Continental Energy Sharing

Report Outline
Energy and U.S.-Canadian Relations
Continentalism and Fuel Resources
Prospects for Future Cooperation
Special Focus

Energy and U.S.-Canadian Relations

Debate Over Energy Exports to United States

Canada currently exports about half of its oil and more than a third of its natural gas production to the United States. At the same time, more than 20 million tons of Ohio coal are used annually to fire steel mills and power plants in Ontario, Canada's industrial heartland. Billions of kilowatt hours of electricity are freely traded across the international border each year. But today the future of this kind of exchange has been thrown into doubt, as both countries have announced their intention to become self-sufficient in energy by 1980.

Real or contrived, current energy shortages appear to have ended any early consideration of a Continental Energy-Sharing Agreement between Canada and the United States. Discussions toward such a pact were broken off by Canada in 1971 and are not likely to be resumed, given the rising tide of Canadian economic nationalism. Many Canadians view “continental sharing” as an opportunity for Canada to share its vast resources while the United States shares its growing shortages. Exports of Canadian crude oil to the United States have already begun to fall and are expected to dwindle further as Canada's diminishing supplies are routed to domestic consumers.

On paper, Canada is already self-sufficient in energy. However, it lacks facilities to transport fuel from the western oil fields to the five easternmost provinces. Newfoundland, Prince Edward Island, New Brunswick, Nova Scotia, Quebec and part of Ontario are totally dependent on oil shipped in by tanker, chiefly from Venezuela and Iran. In fact, Canada counts on oil imports for more than one-half of its consumption (compared to one-third for the United States) and is thus even more vulnerable than America to price increases and shortages in the international market.