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Incoming U.S. secretary of state Rex TillersonDaniel Kramer

The new Team Trump is being greeted with glee in some quarters of Canada's oil patch.

The CEO of the world's largest publicly traded oil company as secretary of state, the former governor of oil-rich Texas as energy secretary, one of the harshest foes of the Environmental Protection Agency as head of the Environmental Protection Agency – this is the "drill, baby, drill" ethos personified.

Others, outside the Canadian energy sector and even within, will question what the long-term costs will be of a pushback on years of social and environmental progress as well as international co-operation. This is especially true as Canada moves ahead with trying to square the concepts of environmental improvements and increasing energy trade. In the case of energy, two of the world's closest trading partners appear to be on a collision course. Canada could be on the losing end of an export battle with the the United States, which will increasingly become a competitor, in key markets such as China.

Ibbitson: Everything Trump wants to do threatens everything Trudeau wants to do

Related: Rex Tillerson, Trump's likely secretary of state, is a life-long oil man who backs Keystone

Related: Trump picks Exxon's Rex Tillerson for Secretary of State

Yes, TransCanada Corp.'s $8-billion (U.S.) Keystone XL pipeline to the southern United States from Alberta looks to be rising from its deathbed as president-elect Donald Trump pledges to approve it, thumbing his nose at President Barack Obama and his legacy on the climate-change file.

Indeed, Rex Tillerson, the incoming secretary of state, has been vocal in his support for the project. Exxon Mobil, one of Canada's largest oil sands producers, as a stand-alone company and as majority owner of Imperial Oil, will be a beneficiary of the expanded U.S. market for the stuff that Keystone promises.

This makes for discomfort, even if the incoming president proceeds with plans to take decision-making on cross-border pipelines out of the hands of the State Department. It raises more questions about a Trump cabinet populated by business interests, and those close to them, and not the outsiders the candidate had suggested would help him "drain the swamp."

By now though, even Mr. Trump's staunchest supporters will have noticed a gulf between what he had said during the campaign and what is taking shape in a transition process that has been equal parts cabinet selection and reality television, complete with reward and retribution, as contestants scurry back and forth from the Trump Tower elevator bank.

Rick Perry, the former governor of Texas, has accepted the energy secretary post, reports say. He comes into his position having previously vowed to abolish the department altogether. (During his 2012 presidential run, Mr. Perry said in a debate that he would eliminate three departments, including commerce and education. He famously flubbed the moment by forgetting the third one: energy.)

He's certainly pro-oil, but that's not 100 per cent positive for Canada. Indeed, as U.S. production increased because of the shale revolution, Washington lifted a four-decade ban on crude exports. Should U.S. output surge as the regulatory reins get loosened, as Mr. Trump has promised, it will mean more rivalry in the global markets the Canadian oil patch covets.

The Energy Department has already played host to controversy, with the transition team requesting the names of department officials who had attended meetings about the social cost of carbon. According to Reuters, the department refused to comply with the request.

Mr. Trump has called the concept of global warming a hoax aimed at making U.S. industry uncompetitive, despite overwhelming scientific evidence that the problem is real and getting worse. This is just one of many things he's said in contradiction to established facts on everything from crime to voting statistics.

He has doubled down by appointing Scott Pruitt, Oklahoma Attorney-General, as head of the EPA, an agency he has harshly criticized. Indeed, Mr. Pruitt joined with other state attorneys-general in a legal fight against Mr. Obama's climate policies, which include international co-operation under the Paris agreement.

Indeed, many in downtown Calgary will applaud short-term gains to be made under an unabashedly pro-fossil fuel U.S. administration. How its aims are achieved over the long term, however, could make for some uneasy second thoughts.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 23/04/24 4:00pm EDT.

SymbolName% changeLast
IMO-A
Imperial Oil Ltd
+0.1%70.51
IMO-T
Imperial Oil
+0.02%96.51
TRP-N
TC Energy Corp
+0.33%36.03
TRP-T
TC Energy Corp
+0.04%49.21
XOM-N
Exxon Mobil Corp
+0.39%121.03

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