Wednesday, June 10, 2020
Canada is the largest source of U.S. energy imports and the second-largest destination for U.S. energy exports, behind only Mexico, according to a recent report from the U.S. Energy Information Administration (EIA). Energy is an important component of trade between Canada and the United States. Based on the latest annual Standard International Trade Classification (SITC) data from the U.S. Census Bureau, in 2019 energy accounted for $85 billion (U.S.), or 27%, of the value of all U.S. imports from Canada. Crude oil and petroleum products accounted for 91% of the value of U.S. energy imports from Canada and 89% of the value of U.S. energy exports to Canada.
The U.S. exported $23 billion worth of crude oil, petroleum products, natural gas, and electricity to Canada in 2019. This is about 8% of the value of all U.S. exports to Canada and the second-highest level recorded after peaking in 2014.
U.S. crude oil imports from Canada accounted for 56% of all crude oil imports to the U.S. in 2019, averaging 3.8 MMbbld, up from 3.7 MMbbld in 2018. In 2019, the United States exported 459,000 bbld of crude oil to Canada, which remained the largest destination for U.S. crude oil exports. U.S. crude oil exports to Canada are typically light, sweet grades that are shipped to the eastern part of the country. U.S. 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 U.S. 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, U.S. imports of Canada’s crude oil by rail have more than tripled from an average of 91,000 bbld in 2016 to an average of 300,000 bbld in 2019. More than half of the crude oil volume imported by rail, 171,000 bbl, went to the U.S. Gulf Coast region.
Petroleum product trade between the U.S. and Canada is relatively balanced in both volume and value. Canada is the largest source of U.S. petroleum and refined products imports. In 2019, the United States imported a record 610,000 b/d of petroleum products from Canada, or 26% of all U.S. petroleum product imports last year. These imports were valued at more than $14 billion U.S.
Natural gas trade between the United States and Canada is dominated by pipeline shipments, which accounted for 98% of all U.S. natural gas imports in 2019. Historically, the U.S. has imported more natural gas than it has exported by pipeline to Canada. Natural gas imports from Canada in 2019 totaled 7.4 Bfcd and were valued at $6 billion (U.S.) in 2019. Most of the natural gas the U.S. imported from Canada originated in Western Canada and was shipped to U.S. markets in the West and Midwest regions. U.S. natural gas exports to Canada primarily go to the eastern provinces of Canada.
Electricity accounts for a small, but locally important, share of U.S.-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 U.S. imported 52 million MWh of electricity from Canada and exported 14 million 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 U.S.-Canada energy trade.
SOURCE: The Weekly Propane Newsletter, June 11, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.
The U.S. exported $23 billion worth of crude oil, petroleum products, natural gas, and electricity to Canada in 2019. This is about 8% of the value of all U.S. exports to Canada and the second-highest level recorded after peaking in 2014.
U.S. crude oil imports from Canada accounted for 56% of all crude oil imports to the U.S. in 2019, averaging 3.8 MMbbld, up from 3.7 MMbbld in 2018. In 2019, the United States exported 459,000 bbld of crude oil to Canada, which remained the largest destination for U.S. crude oil exports. U.S. crude oil exports to Canada are typically light, sweet grades that are shipped to the eastern part of the country. U.S. 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 U.S. 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, U.S. imports of Canada’s crude oil by rail have more than tripled from an average of 91,000 bbld in 2016 to an average of 300,000 bbld in 2019. More than half of the crude oil volume imported by rail, 171,000 bbl, went to the U.S. Gulf Coast region.
Petroleum product trade between the U.S. and Canada is relatively balanced in both volume and value. Canada is the largest source of U.S. petroleum and refined products imports. In 2019, the United States imported a record 610,000 b/d of petroleum products from Canada, or 26% of all U.S. petroleum product imports last year. These imports were valued at more than $14 billion U.S.
Natural gas trade between the United States and Canada is dominated by pipeline shipments, which accounted for 98% of all U.S. natural gas imports in 2019. Historically, the U.S. has imported more natural gas than it has exported by pipeline to Canada. Natural gas imports from Canada in 2019 totaled 7.4 Bfcd and were valued at $6 billion (U.S.) in 2019. Most of the natural gas the U.S. imported from Canada originated in Western Canada and was shipped to U.S. markets in the West and Midwest regions. U.S. natural gas exports to Canada primarily go to the eastern provinces of Canada.
Electricity accounts for a small, but locally important, share of U.S.-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 U.S. imported 52 million MWh of electricity from Canada and exported 14 million 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 U.S.-Canada energy trade.
SOURCE: The Weekly Propane Newsletter, June 11, 2020. Weekly Propane Newsletter subscribers receive all the latest posted and spot prices from major terminals and refineries around the U.S. delivered to inboxes every week. Receive a center spread of posted prices with hundreds of postings updated each week, along with market analysis, insightful commentary, and much more not found elsewhere.
