Happy end of summer from the North America team! As the days grow shorter in the Northern Hemisphere, we're quickly entering a new season: Summit and Conference Season.
This week is the first-ever Canada Investment Summit, taking place September 14th and 15th in Toronto. As Canada faces increasing uncertainty with its trade partner to the south, the government is seeking new trade partners and economic diversification. This is a critical discussion for Canada, where the government could double down on oil and gas and invest more public money into fossil fuel infrastructure projects. But the financial rationale just isn't there—not when it comes to expanding pipelines or emerging LNG markets. Growing global demand destruction in the oil market and the failure of Asian markets for LNG to emerge as expected make investing in fossil fuels in Canada a risky proposition that would tie its energy landscape to volatile commodity markets for decades. As Canadians watch the discussions at the investment summit, it's important to remember that the safest, most reliable bet is homegrown renewables.
Later in September is the annual New York Climate Week. This summit will be an important opportunity to connect on the energy issues affecting all of North America. Members of the North America team will be in attendance, and we hope to meet up with you there.
As uncertainty surrounding the Iran crisis and its implications continues to reverberate, a key question for Canada is how the conflict and resulting market volatility could affect LNG and crude trade flows, investment decisions, and long-term exports. At first glance, this shock may appear to open opportunities for the domestic energy sector. In the short term, higher global energy prices could benefit the Canadian fossil fuel sector and government coffers, and make Canadian LNG assets more attractive to investors. But these higher prices are tied to a geopolitical premium, not a structural trend—and increasing output and infrastructure buildouts in response could be risky in the longer term. Relying on price shocks related to geopolitical conflict is precarious, as these conditions are likely to remain volatile and unpredictable. Catch up on our insight from June.
As the owner of Canada's Trans Mountain oil pipeline continues to seek approval, our report from last summer remains relevant. Our report found that construction costs and government financial support have escalated significantly since 2018, when the Canadian government first purchased the financially troubled pipeline. The project benefited from an influx of government funds just last year to pay off its private loans. In total, the Canadian government has provided $35.6 billion in direct funding to the pipeline project, $1.4 billion more than is typically reported. When indirect financial subsidies are considered, total government exposure rises to more than $40 billion. Chances of recouping public funds are slim, and taxpayers could be on the hook.
In late July, it was announced that the Ksi Lisims project is now estimated to cost $30 billion, up from previous estimates of $10 billion to $12 billion. How expensive will this project become? Catch up on the challenges facing this project in our report from June 2025.
As communities across the United States grapple with the buildout of massive power generation and petrochemical projects, water availability concerns are becoming a top- tier issue. Water is already a scarce resource in many areas where these projects are proposed, and the outlook is only for more supply problems. IEEFA analysts Dennis Wamsted and Anika Juhn will discuss nuclear and carbon capture projects in water-strapped Texas, what this means for the communities where they are proposed, and the broader national implications. Register today.
September 29, 2026 at 12:00 pm ET: Texas petrochemical expansion lacks rewards for host cities Promises of better economic conditions and new jobs have failed to materialize in the Texas cities along the Gulf Coast, where a wave of petrochemical expansion has occurred over the last 15 years. Lower median incomes, slower population growth, and slower job growth, coupled with higher per-capita city debt, greater unemployment, and increased poverty characterize petrochemical cities during this period of industry expansion—contrary to industry claims of economic improvement. Join IEEFA as we discuss the findings from our latest report about the petrochemical industry and its effects on local Texas economies, communities, and health. Register today.
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Returning our attention to Canada, our findings show that future supply scenarios and global market conditions challenge the notion that the Alberta West Coast Oil pipeline cannot be justified based on capacity needs. Due to the high projected construction costs, tolls on the pipeline would be much higher than those on existing pipelines. Additionally, existing pipelines and other proposed, lower-cost expansion projects will likely be sufficient to meet forecasted demand. Global oil demand is expected to peak by 2030—well before the pipeline would come into service—and technological advances could accelerate the long-term decline in demand.
At the tail end of August the White House announced what it calledthe biggest oil deal in world history: an agreement to hand over 65 billion barrels of Venezuelan crude reserves—allegedly the second largest private oil reserve position in the world—to a small, unproven Venezuelan company headed by a businessman underactive fraud investigationin Switzerland and Spain. As lousy as the optics may seem, the math is even worse. Read Clark Williams-Derry's post about the shaky ground this deal is based on.
Quotable
“Thailand has significant solar potential, but weak financial incentives and policy uncertainty have constrained rooftop solar deployment. Strengthening the policy framework would allow consumer-led solar adoption to play a greater role in Thailand’s energy transition.”
Haneea Isaad, Energy Finance Specialist, Pakistan, IEEFA
“Among the investments studied, while 40% are in the completed category, 38% are approved or proposed, and 16% active or ongoing. IEEFA’s research over the past three years has pointed to oversupply in the industry, which is witnessing stressed profits. The petrochemical industry is also a proven hard-to-abate sector. Additionally, the current conflict in West Asia has underscored the vulnerabilities of the industry. In this context, MDBs’ continued interest in petrochemicals is high-risk on both financial and climate fronts.”
Swathi Seshadri, Energy Specialist, Petrochemicals, IEEFA South Asia
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