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Canada–U.S. energy relations

Canadians and Americans share the closest energy relationship in the world. Canada is the leading and most secure, reliable, and competitive energy supplier to the United States, including crude oil and refined petroleum products, natural gas, electricity, coal and uranium. Canada also imports a significant amount of energy from the US, particularly electricity and natural gas.

In 2011, Canada’s energy exports were valued at US$120 billion (CAN$119 billion), with virtually all (90%) of it going to the US. In addition, Canada:

  • Exported 2.7 million barrels per day of crude oil and refined products to the U.S., representing 24% of total U.S. petroleum imports;
  • Supplied approximately 20% of the uranium used in U.S. nuclear power plants;
  • Provided 90% of all U.S. natural gas imports, representing 13% of U.S. consumption; and
  • Imported $55.6 billion (CAN$55 billion) of energy products, of which US$(CAN$18 billion) (33%) was from the US. Canadian natural gas imports, which now stand at almost 3 billion cubic feet per day, have tripled approximately since 2006. With the exception of very small amounts of natural gas imports, Canada purchases most of its natural gas from the US.

Like natural gas, there is significant two-way trade in electricity between Canada and the US. The Canada and US electricity grid is deeply integrated with more than 30 major transmission interties connecting all Canadian provinces to neighbouring US states, except Nova Scotia, PEI, and Newfoundland.

The immense energy relationship is further supported by a highly integrated pipeline system that supports energy security on both sides of the border. 

Oil

Canada: the largest oil supplier to the United States

Canada is the world’s 6th largest oil producer. In 2011, Canada’s total oil production was 3 million barrels a day; output is expected to rise further with increased development of oil sands.

Canada’s oil reserves represent a safe, secure and long-term energy supply for North America.

Canada has the world’s third-largest proven reserves (after Saudi Arabia and Venezuela) at 172.8 billion barrels, 168.7 billion of which are in the oil sands. As technology evolves, oil sands reserves could grow even larger, up to an estimated 315 billion barrels. Beyond the oil sands, petroleum development is also taking place in several other parts of Canada, including the north and the Atlantic offshore region.

Canadian oil is a major contributor to U.S. energy security by helping to eliminate dependence on foreign oil. A 2011 study commissioned by the U.S. Department of Energy shows that higher oil imports from Canada, almost all of which would come from the oil sands, could help to eliminate U.S. dependence on imports from foreign suppliers such as Venezuela and the Middle East by 2030.

Canada’s stable economic and political environment attracts businesses from around the world. The oil sands represent significant business opportunities for Canadians and Americans. U.S. firms are significant investors, producers and developers of new technology in Canada’s oil sector. In the oil sands alone, close to 1,000 U.S. companies of all sizes, from almost every state, and from all sectors of the economy, including engineering, high-tech, and financial services, directly supply goods and services to companies producing oil in Canada.

In fact, between 2010 and 2035, oil sands development is anticipated to support, on average, an estimated 93,000 jobs per year in the U.S. With increased pipeline capacity, this could grow to, on average, 160,000 jobs per year. Oil sands development is also anticipated to contribute, on average, US$8.5 billion (CAN$8.4 billion) per year to the U.S. gross domestic product over the same time period, and US$14.6 billion (CAN$14.4 billion) with increased pipeline capacity.

Finally, Canada’s regulatory framework is among the most stringent in the world. Projects are subject to rigorous environmental and regulatory review, and the federal and provincial governments require extensive environmental monitoring and reporting throughout the life of each project.

Environmental Monitoring in the Oil Sands Region

Oil sands represent a growing share of Canadian oil production, with approximately 1.6 million barrels per day produced currently and over 3 million barrels per day projected by 2020.

The oil sands are a strategic natural resource for Canada, and a key driver of economic development. Like all energy development, oil sands production has an environmental impact. According to a recent study, the average oil sands import to the United States has well-to-wheels life-cycle greenhouse gas emissions about 6% higher than the average crude refined in the United States.[1]

The oil sands industry has been reducing its per-unit emissions, and in 2010 GHG intensity per barrel was 26% lower than in 1990.[2] Further reductions are expected through more stringent regulatory standards.

The expansion of oil sands development has led to the need for a better understanding of the potential cumulative environmental effects. The Government of Canada and the Government of Alberta are working together on a phased and adaptive approach to monitoring to ensure that this important resource is developed in an environmentally responsible way.

In February 2012, the two governments released a joint plan that will strengthen environmental monitoring programs for air, water, land and biodiversity in the oil sands region. It will result in improved knowledge of the state of the environment in the oil sands area and an enhanced understanding of cumulative effects and environmental change, including future impacts arising from multiple stressors, which will become more important to understand as development continues.

Monitoring enhancements are already underway and will continue to be phased in over the next three years to ensure installation of necessary infrastructure, incremental enhancement of activities and appropriate integration with existing monitoring activities in the region.

The three-year implementation plan begins in spring 2012 with increased sampling frequency, parameters, and locations. It will also integrate relevant parts of existing monitoring efforts and will give government and industry the scientific foundation necessary to continue to promote the environmentally sustainable development of the oil sands.

For a detailed account of each of the elements of the implementation plan, please consult the full Joint Canada-Alberta Implementation Plan for the Oil Sands.

For further information on Environment Canada's involvement in improving the environmental monitoring in the oil sands region

More information on oil sands:

[1] CERA Report (2010), Oil Sands, Greenhouse Gases, and US Oil Supply

[2] National Inventory Report 1990-2010: Greenhouse Gas Sources and Sinks in Canada (released in 2012 – see page 9).

Natural Gas

Canada: the largest natural gas supplier to the United States

Canada is the third-largest natural gas producer in the world, producing 5.4 trillion cubic feet per year, and the world’s third-largest exporter of natural gas.

In 2011, Canada provided 90% of all U.S. natural gas imports, representing 13% of U.S. consumption. Canadian exports of natural gas go primarily to the U.S. Northeast, Midwest, Rocky Mountains, California and Pacific Northwest.

Canadian Natural Gas Facts - 2011

  • 14.0 billion cubic feet/day — total production
  • 8.7 billion cubic feet/day — total exports
  • 70.0 trillion cubic feet — total proved reserves

Canada is continually investing in natural gas exploration and infrastructure.

Current estimates suggest Canada’s marketable natural gas resource ranges between 733 and 1304 trillion cubic feet, representing well over one hundred years of domestic production at current rates.

Shale gas innovative technology is expanding Canadian production. Liquefied natural gas export terminals are being developed to reach overseas markets. Canadian interest in shale gas production is growing quickly, particularly in the Horn River and Montney Basins in northeast British Columbia.

Free trade and open markets, as well as a stable policy and regulatory environment, encourage natural gas investments and strengthen North American energy security.

Electricity

Canada: the largest electricity supplier to the United States

Canada is one of the world’s largest producers of hydroelectricity. As the largest source of renewable power in North America, hydroelectricity accounts for about 60% of Canada’s total electricity generation, representing over three times the global average.

In fact, over 3/4 of Canada’s electricity comes from sources that do not emit greenhouse gases. Clean Canadian electricity represents a reliable source of power and is a key element in ensuring long-term North American energy security and maintaining our collective efforts to reduce greenhouse gas emissions.

The portion of Canada’s electricity generated by coal—which totaled 12.6% in 2010—has been decreasing over the last few years. Emissions from the electricity generating sector will continue to fall over the coming years as new emission regulations for power generating facilities will require power plants to meet more stringent emissions standards.

Renewable and Clean Sources of Energy

Canada is committed to making its energy production cleaner by increasing energy efficiency, expanding renewable energy production and reducing environmental impacts from conventional sources.

Over 75% of Canada’s electricity generation is non-greenhouse (GHG) emitting.

The Government of Canada has invested almost US$2 billion (CAN$2 billion) to increase Canada’s energy supplies from renewable sources such as solar, tidal, hydro, wind, and biomass. These initiatives have supported approximately 5,400 megawatts of renewable power generating capacity.

Hydroelectricity

Hydroelectric power, a clean, renewable source, accounts for 95% of Canada's renewable electricity generation and nearly 11% of the global production of hydropower.

Canada is one of the world’s largest producers of hydroelectric power with an installed capacity of over 75,000 megawatts (MW), and an annual average production of about 350 terawatt-hours (TWh). Canada has the potential to increase hydroelectric power production if the demand were to increase in the future.

In 2010, hydroelectric power accounted for about 60% of Canada’s electricity generation, and was a significant component of Canada’s electricity exports to the United States.

Wind Power

Canada is now the ninth largest producer of wind energy in the world with current installed capacity at 5,265 MW. Since 1997, Canada's wind installed capacity has grown at an annual average growth rate of around 55%.

Solar Power

Solar energy production is growing in Canada. In 2011, total installed photovoltaic capacity in Canada was 495 MW; the annual growth rate over the 2008-2011 period was record high at 147%. Solar thermal capacity was growing 9.5% annually from 2000, reaching 819 MW of thermal power in 2011.

Bioenergy

Canada has vast renewable biomass resources and is able to use these resources to supply clean energy and materials. In 2010, about 8.3 TWh were produced from this resource, which represented more than 2% of renewable energy.

The Canadian renewable fuels industry has invested US$2.3 billion (CAN$2.3 billion) towards the construction of new production facilities across the country, generating almost 2 billion litres per year of domestic production capacity.

Canada requires 5% renewable content in gasoline and 2% renewable content in diesel fuel and heating oil.

Hydrogen and Fuel Cells

Canada is collaborating with the US on the development of codes and standards related to hydrogen and fuel cells.

Several joint hydrogen R&D projects are underway under a joint Canada-US partnership.

Canada and the US both participate in the International Partnership for Hydrogen and Fuel Cells in the Economy, which provides a mechanism to organize, coordinate, and implement effective, efficient, and focused international research, development, demonstration and commercial utilization activities related to hydrogen and fuel cells.

Nuclear Power

Nuclear energy has been safely deployed for several decades in Canada and is currently providing about 15% of Canada’s electricity needs in a safe, reliable and sustainable way. More than 50% of Ontario’s electricity is provided by nuclear energy, while historically nuclear energy represents approximately 3% and 30% of the electricity generating capacity in Quebec and New Brunswick.

Refurbishment projects in New Brunswick (Point Lepreau) and Ontario (Bruce A units 1 and 2) are nearing completion and the regulatory process for the construction of a new nuclear power plant in Ontario (Darlington New Nuclear Project) is progressing well.

Canada has the world’s largest known high-grade uranium deposits and was the world’s second leading producer of uranium in 2011, accounting for approximately 17% of the total global mine production (World Nuclear Association).

Canada supplies a significant part of the U.S. total yearly consumption of uranium by U.S. nuclear utilities. In the past, Canada has provided up to 1/3 of the U.S. yearly consumption but this fraction in some years can be lower due to an increase of uranium purchased elsewhere, for instance, from Kazakhstan, Namibia, and domestic resources.

Nuclear energy is a safe, reliable, economic and clean energy source

Canada is making progress towards implementing a safe and secure plan, known as the adaptive phased management approach, for the long-term management of nuclear fuel waste that is generated in Canada – past, present and future. The Nuclear Waste Management Organization (NWMO), established by the nuclear utilities pursuant to the 2002 Nuclear Fuel Waste Act, is responsible for implementing the plan with federal oversight.

For information about the NWMO and its progress towards implementing the plan for managing nuclear fuel waste over the long term, refer to the NWMO’s website at www.nwmo.ca .

Canada abides by the Nuclear Non-Proliferation Treaty’s principles of nuclear disarmament, non-proliferation and the peaceful use of nuclear energy.

Immediately following the Fukushima nuclear accident in March 2011, the Canadian Nuclear Safety Commission (CNSC) established an internal task force to assess whether lessons learned could be applied to Canadian nuclear facilities and launched a national review of nuclear facilities. In its October 2011 report, the task force found that, overall, Canadian nuclear power plants are safe and confirmed their ability to withstand external events, such as large earthquakes and floods. The report also identified areas where safety enhancements could be made.

In response to recommendations in the task force report, as well as incorporating the findings and recommendations from the International Atomic Energy Agency (IAEA) Integrated Regulatory Review Service Report and the CNSC President’s External Advisory Committee Report, the CNSC created a comprehensive Action Plan to apply the lessons learned to the safe operation of Canada’s nuclear power plants. The CNSC sought two rounds of public comments on the CNSC Fukushima Task Force Report and the draft CNSC Staff Action Plan before presenting its revised Action Plan to the Commission Tribunal for its consideration at a public meeting on May 3rd, 2012. Next steps for the CNSC include revising its Action Plan based on the feedback received from Commission members and providing regular updates on the implementation of the plan to the Commission at future public meetings.

In responding to the lessons learned from the Fukushima nuclear accident, Canada’s nuclear power plant operators have demonstrated their continued commitment to safety and have taken immediate action to confirm the robustness of their nuclear power plants.

Internationally, Canada has been an active participant in the development of the IAEA nuclear safety action plan, and will continue to participate in international efforts to strengthen nuclear safety.

Technology and Innovation

Canada is making investments in technology and innovation to increase energy efficiency and improve environmental performance. The Government of Canada manages the Program of Energy Research and Development (PERD), the Clean Energy Fund, and the ecoENERGY Innovation Initiative. Current priorities for energy research and development and demonstration include:

  • Oil and Gas
  • Clean Electric Power Generation
  • Clean Transportation Energy
  • Clean Energy Systems for Buildings and Communities
  • Clean Energy Systems for Industry
  • Sustainable Bioenergy

CanmetENERGY is the Canadian leader in clean energy research and technology development. With over 450 scientists, engineers and technicians and more than 100 years of experience, it is Canada’s knowledge center for scientific expertise on clean energy technologies. CanmetENERGY works with industry, academia, utilities, associations, non-governmental organizations, and other governments to research, develop, and demonstrate energy-efficient, alternative and renewable energy technologies, fuels and processes.

CanmetENERGY has recently supported a number of important research and development projects, including:

  • The Drake Landing Project, which is the first large-scale seasonal solar energy storage system in North America. It has successfully combined energy efficiency, solar energy, central district heating systems and solar energy storage technologies to provide 90 percent of the space heating requirements for a neighbourhood of 52 homes, thereby reducing greenhouse gas emissions by five tonnes per home, per year.
  • RETScreen Clean Energy Project Analysis Software, which is the world’s leading clean energy decision-making software. Developed by Natural Resources Canada, in collaboration with key partners such as the US National Aeronautics and Space Administration, RETScreen has helped significantly reduce costs associated with identifying and assessing potential energy projects.
  • Technology to reduce the oil sands’ environmental footprint. Working with industry and the Government of Alberta, Natural Resources Canada has developed innovative technology to improve efficiencies and reduce the environmental impacts associated with oil sands production. For example, CanmetENERGY and its partners have worked collaboratively to develop technologies to reclaim tailings ponds as well as innovative froth treatments to upgrade bitumen without creating waste by-products. The new froth treatment process, which improves energy efficiency by 10 percent, will reduce in a reduction of approximately 40,000 tonnes of GHG emissions per year and use 10 percent less water.

Additional details about Canada's involvement in the clean energy sector as well as the contact information for clean energy companies listed in the technology directory can be found in the clean energy portal: www.cleanenergy.gc.ca.

Clean Energy Dialogue

The Clean Energy Dialogue (CED) was established between Canada and the United States in February 2009 to enhance joint collaboration on the development of clean energy science and technologies to reduce greenhouse gases and combat climate change.

This Dialogue is an important initiative in support of our ongoing efforts towards building a low-carbon economy. Canada and the United States are both taking steps to combat climate change domestically, and these efforts will be reinforced by the joint actions of our two countries under the Clean Energy Dialogue.

Under the Dialogue, working groups composed of U.S. and Canadian government officials collaborate in areas identified in Action Plans.

For more information on the current focal areas and initiatives underway please visit the Clean Energy Dialogue website on the Government of Canada’s climate change portal.

Links for further information

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Date Modified:
2013-01-24