Why the US Needs its Neighbors for Energy

AI Summary

North America's energy trade is characterized by bilateral relationships, with Canadian oil flowing to US refineries and US natural gas powering Mexico's economy. Energy experts suggest maintaining the current arrangement during upcoming USMCA negotiations.

Unlike autos or agriculture, North America’s energy trade does not function as a single, integrated three-country system. Instead, it operates through two powerful bilateral relationships: Canadian oil flowing south into US refineries and American natural gas powering Mexico’s economy. Howard Energy Partners CEO Mike Howard says roughly 70% of Mexico’s energy comes from the United States, while former Canada Energy Regulator CEO Gitane De Silva notes that about 60% of US oil imports originate in Canada. As USMCA negotiations approach, energy executives, regulators, and policy experts largely agree on one thing: the current arrangement works remarkably well, and the best outcome may be to leave it largely untouched. (Source: Bloomberg)