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Canadian Energy Centre

Why Canadian oil is so important to the United States

Published

2 months ago

6 minute read

From the Canadian Energy Centre

By Deborah Jaremko

Complementary production in Canada and the U.S. boosts energy security

The United States is now the world’s largest oil producer, but its reliance on oil imports from Canada has never been higher.

Through a vast handshake of pipelines and refineries, Canadian oil and U.S. oil complement each other, strengthening North American energy security.

Here’s why.

Decades in the making

Twenty years ago, the North American energy market looked a lot different than it does today.

In the early 2000s, U.S. oil production had been declining for more than 20 years. By 2005, it dropped to its lowest level since 1949, according to the U.S. Energy Information Administration (EIA).

America’s imports of oil from foreign nations were on the rise.

But then, the first of two powerhouse North American oil plays started ramping up.

In Canada’s oil sands, a drilling technology called SAGD – steam-assisted gravity drainage – unlocked enormous resources that could not be economically produced by the established surface mining processes. And the first new mines in nearly 25 years started coming online.

In about 2010, the second massive play – U.S. light, tight oil – emerged on the scene, thanks to hydraulic fracturing technology.

Oil sands production jumped from about one million barrels per day in 2005 to 2.5 million barrels per day in 2015, reaching an average 3.5 million barrels per day last year, according to the Canada Energy Regulator.

Meanwhile, U.S. oil production skyrocketed from 5.5 million barrels per day in 2005 to 9.4 million barrels per day in 2015 and 13.3 million barrels per day in 2024, according to the EIA.

Together the United States and Canada now produce more oil than anywhere else on earth, according to S&P Global.

As a result, overall U.S. foreign oil imports declined by 35 per cent between 2005 and 2023. But imports from Canada have steadily gone up.

In 2005, Mexico, Saudi Arabia, Venezuela and Nigeria together supplied 52 per cent of U.S. oil imports. Canada was at just 16 per cent.

In 2024, Canada supplied 62 per cent of American oil imports, with Mexico, Saudi Arabia and Venezuela together supplying just 14 per cent, according to the EIA.

“Light” and “heavy” oil

Canadian and U.S. oil production are complementary because they are different from each other in composition.

Canada’s oil exports to the U.S. are primarily “heavy” oil from the oil sands, while U.S. production is primarily “light” oil from the Permian Basin in Texas and New Mexico.

One way to think of it is that heavy oil is thick and does not flow easily, while light oil is thin and flows freely – like orange juice compared to fudge.

The components that make the oil like this require different refinery equipment to generate products including gasoline, jet fuel and base petrochemicals.

Of the oil the U.S. imported from Canada from January to October last year, 75 per cent was heavy, six per cent was light, and the remaining 19 per cent was “medium,” which basically has qualities in between the two.

Tailored for Canadian crude

Many refineries in the United States are specifically designed to process heavy oil, primarily in the U.S. Midwest and U.S. Gulf Coast.

Overall, there are about 130 operable oil refineries in the United States, according to the American Fuel and Petrochemical Manufacturers.

The Alberta Petroleum Marketing Commission (APMC) estimates that 25 consistently use oil from Alberta.

According to APMC, the top five U.S. refineries running the most Alberta crude are:

  • Marathon Petroleum, Robinson, Illinois (100% Alberta crude)
  • Exxon Mobil, Joliet, Illinois (96% Alberta crude)
  • CHS Inc., Laurel, Montana (95% Alberta crude)
  • Phillips 66, Billings, Montana (92% Alberta crude)
  • Citgo, Lemont, Illinois (78% Alberta crude)

Since 2010, virtually 100 per cent of oil imports to the U.S. Midwest have come from Canada, according to the EIA.

In recent years, new pipeline access and crude-by-rail have allowed more Canadian oil to reach refineries on the U.S. Gulf Coast, rising from about 140,000 barrels per day in 2010 to about 450,000 barrels per day in 2024.

U.S. oil exports

The United States banned oil exports from 1975 to the end of 2015. Since, exports have surged, averaging 4.1 million barrels per day last year, according to the EIA.

That is nearly equivalent to the 4.6 million barrels per day of Canadian oil imported into the U.S. over the same time period, indicating that Canadian crude imports enable sales of U.S. oil to global markets.

Future outlook

Twenty-five years from now, the U.S. will need to import virtually exactly the same amount of oil as it does today (7.0 million barrels per day in 2050 compared to 6.98 million barrels per day in 2023), according to the EIA.

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Canadian Energy Centre

Saskatchewan Indigenous leaders urging need for access to natural gas

Published on April 3, 2025

By

Piapot First Nation near Regina, Saskatchewan. Photo courtesy Piapot First Nation/Facebook

From the Canadian Energy Centre

By Cody Ciona and Deborah Jaremko

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

Indigenous communities across Canada need access to natural gas to reduce energy poverty, says a new report by Energy for a Secure Future (ESF).

It’s a serious issue that needs to be addressed, say Indigenous community and business leaders in Saskatchewan.

“We’re here today to implore upon the federal government that we need the installation of natural gas and access to natural gas so that we can have safe and reliable service,” said Guy Lonechild, CEO of the Regina-based First Nations Power Authority, on a March 11 ESF webinar.

Last year, 20 Saskatchewan communities moved a resolution at the Assembly of First Nations’ annual general assembly calling on the federal government to “immediately enhance” First Nations financial supports for “more desirable energy security measures such as natural gas for home heating.”

“We’ve been calling it heat poverty because that’s what it really is…our families are finding that they have to either choose between buying groceries or heating their home,” Chief Christine Longjohn of Sturgeon Lake First Nation said in the ESF report.

“We should be able to live comfortably within our homes. We want to be just like every other homeowner that has that choice to be able to use natural gas.”

At least 333 First Nations communities across Canada are not connected to natural gas utilities, according to the Canada Energy Regulator (CER).

ESF says that while there are many federal programs that help cover the upfront costs of accessing electricity, primarily from renewable sources, there are no comparable ones to support natural gas access.

“Most Canadian and Indigenous communities support actions to address climate change. However, the policy priority of reducing fossil fuel use has had unintended consequences,” the ESF report said.

“Recent funding support has been directed not at improving reliability or affordability of the energy, but rather at sustainability.”

Natural gas costs less than half — or even a quarter — of electricity prices in Alberta, British Columbia, Ontario, Manitoba and Saskatchewan, according to CER data.

“Natural gas is something NRCan [Natural Resources Canada] will not fund. It’s not considered a renewable for them,” said Chief Mark Fox of the Piapot First Nation, located about 50 kilometres northeast of Regina.

“Come to my nation and see how my people are living, and the struggles that they have day to day out here because of the high cost of energy, of electric heat and propane.”

According to ESF, some Indigenous communities compare the challenge of natural gas access to the multiyear effort to raise awareness and, ultimately funding, to address poor water quality and access on reserve.

“Natural gas is the new water,” Lonechild said.

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Alberta

The beauty of economic corridors: Inside Alberta’s work to link products with new markets

Published on April 1, 2025

By

From the Canadian Energy Centre

Q&A with Devin Dreeshen, Minister of Transport and Economic Corridors

Devin Dreeshen, Alberta’s Minister of Transportation
and Economic Corridors.

CEC: How have recent developments impacted Alberta’s ability to expand trade routes and access new markets for energy and natural resources?

Dreeshen: With the U.S. trade dispute going on right now, it’s great to see that other provinces and the federal government are taking an interest in our east, west and northern trade routes, something that we in Alberta have been advocating for a long time.

We signed agreements with Saskatchewan and Manitoba to have an economic corridor to stretch across the prairies, as well as a recent agreement with the Northwest Territories to go north. With the leadership of Premier Danielle Smith, she’s been working on a BC, prairie and three northern territories economic corridor agreement with pretty much the entire western and northern block of Canada.

There has been a tremendous amount of work trying to get Alberta products to market and to make sure we can build big projects in Canada again.

CEC: Which infrastructure projects, whether pipeline, rail or port expansions, do you see as the most viable for improving Alberta’s global market access?

Dreeshen: We look at everything. Obviously, pipelines are the safest way to transport oil and gas, but also rail is part of the mix of getting over four million barrels per day to markets around the world.

The beauty of economic corridors is that it’s a swath of land that can have any type of utility in it, whether it be a roadway, railway, pipeline or a utility line. When you have all the environmental permits that are approved in a timely manner, and you have that designated swath of land, it politically de-risks any type of project.

CEC: A key focus of your ministry has been expanding trade corridors, including an agreement with Saskatchewan and Manitoba to explore access to Hudson’s Bay. Is there any interest from industry in developing this corridor further?

Dreeshen: There’s been lots of talk [about] Hudson Bay, a trade corridor with rail and port access. We’ve seen some improvements to go to Churchill, but also an interest in the Nelson River.

We’re starting to see more confidence in the private sector and industry wanting to build these projects. It’s great that governments can get together and work on a common goal to build things here in Canada.

CEC: What is your vision for Alberta’s future as a leader in global trade, and how do economic corridors fit into that strategy?

Dreeshen: Premier Smith has talked about C-69 being repealed by the federal government [and] the reversal of the West Coast tanker ban, which targets Alberta energy going west out of the Pacific.

There’s a lot of work that needs to be done on the federal side. Alberta has been doing a lot of the heavy lifting when it comes to economic corridors.

We’ve asked the federal government if they could develop an economic corridor agency. We want to make sure that the federal government can come to the table, work with provinces [and] work with First Nations across this country to make sure that we can see these projects being built again here in Canada.

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