Alberta Looks to Japan for Energy Trade

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Facing trade disruptions from the threat of tariffs from the U.S. government, Alberta said it signed a preliminary deal with a Japanese company to explore its options for energy and other materials.

Calling himself "tariff man" during his first term in office, U.S. President Donald Trump has not held back during his return to the White House. Tacitly tearing up his own free trade deals, Trump has threatened steep tariffs on Mexico, Canada and Europe. A 25% tariff on steel and aluminum went into force on Wednesday, and Trump threatened to double that in response to tariffs on electricity from Ontario.

Alberta Premier Danielle Smith led a delegation to the CERAWeek energy conference underway in Houston. On the sidelines, she signed a memorandum of understanding on energy and other goods with Ichiro Takahara, the chairman and chief executive officer at the Japan Organization for Metals and Energy Security (JOGMEC) (Tokyo, Japan).

Smith's office said the memorandum covers everything from oil and natural gas, to carbon capture, utilization and storage (CCUS). The Japanese company, she said, is one of the more durable trading partners with Alberta, playing a role in energy sector investments.

"Through this agreement, Alberta looks forward to building on our long history of friendship to advance our mutual priorities and work together to secure Alberta and Japan's energy future," Smith said in a statement Tuesday.

On conventional energy, Alberta is the Canadian leader in crude oil and natural gas production, though export options are largely limited to North America. An expansion to the Trans Mountain crude oil pipeline to the western Canadian coast and various terminals that will export liquefied natural gas gives it other options, however.

Japan, for its part, lacks domestic natural resources and is heavily dependent on foreign suppliers for energy.

"The province of Alberta is rich in natural resources, particularly in oil and natural gas resources, and is expected to have great potential for hydrogen and ammonia production," Takahara said.

Bilateral trade between Alberta and Japan is valued at more than US$2 billion. Alberta said energy exports accounted for about US$700 million of that.

Apart from conventional energy, Alberta has put its energy transition on display. The Canadian Association of Petroleum Producers (CAPP), which has headquarters in Alberta, said emissions from oil and gas are down about 2% over the 10-year period ending in 2021, while production on an oil-equivalent basis grew by 37% over the same period.

Elsewhere, provincial data show Alberta plans to invest around $1 billion over the next 15 years to develop two large-scale carbon capture and storage (CCS) facilities, the Alberta Carbon Trunk Line and the Quest Project.

Japan's economy, meanwhile, is one of the largest in the world, though growth has been sluggish. The Daiwa Institute of Research, a Japanese think tank, said it expects the Japanese economy to expand by 1.5% in 2025, but slow to 1.1% by next year. Expansion clocked in at 0.7% during the fourth quarter.

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