Cross-border Energy Trade in North America

Cross-border Energy Trade in North America
Author: Paul W Parfomak
Publisher:
Total Pages:
Release: 2017-02-05
Genre:
ISBN: 9781542931915

The United States, Canada, and Mexico in many ways comprise one large, integrated market for energy commodities. Canada, for example, is the single largest foreign supplier of crude oil to the United States, and the United States is Canada's sole crude oil customer. Both Mexico and Canada are major buyers of petroleum products refined in the United States. A growing trade in natural gas produced in the United States is also increasingly important to the energy relationship among the three countries. Trade in the other energy commodities - electricity, natural gas liquids, and coal - is comparatively small, but regionally important. Altogether, the value of the energy trade between the United States and its North American neighbors exceeded $140 billion in 2015, with $100 billion in U.S. energy imports and over $40 billion in exports. The United States' energy trade relationships with Canada and Mexico are increasingly complex. They have been undergoing fundamental change in recent years - largely due to technological advancements in the petroleum and natural gas sectors creating new competition for energy supplies and new market interconnections. Consequently, while energy policies in one country have inevitably affected the others, their cross-cutting effects in the future are difficult to predict. Nonetheless, a review of the recent trade data highlights several key market developments. U.S. crude oil imports from both Canada and Mexico dominate the energy trade, but they support U.S. supplies of refined products to both those countries - by far the United States' largest energy export commodity to its two neighbors. U.S. development of shale gas resources has been substituting for Canadian natural gas imports and driving a rapid increase in natural gas exports to Mexico, where such supplies are in high demand to fuel that country's growing electric power sector. Canada and, to a lesser extent, Mexico have potential to provide significant future supplies of renewable electricity to U.S. markets, which could help the United States meet environmental policy objectives. The expansion of cross-border energy transportation infrastructure - pipelines for oil and natural gas, and transmission lines for electricity - has been an ongoing enabler of increased energy trade. A number of new projects are currently under construction or proposed to further expand cross-border capacity, but their completion is not assured. To date, Congress has favored a growing North American energy partnership - but ensuring that this partnership continues to be as mutually beneficial as possible will likely remain a key oversight challenge for the next decades. Congress has been facing important policy questions in the U.S.-Canada and U.S.-Mexico energy contexts on several fronts, including the siting of major cross-border pipelines, increasing petroleum supplies from Canadian oil sands, exporting natural gas production from United States' shales, and meeting commitments to increase renewable energy supplies and reduce atmospheric emissions of greenhouse gases. Legislative proposals in the 115th Congress could directly influence these developments.

U.S. Electricity Trade with Canada and Mexico, January 1992

U.S. Electricity Trade with Canada and Mexico, January 1992
Author:
Publisher:
Total Pages:
Release: 1992
Genre:
ISBN:

Although they represent less than 2 percent of overall US electricity demand today, electricity imports are a major contributor to some regions` electricity supplies and, as economical alternatives to their sources of power, they are expected to provide additional electricity supplies over the next 20 years. The report provides definitional and descriptive information about US international electricity trade, plus current data and long-term projections through 2010.

North America

North America
Author: Canada. Natural Resources Canada
Publisher:
Total Pages: 12
Release: 2002
Genre: Foreign trade regulation
ISBN:

An overview of federal regulations in Canada, Mexico and the United States with respect to the authorization of the construction and operation of international power lines, and the authorization of electricity exports and imports.

Factors Affecting Expanded Electricity Trade in North America

Factors Affecting Expanded Electricity Trade in North America
Author:
Publisher:
Total Pages:
Release: 2005
Genre:
ISBN:

The authors explore factors that affect electricity trade between enterprises in the US and Canada and the US and Mexico. They look to those underlying policy and institutional factors that affect the relative costs of producing electricity in the three countries. In particular, they consider six factors that appear to have a significant impact on electricity trade in North America: differences in the types of economic regulation of power leading to differences in cost recovery for wholesale and retail power and wheeling charges; changing regulatory attitudes, placing more emphasis on demand-side management and environmental concerns; differences in energy and economic policies; differences in national and subnational environmental policies; changing organization of electric power industries which may foster uncertainty, change historical relationships, and provide other potentially important sources of power for distribution utilities; and differences in the ability of enterprises to gain access to electric power markets because of restrictions placed on transmission access. In Section 2, the authors discuss the regulation of electricity trade in North America and provide an overview of the recent trading experience for electricity between Canada and the US and between Mexico and the US, including the volume of that trade over the past decade and existing transmission capacity between regions of the three countries. In Section 3, they look at the benefits that accrue to trading counties and what those benefits are likely to be for the three countries. The discussion in Section 4 centers on the relevant provisions of the Canada Free Trade Agreement and the proposed North American Free Trade Agreement. In Section 5, they set the stage for the discussion of policy and institutional differences presented in Section 6 by outlining differences in the organization of the electric power sectors of Canada, the US, and Mexico. The study is synthesized in Section 7.