U.S./Canada Natural Gas Trade: Energy independent, kind of…

Both the United States and Canada have significant amounts of natural gas production and reserves within the sovereign territories their borders contain.  Both countries currently produce more than consumption within their boundaries and export significant amounts of excess commodity to other countries, and both are energy independent and net exporters of energy.   

The U.S. Energy Information Administration puts out volumes of energy data, and within that data for 2025, we find that in addition to the 16.4 Bcf per day of feedgas the U.S. sent to LNG export facilities to serve importing markets abroad and exported an average of 6.9 Bcf per day to Mexico via pipeline.  Both of those exports make sense since they were exported to countries that were net importers of the commodity.  What isn’t as easy to understand is that in 2025, the U.S. also exported an average of 2.83 Bcf/day to our neighbors to the north in Canada.  Even more confusing is the fact that the EIA also reported that for the same 2025 year, Canada also exported an average of 8.6 Bcf per day to the U.S., for a net import last year of 5.7 Bcf/day into the U.S. from Canada.  Below is a chart that shows the imports the U.S. received from Canada (Blue line), gas that the U.S. exported to Canada (Orange line) and the net between the two (dashed light green).  

So why don’t both countries just keep the gas they produce within their borders and ship it to other countries that need it? Simply put, just because you can do something doesn’t always mean you should, and when it comes to the mutually beneficial way in which the U.S. and Canada trade natural gas with each other, this saying is true.  Here are a few reasons: 

• Natural gas production is constrained by geology and geography, not borders.  Over 95% of Canada’s natural gas production is in the western provinces of Alberta and British Columbia while 60% of the population of Canada and a majority of their industrial gas demand is located in the eastern provinces of Ontario and Quebec.  In the U.S., the largest natural gas producing region is Appalachia, in the eastern part of the country and happens to be physically closer to the Canadian market than the production within their own country.  As such, the eastern Canada receives support in peak winter conditions and during summer peak power generation periods. 
• Without Canadian sourced natural gas supplies in the Winter, several U.S. regions would have demand in excess of available supply.  The Midwest U.S. is the largest import region of Canadian gas.  Minnesota, Michigan and Wisconsin rely on imports to meet demand for residential heating, power generation and industrial consumers throughout most core Dec, Jan, Feb winter months.  Western states of Washington, Idaho and Montana have physical pipeline connections with Canadian supplies and California routinely receives gas via connections with U.S. pipelines that serve them.  In the U.S. Northeast, New York, Vermont and New Hampshire also use connections with Canada to feed demand for winter heating. 
• Pipeline interconnects between the two countries are bi-directional and provides an outlet for each country not just during periods of oversupply but also offers reliability of supply in periods of high demand, making use of the regional diversity of these two advanced energy markets while giving both the ability to arbitrage price differentials that often exists in these geographically different but physically connected markets. 

In short, while both countries could become completely energy independent, it would come at an extremely high cost, would be less reliable, and physically impossible without adding significant pipelines and storage facilities.  The arrangement that exists today allows summer and winter peaks to be met more efficiently without overbuilding of infrastructure to meet the peak demand of both.  In the case of the U.S. and Canadian natural gas relationship, both benefit from the other, and one could argue that since the U.S. is a 5.8 Bcf/day net importer, it could be considered the greater beneficiary.  It is my hope we will continue to partner with our neighbors to the north and find ways to expand that relationship well into the future, and for the benefit of both.