, taking into consideration each country’s capacity. The next deadline is February 2025, although Brazil, the United Kingdom and the United Arab Emirates have already submitted their proposed NDCs.
“As the world’s largest producer of oil, the largest producer and exporter of fossil gas — and the largest historical climate polluter — the United States has an outsized responsibility to press forward in the climate fight no matter the political headwinds,'' said Manish Bapna, president and CEO of the Natural Resources Defense Council, a leading environmental group.
He called the new climate goal a clear signal for governors, mayors and CEOs who support climate action to “step up" and defend climate progress.
“While the incoming administration has vowed to turn its back on the world — again — the majority of Americans want climate action, and the clean energy boom is unstoppable," Bapna said.
Associated Press writer Seth Borenstein contributed to this report.
FILE - President Joe Biden meets with President-elect Donald Trump in the Oval Office of the White House, Wednesday, Nov. 13, 2024, in Washington. (AP Photo/Evan Vucci, File)
President Joe Biden speaks during a Hanukkah reception in the East Room of the White House in Washington, Monday, Dec. 16, 2024. (AP Photo/Rod Lamkey, Jr.)
FILE - President Joe Biden speaks during a Hanukkah reception in the East Room of the White House in Washington, Dec. 16, 2024. (AP Photo/Rod Lamkey, Jr., File)
