Canada is an important trade and security partner for the United States. It is a member of NATO and the Five Eyes intelligence-sharing alliance, and it regularly participates in peacekeeping operations around the world. With a shared border stretching 3,987 miles long, the United States and Canada also maintain a significant trade relationship via NAFTA and cooperate heavily on security matters.
Canada is a net exporter of total energy: It produces 19.0 quadrillion British thermal units (btu) while consuming only 13.3 quadrillion btu. Canada is the world’s fifth-largest producer of dry natural gas, and thanks to expanding production in the Alberta tar sands since 2002, Canada has become the fifth-largest exporter of energy in the world. Canada’s oil sands account for nearly all of its 167 billion barrels of proven reserves, putting it behind only Venezuela and Saudi Arabia in terms of proven oil reserves.
Though oil sands are the most well known of Canada’s energy resources, the country’s shale potential has risen in importance with the boom in U.S. shale production. Recent estimates point to as much as 200 billion barrels of shale oil reserves in Canada’s Northwest Territories; the Canol and Bluefish shale basins, located in the Northwest Territories, together contain nearly 7 billion barrels of viable reserves. (By comparison, the United States’ Bakken formation is thought to hold about 7.4 billion barrels of recoverable reserves.) Still, there are a number of obstacles to the development of Canada’s shale resources. Environmentalists have staunchly opposed fracking in Canada, citing its potentially harmful effects for groundwater and sensitive ecological systems, and Canada lacks some of the infrastructure needed to produce oil and gas in the remote Northwest Territories and transport it to the market.
About 97% of Canadian energy exports go to the United States. Canada mainly exports LNG to the United States through pipelines, though in times of shortage companies have used the trucking industry to transport energy exports. Despite some recent tension in the U.S.-Canada energy relationship stemming from the political kerfuffle over the Keystone XL pipeline, Canadian supplies to the United States are considered so reliable and important that analysts often talk about the political goal of “North American energy independence” rather than “U.S. energy independence.” U.S. energy independence is implicitly considered unnecessary because Canadian (and Mexican) supplies are so reliable that North American energy independence would effectively allow the United States to become energy secure while still importing Canadian oil and gas. Of course “North American energy independence” is just as much a meaningless slogan as “U.S. energy independence,” given the nature of the integrated global market.