By Natalie Kempkey and ShaMyra Sylvester
This article was published by the US Energy Information Administration on June 5, 2020.
Canada is the largest source of US energy imports and the second-largest destination for US energy exports behind only Mexico. Energy is an important component of trade between Canada and the United States.
In 2019, based on the latest annual Standard International Trade Classification (SITC) data from the U.S. Census Bureau, energy accounted for US $85 billion, or 27 per cent, of the value of all US imports from Canada. Crude oil and petroleum products accounted for 91 per cent of the value of US energy imports from Canada and 89 per cent of the value of US energy exports to Canada.
The United States exported US $23 billion worth of crude oil, petroleum products, natural gas, and electricity to Canada in 2019, about 8 per cent of the value of all US exports to Canada and the second-highest level recorded after peaking in 2014.
US crude oil imports from Canada accounted for 56 per cent of all crude oil imports to the United States in 2019, averaging 3.8 million barrels per day (b/d)—up from 3.7 million b/d in 2018. In 2019, the United States exported 459,000 b/d of crude oil to Canada, which remained the largest destination for US crude oil exports.
US crude oil exports to Canada are typically light, sweet grades that are shipped to the eastern part of the country. US crude oil imports from Canada tend to be heavy and are sourced from oil sands in Alberta (Western Canada), and most of these exports flow to US Midwest refineries.
Crude oil trade by rail has become more attractive because pipeline capacity in Canada has at times been insufficient to accommodate Canada’s growing crude oil production. Consequently, US imports of Canada’s crude oil by rail have more than tripled from an average of 91,000 b/d in 2016 to an average of 300,000 b/d in 2019. More than half of the crude oil volume imported by rail (171,000 b/d) went to the US Gulf Coast region.
Petroleum product trade between the United States and Canada is relatively balanced in both volume and value. Canada is the largest source of US petroleum and refined products imports. In 2019, the United States imported a record 610,000 b/d of petroleum products from Canada, or 26 per cent of all US petroleum product imports last year. These imports were valued at more than US $14 billion.
Natural gas trade between the United States and Canada is dominated by pipeline shipments, which accounted for 98 per cent of all U.S. natural gas imports in 2019. Historically, the United States has imported more natural gas than it has exported by pipeline to Canada.
Natural gas imports from Canada in 2019 totalled 7.4 billion cubic feet per day (Bcf/d) and were valued at US $6 billion in 2019. Most of the natural gas the United States imported from Canada originated in Western Canada and was shipped to US markets in the West and Midwest regions. US natural gas exports to Canada mainly go into the eastern provinces of Canada.
Electricity accounts for a small—but locally important—share of US-Canada energy trade. The electricity systems of both countries are fully interconnected markets, and they share more than 30 major cross-border electric transmission lines, which also supports electric system reliability.
In 2019, the United States imported 52 million megawatthours (MWh) of electricity from Canada and exported 14 million megawatthours (MWh) to Canada. The Pacific Northwest is a primary source of electricity exports to Canada and most electricity imported into the United States from Canada goes to states in the Northeast.
In late 2019, the United States, Canada, and Mexico signed a trade agreement (USMCA) that will go into effect in July 2020. According to a report from the International Trade Commission, the USMCA will likely have little effect on US-Canada energy trade.
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