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Citing benefits of continental market, U.S., Canada, Mexico pursue closer ties on energy

by Ilene Grossman ~ March 2016 ~ Stateline Midwest »
Canada and the United States have long been each other’s most important energy partners, with annual trade between the two countries in this economic sector at nearly $100 billion. Cross-border pipelines bring natural gas and oil south to major U.S. markets, and two Midwestern states, Minnesota and North Dakota, imported 12 percent of their electricity from Canada in 2014.
“North America is an integrated market,” notes Dan D’Autremont, speaker of the Legislative Assembly of Saskatchewan.
But leaders at the federal, state and provincial levels are taking steps now to deepen the two countries’ relationship, this time with an emphasis on sharing information and working more closely on innovations to reshape the future of energy policy and energy use across the entire continent.
In February, leaders of the U.S., Canadian and Mexican federal energy departments signed a new Memorandum of Understanding Concerning Climate Change and Energy Collaboration. With this new agreement in place, the three countries are expected to more freely share information in areas such as:
  1. improvements in energy-efficiency equipment;
  2. deployment of carbon capture, use and storage technologies;
  3. strategies to help communities adapt to climate change; and
  4. best practices to reduce emissions from the oil and gas sectors.
The three countries have also begun producing a continent-wide outlook on trends in energy resources, infrastructure, production and trade.
D’Autremont believes all three countries will gain from the strengthened relationship. “It is to all of our benefit to maintain a continental market, to gain the benefits of efficiencies, to gain the benefits of shorter transportation routes no matter where the energy comes from” in the region, he says.
In the “2015 Trilateral Energy Outlook,” the authors note that a mix of factors already make the three countries “a single [semi-integrated] energy market.” Those factors include geographic proximity of Canada, Mexico and the United States to one another; their isolation from other markets; and the fact that many energy commodities are already traded freely.
“Having an integrated system, where we can draw power from each other across North America, is a security benefit for all of us,” says D’Autremont, adding that a continental market also leads to greater efficiencies.
D’Autremont is leading a region-wide effort to strengthen the energy relationship between the Midwest’s states and provinces, as chair of the Midwestern Legislative Conference’s Midwest-Canada Relations Energy Subcommittee. The subcommittee will meet in June to explore state and provincial policies on renewable energy and to discuss energy trade, including the expanded use of renewable resources such as hydropower.

 

Article written by Ilene Grossman, CSG Midwest staff liaison for the Midwestern Legislative Conference Midwest-Canada Relations Committee.