Alberta Eyes Japan Refining Deal: A Turning Point for Canada’s Energy Future
Canada has long been blessed with immense natural resources, and few are as central to our economy as the oil sands of Alberta. For decades, however, Canada’s crude oil exports have been overwhelmingly dependent on one market: the United States. Roughly 90% of our oil exports, or about four million barrels a day, flow south through north-south pipelines to American refineries. While this arrangement has offered Canada stability, it has also tied our economic fortunes far too tightly to the policies, politics, and interests of our southern neighbour.
That is why recent reports that Alberta is in early talks with Japanese refiners about a potential joint investment in refining infrastructure overseas should be seen as a moment of enormous promise. If struck, this deal could mark a fundamental shift in how Canada positions itself in the global energy market — and could serve as the spark for deeper, more resilient trade partnerships with allies beyond the United States.
According to sources close to the matter, Alberta’s government is exploring a joint venture with Japanese crude oil refiners to co-fund the construction of a coker unit. This specialized equipment would allow Japanese refineries to process Alberta’s heavy, high-sulfur crude — oil that is currently incompatible with most of Japan’s refining infrastructure. For Alberta, it opens the door to a vast new market; for Japan, it reduces reliance on Middle Eastern oil and provides direct access to Canadian supply across the Pacific Ocean.
The discussions are still in very early stages, and no agreement has been finalized. But even the prospect of Alberta directly investing in foreign energy infrastructure is unprecedented. It signals not only the province’s determination to diversify its markets, but also its willingness to think strategically about building long-term international partnerships.
Japan is the world’s third-largest economy, yet it has almost no domestic oil production. The country relies heavily on imports from the Middle East, with most shipments passing through the geopolitically tense South China Sea. A supply disruption there could have devastating effects on Japan’s energy security.
By deepening ties with Alberta, Japan gains a secure, democratic, and geographically accessible supplier. Crude oil shipped across the Pacific from Canada to Japan would not be vulnerable to the same chokepoints that threaten Middle Eastern flows. For Japan, investing in refining capacity that can handle Canadian crude is a way to future-proof its energy mix.
For Alberta, meanwhile, Japan represents a reliable partner in Asia — a wealthy, industrialized democracy that shares Canada’s values and commitment to stable trade. Unlike China, which has also bought Canadian crude since the expansion of the Trans Mountain pipeline, Japan is a trusted ally that Canada can confidently build lasting energy ties with.
This potential deal would not even be possible without last year’s expansion of the Trans Mountain pipeline. That project tripled capacity to 890,000 barrels per day, finally giving Alberta greater access to tidewater ports and Asian markets. Since then, Canadian crude has begun to flow not only to China but also to South Korea, India, and, on a smaller scale, Japan.
Japan’s Eneos Holdings, for example, purchased a 250,000-barrel cargo last year and a 550,000-barrel shipment earlier this year. These are small steps, but they signal growing interest. Alberta knows that with the right infrastructure in Japan, these occasional purchases could turn into steady, large-scale exports.
The Alberta government has also been lobbying for the construction of a new crude oil export pipeline to Canada’s northwest coast, which would further expand export capacity to Asia. A firm partnership with Japan could provide the political and economic momentum needed to move such projects forward.
It is no secret that the United States, under the leadership of President Trump, has become an unreliable partner for Canada. Trade disputes, protectionist policies, and an unpredictable White House have made it clear that Canada cannot afford to rest its economic future solely on U.S. markets.
This is why striking deals with countries like Japan, South Korea, Australia, New Zealand, and our allies in Western and Central Europe is so critical. These nations are stable democracies with shared values and shared interests in building secure, reliable trade networks. For Canada, broadening our economic partnerships is not just smart policy — it is a matter of national security.
Canada is facing a financial rut, with sluggish growth, high levels of public debt, and mounting cost-of-living pressures. Our energy sector, and in particular the oil sands of Alberta, represents one of the strongest levers we have to turn things around.
By leveraging our abundance of crude oil and ensuring it reaches global markets, Canada can drive job creation, generate government revenues, and reassert its place as a leading energy supplier. Partnering with Japan on refining infrastructure would show the world that Canada is not just a resource exporter, but also a strategic player in shaping the global energy landscape.
The Alberta-Japan talks are still preliminary, but the spirit behind them is exactly what Canada needs. It is a forward-looking strategy that builds resilience, strengthens alliances, and maximizes the value of our natural resources.