In a recent speech, Prime Minister Mark Carney emphasized the significant role Canada plays in fueling American growth through U.S.-bound natural gas exports. The question arises: what would happen if Canada ceased these shipments to the United States?
Despite the escalating Canada-U.S. trade war, energy products like oil and natural gas have not been used as bargaining chips. Alberta Premier Danielle Smith has consistently rejected this idea, while Ontario’s Doug Ford believes all options should be considered.
Carney highlighted that a significant portion of the U.S.’s energy supply comes from Canada, with Canada supplying 99% of their natural gas imports, 85% of their electricity imports, and 60% of their crude oil imports. Although the U.S. heavily relies on Canadian energy, it represents only a fraction of their total natural gas consumption.
According to Dulles Wang, director of Americas gas and LNG at Wood Mackenzie, Canadian natural gas shipments to the U.S. account for around five to eight percent of American consumption. The interconnected natural gas pipelines between the two countries facilitate constant cross-border flows to meet energy demands in various regions.
Enbridge, the largest natural gas provider in North America based in Calgary, acquired three U.S. utilities in a multi-billion-dollar deal in 2024, further illustrating the integrated nature of the energy trade between Canada and the U.S.
While the volume of Canadian natural gas sent to the U.S. may seem modest compared to domestic production, the locations of these deliveries are crucial. Regions like the Pacific Northwest heavily rely on Canadian gas imports, with over 90% of their supply coming from Canada.
The potential halt of U.S.-bound natural gas shipments could have severe repercussions on the Canadian industry, leading to a surplus of supply, plummeting prices, and economic strain. Wang warns that Canada would harm itself by losing its primary customer and causing a market collapse.
To diversify its energy exports, Canada aims to target non-U.S. markets. Initiatives like the LNG Canada facility in Kitimat, B.C., which started exporting liquefied natural gas to Asian markets, signify efforts to reduce reliance on the U.S. market and expand global trade opportunities.
The government’s support for new energy projects like the Ksi Lisims LNG export facility demonstrates a commitment to enhancing Canada’s energy export capabilities beyond traditional markets, ensuring resilience and growth in the energy sector.
