Prime Minister Mark Carney emphasized the significant role Canada plays in driving American economic growth by exporting natural gas to the U.S. This raises the question of what impact it would have if Canada ceased these exports.
Despite the ongoing trade tensions between Canada and the U.S., energy products like oil and natural gas have not been used as bargaining chips. Alberta Premier Danielle Smith has consistently opposed this idea, while Ontario’s Doug Ford believes all options should be considered.
Carney highlighted that the U.S.’s reliance on Canadian energy is substantial, with Canada supplying 99% of their natural gas imports, 85% of electricity imports, and 60% of crude oil imports. While the U.S. heavily depends on Canadian natural gas imports, it only represents a small portion (about 8%) of overall U.S. natural gas consumption.
Dulles Wang, director of Americas gas and LNG at Wood Mackenzie, suggests that Canadian natural gas exports to the U.S. account for a minimal percentage, mainly serving markets in the western and Midwest regions. Enbridge, based in Calgary, stands as the largest natural gas provider in North America.
The interconnected natural gas pipelines between Canada and the U.S. facilitate the constant flow of gas in both directions. Despite the relatively small volume of Canadian gas compared to U.S. production, the strategic locations of these deliveries are crucial.
Halting natural gas shipments to the U.S. would have adverse effects on Canada’s gas industry, leading to an oversupply and plummeting prices. The move would be detrimental to Canada’s economy, eliminating a significant market and causing price crashes.
The Canadian government aims to diversify its energy exports beyond the U.S., with recent LNG shipments to Asian markets from facilities like LNG Canada in Kitimat, B.C. Wang stresses the importance of supporting such projects to reduce dependency on the U.S. market.