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Canada may impose non-tariff measures on oil exports to US

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Canada considers tariffs on US ethanol amid trade tensions

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Canadian Energy Minister says everything is on the table

(Updates March 11 story with comments from Alberta premier in

paragraphs 6, 7, 8, Enbridge ( ENB ) CEO comments in paragraph 9)

By Jarrett Renshaw and Arathy Somasekhar

HOUSTON, March 11 (Reuters) - Canada could impose

non-tariff measures such as restricting its oil exports to the

United States or levying export duties on products if a trade

dispute with the U.S. escalates further, Canada's energy

minister Jonathan Wilkinson said on Tuesday.

"When we are talking about non-tariff retaliation, it could

be about restricting supply, it could be putting our own export

duties on products. It could be energy and minerals, it could be

broader than that," Wilkinson said in an interview with Reuters.

He also raised the possibility of using non-tariff measures

on critical minerals, which could force the U.S. to rely even

more heavily on China.

"Everything is on the table," he said.

Canada is the top supplier of imported oil to the United

States, providing around 4 million barrels per day mainly to

refineries in the Midwest that are largely engineered to run its

grades.

Any attempts to restrict exports would face resistance from

the province of Alberta, where most of Canada's oil is produced.

"It's not on the table. Zero," said Alberta Premier

Danielle Smith on the sidelines of the CERAWeek conference in

Houston, Texas, on Wednesday.

"Alberta owns the oil and gas and the bulk of it is

coming into the United States. We would never do that to our

friends and allies," she said.

"The temperature has come down a bit, it has de-escalated,"

Smith added, referring to the trade war.

U.S.

President Donald Trump's increased tariffs on steel and

aluminum imports took effect on Wednesday, rising to 25% as

exemptions ended. Canada announced 25% retaliatory tariffs on

those metals along with computers, sports equipment and other

products worth $20 billion in total.

Canada has already imposed tariffs worth a similar

amount on U.S. goods in response to broader tariffs by Trump.

Any restrictions on Canada's oil exports to the United

States would hurt Canadian producers as Canada is limited in its

options to send oil to other markets.

"By and large, you couldn't displace the 4 million barrels

that we send to the United States in pipelines, but I would say

it works on the other side of the bucket too," Wilkinson said,

citing some additional capacity on the Trans Mountain pipeline

and rail as alternatives to move some Canadian oil.

"I actually think the oil coming down here (to the United

States) is pretty sticky and I don't think it's displaceable and

in that regard I don't think the threat to Canada's producers in

the oil sector is as significant as perhaps in other sectors,"

he added.

Restricting oil exports to the United States would be "an

unwise move", said Greg Ebel, CEO of Canadian pipeline operator

Enbridge ( ENB ).

Wilkinson told Reuters that Canada is considering imposing

tariffs on U.S. ethanol as part of a second tranche of trade

penalties if Trump continues to escalate the trade war.

U.S. ethanol, a crucial trade product for U.S. farmers, is

"absolutely on the list of things" that could be included if

Trump, for example, moves forward with plans to impose 25%

tariffs on Canadian goods in April, Wilkinson said.

U.S. ethanol exports to Canada hit record highs in recent

months to help Canada meet its clean fuel program. It is cheaper

than Canadian ethanol, Wilkinson said, due to subsidies in the

U.S. Renewable Fuel Standard.

U.S. farmers sent a record 1.54 million gallons of ethanol

to Canada in September of last year, roughly double the figure

three years prior, according to the U.S. Energy Information

Administration.