As Canada moves to diversify markets for its vast oil and gas resources, experts say one reality remains: the United States will continue to be its largest energy customer.

Maintaining and strengthening that relationship is critical to North American energy security amid global instability and shifting U.S. policies.

“Market diversification for the oil and natural gas industry is not about ‘replacement.’ Diversification means growing our customer base, growing production, growing exports, and growing the Canadian economy,” said Lisa Baiton, CEO of the Canadian Association of Petroleum Producers. 

“We should work to forge a renewed continental energy alliance that is attuned to new global realities.”

An integrated energy machine

A recent analysis by the Montreal Economic Institute (IEDM) outlines the scale of current Canada-U.S. energy relationship. 

In 2024, Canada exported $169.8 billion worth of hydrocarbons — including crude oil, natural gas, natural gas liquids and refined petroleum products — to the United States. 

Led by crude oil, that accounts for 22 per cent of all Canadian goods exports and the bulk of the U.S.’s imported energy supply.

The trade flows in both directions, with Ontario, Quebec and the Atlantic region driving $33.4 billion of U.S. oil and gas imports in the same year. 

“In many ways, the border is an afterthought for this integrated North American energy machine, which has kept churning for a century, regardless of political winds,” wrote IEDM researchers Taylor MacPherson and Gabriel Giguère.

“But we can’t take it for granted; we must be steadfast in protecting this unique, mutually beneficial relationship.”

Growing pressures from global instability

The long-standing North American partnership is being tested by geopolitical uncertainty. 

Wars involving Ukraine and Iran have driven volatility in global energy markets. At the same time, the U.S. has introduced tariffs and incentives aimed at strengthening domestic energy supply chains.

While the U.S. often describes its strategy as one of “energy dominance,” that does not necessarily mean independence from Canada. 

As production of light oil from the Permian Basin has grown, so too have imports of heavier Canadian crude, primarily from Alberta’s oil sands.

Many U.S. refineries are built for heavy oil, particularly in the Midwest and Gulf Coast — but the U.S. doesn’t produce much of it, RBN Energy analyst Jason Lindquist noted recently.

“[This] makes heavy crude from nearby Canada and Latin America essential,” he wrote in a March research note. 

Canadian oil and gas underpins U.S. energy exports

Since the United States lifted its oil export ban in 2015, its light crude exports have surged, averaging about 4 million barrels per day last year, according to the U.S. Energy Information Administration (EIA).

That’s roughly equal to the volume of Canadian oil – primarily heavy oil – that the U.S. imported over the same period.

America depends on Canada to complement its natural gas supply as well. 

The U.S. is now the world’s largest liquefied natural gas (LNG) exporter, yet its natural gas imports have remained steady since LNG exports began in 2016. 

In 2025, 99.7 per cent of those imports came from Canada, according to the EIA.

Strengthening the Canada-U.S. energy relationship

While diversification work continues, observers say Canada must also keep strengthening the partnerships that bind its energy system to that of the United States.

The Washington D.C.-based Atlantic Council has advocated for a North American-wide approach. 

It urges Canada, the U.S. and Mexico to pursue a continental energy security strategy that aligns emissions reduction policies, regulatory systems and infrastructure development plans to give all three countries a global advantage.

The former CEO of the Canada Energy Regulator says Canada’s importance as a reliable energy supplier is increasing as energy prices spike amid conflict in the Middle East and a review of the Canada-United States-Mexico (CUSMA) trade agreement.

“The volatility of the current situation will make Canada more attractive as an investment location because we are seen as stable,” Gitane De Silva said in a recent interview. 

The IEDM argues that Canada needs to adopt clear “energy diplomacy” objectives to advance commercial deals with key international customers.

“As North America’s share of global oil and gas trade grows, every extra barrel or cubic foot we move strengthens our allies, thins our adversaries’ leverage, and maximizes value for the benefit of all Canadians,” MacPherson and Giguère concluded.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

The Port of Vancouver has emerged as a lifeline for Asian oil refiners amid disruption of the vital shipping route through the Strait of Hormuz, according to ATB Cormark Capital Markets.

Tankers calling at the port’s Westridge Marine Terminal now have access to an expanded, reliable supply of oil from Alberta, thanks to the Trans Mountain pipeline. 

Not only do these barrels have clear sailing to Asian ports, analysts say they’re just the type of oil Asian refiners are increasingly looking for. 

About half the oil flowing through the pipeline is considered “heavy,” one of the grades most affected by the Strait of Hormuz closure, ATB said.

“Canadian heavy oil could become a premium global asset,” managing director of institutional equity research Patrick O’Rourke wrote on Mar. 2.

SAGD oil sands project in northern Alberta. Photo courtesy Cenovus Energy

Stability in a volatile market

It’s a sentiment that was building before the new conflict in the Middle East.

“Beyond price, Canada offers something increasingly valuable — a large, stable and reliable supply of heavy crude,” Studio.Energy director of research Carmen Velasquez wrote in November. 

“At a time when geopolitical risk is reshaping energy trade flows…this reliability is becoming a strategic differentiator, not just a commercial one.” 

Why heavy oil matters

Exported mainly from Alberta’s oil sands, heavy oil is one of Canada’s biggest energy assets. 

Thick and gooey, it requires diluent for transportation and complex processing to produce gasoline, jet fuel and petrochemicals used in everyday items.

The large-scale petrochemical refineries in Asia that are driving oil demand growth can pair well with Alberta’s heavy oil, Velasquez said.

“In recent years, [China] has invested heavily in new mega-refineries and upgraded existing ones to handle heavier and more complex crude slates,” she said.

Zhejiang Petrochemical Complex in in Zhejiang, China. Photo courtesy Zhejiang Petroleum and Chemical Co.

Asia’s growing appetite

China is Asia’s “heavy oil hub,” RBC director of energy policy Shaz Merwat wrote in a November research note. 

“China is sharply pivoting into petrochemicals, aiming to take Japanese and Korean market share,” Merwat said. 

“India, too, is expected to see oil imports grow 1.5 million barrels per day by 2035 as both countries seek steady supplies of heavy and sour crude,” he said. 

“Today, that supply originates from the Middle East, Russia and Venezuela, creating an opening for a stable, Western entrant.”

Canadian barrels gaining a foothold

Canadian heavy oil has started building a footprint in Asia thanks to the Trans Mountain expansion and “re-exports” — Western Canadian barrels shipped from terminals on the U.S. Gulf Coast.

Both China and India have purchased Canadian oil from Trans Mountain since the expanded pipeline went into service in May 2024, the company reports.

Courtesy Trans Mountain Corporation

While China leads overseas sales from Trans Mountain, India is a regular buyer of U.S. Gulf Coast re-exports, according to RBN Energy.

Courtesy RBN Energy

Demand keeps climbing

“Besides ongoing efforts to expand the Chinese customer base, India and Southeast Asia are the most promising growth markets for Canadian crude,” Studio.Energy’s Velasquez said. 

“And this is no small opportunity.”

The International Energy Agency projects oil demand in the Asia-Pacific region will rise to 41 million barrels per day by 2050, up from 35 million barrels per day in 2024.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

For Canada, the path to a stronger economy — and stronger global influence — runs through energy. 

That’s the view of David Detomasi, a professor at the Smith School of Business at Queen’s University. 

Detomasi, author of Profits and Power: Navigating the Politics and Geopolitics of Oil, argues that there is a moral case for developing Canada’s energy, both for Canadians and the world. 

David Detomasi. Photo courtesy Smith School of Business, Queen’s University

CEC: What does being an energy superpower mean to you?

DD: It means Canada is strong enough to affect the system as a whole by its choices. 

There is something really valuable about Canada’s — and Alberta’s — way of producing carbon energy that goes beyond just the monetary rewards.

CEC: You talk about the moral case for developing Canada’s energy. What do you mean? 

DD: I think the default assumption in public rhetoric is that the environmental movement is the only voice speaking for the moral betterment of the world. That needs to be challenged.

That public rhetoric is that the act of cultivating a powerful, effective economic engine is somehow wrong or bad, and that efforts to create wealth are somehow morally tainted.

I think that’s dead wrong. Economic growth is morally good, and we should foster it. 

Economic growth generates money, and you can’t do anything you want to do in social expenditures without that engine. 

Economic growth is critical to doing all the other things we want to do as Canadians, like having a publicly funded health care system or providing transfer payments to less well-off provinces.

Over the last 10 years, many people in Canada came to equate moral leadership with getting off of oil and gas as quickly as possible. I think that is a mistake, and far too narrow. 

Instead, I think moral leadership means you play that game, you play it well, and you do it in our interest, in the Canadian way. 

We need a solid base of economic prosperity in this country first, and then we can help others.

CEC: Why is it important to expand Canada’s energy trade?

DD: Canada is, and has always been, a trading nation, because we’ve got a lot of geography and not that many people. 

If we don’t trade what we have with the outside world, we aren’t going to be able to develop economically, because we don’t have the internal size and capacity.

Historically, most of that trade has been with the United States. Geography and history mean it will always be our primary trade partner.

But the United States clearly can be an unreliable partner. Free and open trade matters more to Canada than it does to the U.S. Indeed, a big chunk of the American people is skeptical of participating in a global trading system. 

As the United States perhaps withdraws from the international trading and investment system, there’s room for Canada to reinforce it in places where we can use our resource advantages to build new, stronger relationships. 

One of these is Europe, which still imports a lot of gas. We can also build positive relationships with the enormous emerging markets of China and India, both of whom want and will need enormous supplies of energy for many decades.

I would like to be able to offer partners the alternative option of buying Canadian energy so that they are less reliant on, say, Iranian or Russian energy.

Canada can also maybe eventually help the two billion people in the world currently without energy access.

CEC: What benefits could Canadians gain by becoming an energy superpower? 

DD: The first and primary responsibility of our federal government is to look after Canada. At the end of the day, the goal is to improve Canada’s welfare and enhance its sovereignty. 

More carbon energy development helps Canada. We have massive debt, an investment crisis and productivity problems that we’ve been talking about forever. Economic and job growth are weak.

Solving these will require profitable and productive industries. We don’t have so many economic strengths in this country that we can voluntarily ignore or constrain one of our biggest industries. 

The economic benefits pay for things that make you stronger as a country. 

They make you more resilient on the social welfare front and make increasing defence expenditures, which we sorely need, more affordable. It allows us to manage the debt that we’re running up, and supports deals for Canada’s Indigenous peoples. 

CEC: Are there specific projects that you advocate for to make Canada an energy superpower?

DD: Canada’s energy needs egress, and getting it out to places other than the United States. That means more transport and port facilities to Canada’s coasts.

We also need domestic energy transport networks. People don’t know this, but a big chunk of Ontario’s oil supply runs through Michigan, posing a latent security risk to Ontario’s energy security. 

We need to change the perception that pipelines are evil. There’s a spiderweb of them across the globe, and more are being built.

Building pipelines here, with Canadian technology and know-how, builds our competitiveness and enhances our sovereignty. 

Economic growth enhances sovereignty and provides the resources to do other things. We should applaud and encourage it, and the carbon energy sector can lead the way. 

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

Once priced at a steep discount to its lighter, sweeter counterparts, Canadian oil has earned growing admiration—and market share—among new customers in Asia.

Canada’s oil exports are primarily “heavy” oil from the Alberta oil sands, compared to oil from more conventional “light” plays like the Permian Basin in the U.S.

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 fudge compared to apple juice.

“The refining industry wants heavy oil. We are actually in a shortage of heavy oil globally right now, and you can see that in the prices,” said Susan Bell, senior vice-president of downstream research with Rystad Energy.

A narrowing price gap

Alberta’s heavy oil producers generally receive a lower price than light oil producers, partly a result of different crude quality but mainly because of the cost of transportation, according to S&P Global. 

The “differential” between Western Canadian Select (WCS) and West Texas Intermediate (WTI) blew out to nearly US$50 per barrel in 2018 because of pipeline bottlenecks, forcing Alberta to step in and cut production.

So far this year, the differential has narrowed to as little as US$10 per barrel, averaging around US$12, according to GLJ Petroleum Consultants.

“The differential between WCS and WTI is the narrowest I’ve seen in three decades working in the industry,” Bell said.

Trans Mountain Expansion opens the door to Asia

Oil tanker docked at the Westridge Marine Terminal in Burnaby, B.C. Photo courtesy Trans Mountain Corporation

The price boost is thanks to the Trans Mountain expansion, which opened a new gateway to Asia in May 2024 by nearly tripling the pipeline’s capacity. 

This helps fill the supply void left by other major regions that export heavy oil – Venezuela and Mexico – where production is declining or unsteady. 

Canadian oil exports outside the United States reached a record 525,000 barrels per day in July 2025, the latest month of data available from the Canada Energy Regulator. 

China leads Asian buyers since the expansion went into service, along with Japan, Brunei and Singapore, Bloomberg reports. 

Asian refineries see opportunity in heavy oil

“What we are seeing now is a lot of refineries in the Asian market have been exposed long enough to WCS and now are comfortable with taking on regular shipments,” Bell said. 

Kevin Birn, chief analyst for Canadian oil markets at S&P Global, said rising demand for heavier crude in Asia comes from refineries expanding capacity to process it and capture more value from lower-cost feedstocks.

“They’ve invested in capital improvements on the front end to convert heavier oils into more valuable refined products,” said Birn, who also heads S&P’s Center of Emissions Excellence. 

Refiners in the U.S. Gulf Coast and Midwest made similar investments over the past 40 years to capitalize on supply from Latin America and the oil sands, he said. 

While oil sands output has grown, supplies from Latin America have declined.

Mexico’s state oil company, Pemex, reports it produced roughly 1.6 million barrels per day in the second quarter of 2025, a steep drop from 2.3 million in 2015 and 2.6 million in 2010.

Meanwhile, Venezuela’s oil production, which was nearly 2.9 million barrels per day in 2010, was just 965,000 barrels per day this September, according to OPEC.

The case for more Canadian pipelines

Worker at an oil sands SAGD processing facility in northern Alberta. Photo courtesy Strathcona Resources

“The growth in heavy demand, and decline of other sources of heavy supply has contributed to a tighter market for heavy oil and narrower spreads,” Birn said. 

Even the International Energy Agency, known for its bearish projections of future oil demand, sees rising global use of extra-heavy oil through 2050. 

The chief impediments to Canada building new pipelines to meet the demand are political rather than market-based, said both Bell and Birn. 

“There is absolutely a business case for a second pipeline to tidewater,” Bell said. 

“The challenge is other hurdles limiting the growth in the industry, including legislation such as the tanker ban or the oil and gas emissions cap.”

A strategic choice for Canada

Because Alberta’s oil sands will continue a steady, reliable and low-cost supply of heavy oil into the future, Birn said policymakers and Canadians have options.

“Canada needs to ask itself whether to continue to expand pipeline capacity south to the United States or to access global markets itself, which would bring more competition for its products.”

The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.

A deal to supply Asian customers with butane shipped from the coast of B.C. promises to expand Canada’s global energy footprint, underscoring untapped potential and the benefits of diversifying beyond the U.S. market.

Butane and propane are what’s known as liquid petroleum gases (LPGs).

Produced during natural gas processing and oil refining, these versatile energy products are in high demand for a wide range of uses including feedstock for plastics and synthetic rubber production, fuels for heating and cooking, and solvents in industrial applications.

“Demand remains strong going forward for the Asian markets as consumers continue to increase living standards and income levels and use more of the everyday items that we take for granted,” said Martin King, managing director of North America energy market analysis for Houston-based RBN Energy.

The new deal commits Calgary-based AltaGas to supply German chemical giant BASF with butane for chemical manufacturing and industrial use in Asian markets. 

Butane and propane from Alberta can be shipped by rail to reach terminals on the West Coast, including the AltaGas Ridley Island Energy Export Facility that is under construction near Prince Rupert. 

Known as REEF, it is an expansion of the company’s LPG export operations that is scheduled to start operating in 2027. AltaGas opened Canada’s first marine propane export terminal on Ridley Island in 2019.

BASF president of global procurement Matthias Dohrn said partnering with AltaGas secures “reliable and competitive access” to butane from Western Canada. 

While details on the scope of the agreement were not released, King said AltaGas is already talking about expanding REEF capacity by 2030. 

“I suspect that the expansion has a good chance of going ahead given that the demand for LPGs out of Asia has remained very robust,” he said.

Canada’s success in growing propane exports offers a model for butane’s potential. 

According to the Canada Energy Regulator (CER), propane exports – most of which come from Alberta – have more than doubled over the past decade as the new B.C. terminal infrastructure came online. 

As of June 2025, shipments to non-U.S. locations were nearly even with exports south of the border, CER reports. 

According to the Canadian Propane Association (CPA), the largest customers after the U.S. are Japan, South Korea and Mexico. 

Earlier this year, the CPA joined Alberta government officials, industry representatives and Indigenous leaders on a trade mission to Japan aimed at diversifying Canada’s energy exports.

“Canadian propane, with its lower carbon footprint, is uniquely positioned to support Japan’s decarbonization efforts,” said the CPA’s President and CEO Shannon Watt. 

“By collaborating with Japan, we can demonstrate how Canadian propane meets the demand for sustainable energy solutions while enhancing energy security in a complex geopolitical landscape.”

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

International shipments of Canadian oil from ports on the U.S. Gulf Coast continue at a steady pace, according to a new report by RBN Energy.

Major buyers in recent months were India and Spain, said analyst Martin King.

These are so-called “re-exports” — oil produced in Western Canada that moves by pipeline or rail through the U.S. to terminals primarily in Port Arthur, Texas.

Citing data compiled by Bloomberg and the U.S. Census Bureau, King said re-exports averaged 117,000 barrels per day in June, the third consecutive month over 100,000 barrels per day.

Re-exports of Canadian oil from the U.S. Gulf Coast have slowed somewhat since the Trans Mountain pipeline expansion came online in May 2024, King said, as China shifts to using closer access via the West Coast.

In addition to export terminals, the U.S. Gulf Coast has the world’s largest cluster of refineries designed to process “heavy” oil, Canada’s main export to the region.

Total U.S. Gulf Coast imports of Canadian oil so far this year have averaged about 400,000 barrels per day, according to the U.S. Energy Information Administration.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

The first pipe is officially in the ground for the natural gas line that will supply the world’s first Indigenous-led LNG project. 

Eight kilometres of steel — known as the Cedar LNG pipeline — will connect the Haisla Nation’s floating LNG export terminal at Kitimat, B.C. to the Coastal GasLink pipeline, delivering natural gas produced nearly 700 kilometres away in the province’s northeast. 

The project posted an image of the new pipeline construction to its social media feeds on July 10. 

First pipe is installed for the Cedar LNG pipeline. Photo courtesy Cedar LNG

The Cedar LNG pipeline connects to Coastal GasLink just outside the fence of the now operational LNG Canada terminal via a new metering station and a short system operated by TC Energy called Cedar Link.  

By enabling the development of Cedar LNG, a partnership between the Haisla and Pembina Pipeline Corporation, the Cedar LNG pipeline project will stand as a landmark in Indigenous ownership within Canada’s resource sector.

It’s the result of a deal engineered by the Nation, whose traditional territory spans the Kitimat coast. 

In fall 2018, as part of a benefit agreement with the LNG Canada project, the Haisla negotiated space on Coastal GasLink for its own LNG project.

That agreement laid the path for Cedar LNG, which started construction in July 2024. 

“I think the uniqueness of Cedar is that it was Indigenous-owned from the beginning,” Haisla Nation chief councillor Crystal Smith said on a recent ARC Energy Ideas podcast.

“[For] a little over 10 years, it’s been in our sight and in our vision.”

Site preparation work to support the Cedar LNG floating terminal. Photo courtesy Cedar LNG

Construction of the $4.6 billion Cedar LNG project is part of what TD Securities analysts called “a new era for Canadian natural gas” ushered in by the recent completion of LNG Canada. 

Since July 1, three separate LNG carriers have left the $18 billion facility with shipments destined for Japan and South Korea.   

“The Western Canadian Sedimentary Basin is on the cusp of experiencing the largest increase in natural gas export volume in its history,” TD Securities said in a research note. 

Pembina said Cedar LNG can help achieve higher prices for Canadian natural gas while enhancing global energy security. 

The company expects it to go into service around 2028. 

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.

We hear about Canada’s aspirations to become an “energy superpower” a lot these days. Easy to say, but what does it really mean? And if Canada can indeed become an energy superpower, how can we achieve that status?

Energy is at the core of everything humanity does. Growing our food, building and running our homes and businesses, making the goods and services we consume, and moving those goods – and ourselves – from place to place. 

Energy security is one of the most important human needs because we can’t live our lives without energy.

But many global citizens don’t have energy security today. Hundreds of millions of people around the world have little or no access to electricity, and billions more don’t have enough electricity to live a basic modern lifestyle. 

Many nations, even rich nations like Japan and Germany, can’t produce enough energy to meet the needs of their own citizens and industries, and have to rely on energy imports of coal, oil, gas, uranium and electricity from their neighbours and trading partners.

Only a few countries – like Canada, the United States, Australia and Saudi Arabia – are energy powers. They have substantial populations with modern, high-energy economies and they produce so much energy that they can export to others. 

But Canada stands out with the potential to be an energy superpower because our energy resources are enormous and diverse, supported by incredible geological riches across the entire country. 

The Global Energy Mix

More than 80 per cent of the energy humanity consumes comes from fossil fuels (oil, natural gas and coal). Long-term trends demonstrate that we will depend on fossil fuels for decades to come. 

Figure 1 shows global primary energy consumption by source for all our needs: electricity, industry, transportation and heat. 

The key to this graph is that we live in a time of energy addition – we’re using more energy from every source, all the time. Nothing is being displaced because there are more people on Earth every year, and each one of us wants a modern, energy-rich lifestyle.

Canada’s unique blessing as a budding energy superpower is that we are or have the potential to be a big player in all major categories of energy production, including oil and gas, nuclear power, hydroelectricity, renewables, lithium, hydrogen and coal. 

Our strength lies in our huge and diverse geological resources. 

Oil and Gas

Leading Canada’s enormous resource base is oil and gas. Geologists have discovered oil and gas in sedimentary basins across western, northern, central and eastern Canada (Fig. 2). 

Regarding oil, people think immediately about Alberta’s oil sands, which give Canada the fourth-largest global oil reserves. These reserves are being systematically and efficiently produced at rates that will support domestic consumption and exports for decades to come. 

We also have substantial oil reserves and production from traditional reservoirs in Western Canada and offshore Eastern Canada, where the Hibernia oilfield is a global supergiant.

But there’s more. These reserves represent only oil that has been discovered and proven economically viable to develop using existing technology. 

Our resource base – oil deposits we have identified but haven’t yet built the infrastructure or technology to access – is huge, diverse and world-leading. 

Canada’s untapped oil resources include untested oil sands plays, oil hosted in shales, undeveloped conventional oil discoveries in the Far North and huge oil resources off our eastern coast that are only now being explored. 

Canada not only supplies all its own oil needs, but it is also the fourth-leading oil exporter in the world today by volume. It has the resources to maintain and improve that position in the long term.

The story is similar for natural gas. 

Our traditional gas reserves were developed decades ago to fill our own needs and for export to the United States. Horizontal drilling and hydraulic fracturing technologies have increased our gas reserves base immensely over the past 20 years as we develop world-class shale gas plays like the Montney Formation in west-central Alberta and northeastern British Columbia. 

And like our oil resources, Canada’s gas resources have grown over time – with shale gas plays holding literally centuries of producing potential in Alberta, B.C., and the Northwest Territories. 

Other plays in Quebec, Ontario and the Maritimes have been mapped and await validation by drilling more wells. And let’s not forget massive but remote conventional gas discoveries and resource potential in the Northwest Territories, offshore Newfoundland and Labrador, and offshore Nova Scotia.

Nuclear Power – Uranium 

Electricity generation from nuclear fission has been an important component of global energy supply since the 1970s, and is rising again today (Fig. 1). Growth is accelerating as more people in more countries appreciate nuclear’s reliability and low emissions profile.

Canada is a nuclear leader with its CANDU nuclear generation technology, but also because of its rich uranium resources. 

Uranium is found in igneous and metamorphic rocks of the Canadian Shield, the geological heart of Central and Eastern Canada (orange area in Fig. 2). We have active mines in northern Saskatchewan and a rich inventory of uranium exploration prospects and resources in Ontario, Manitoba, Saskatchewan and the Northwest Territories (Fig. 3). 

Canada is the world’s second-leading producer and exporter of uranium, supplying our own nuclear reactors and many others across the globe – and has the resource base to improve that position as nuclear demand grows.

The World Nuclear Association has some great information about Canada’s uranium resources at https://world-nuclear.org/information-library/country-profiles/countries-a-f/canada-uranium, and the Canadian Nuclear Safety Commission has more on Canadian uranium mines and mills at https://www.cnsc-ccsn.gc.ca/eng/uranium/mines-and-mills/. 

Hydroelectricity

Canada is also a leader in another energy source high on the global supply chart: hydroelectricity. We produce more than 60 per cent of our electricity from hydro, particularly in British Columbia, Manitoba, Ontario and Quebec. 

Although somewhat indirectly, Canada’s geology is responsible for our rich hydro output and potential because geological processes formed the mountains of Western Canada and the extensive uplands of Eastern Canada that provide the topographic relief that gives energy to water rushing downhill to hydroelectric dams.

Carbon Capture and Storage – and Lithium

Not only do sedimentary rocks in Canada’s sedimentary basins host our fossil fuel resources, they contain immense volumes of highly saline water, much left over from the seas that deposited the sediments millions of years ago. 

This presents two critically important opportunities in today’s evolving energy picture.

The first is carbon capture and storage (CCS), which captures and stores carbon dioxide securely underground to reduce net greenhouse gas emissions. 

We can inject carbon dioxide into subsurface reservoirs where it can replace produced oil and gas, dissolve in the “oceans” of saline brine water, and eventually crystallize to form new minerals deep underground. 

CCS potential exists in all Canada’s sedimentary basins, but particularly in Western Canada, where we already have enormous knowledge and infrastructure in place. 

Alberta has designated 25 potential carbon “hubs” – massive projects to gather carbon dioxide and inject it into the best reservoir rocks. Since 2005, two operating CCS projects in the province (Quest and the Alberta Carbon Trunk Line) have sequestered approximately 15 million tonnes of CO2. 

Illustration showing an example of a hub model with multiple companies injecting into one hub location. Image courtesy Government of Alberta

Studies to assess CCS potential and capacity are underway across the country today, from the B.C. Lower Mainland to sedimentary basins offshore Eastern Canada.

Another potentially enormous energy-related resource in Canada’s sedimentary basins is lithium, a key metal for the production of batteries. Electrification and energy storage are big components of future energy, so demand for batteries – and lithium – is skyrocketing. 

Canadian explorers are global leaders in the effort to produce saline brines, extract the dissolved lithium, and re-inject the brines back into their subsurface reservoirs. The technology, engineering, and most importantly the geological resources to make this possible all exist in Western Canada, with companies looking to start commercial production within the next couple of years.

What About Natural Hydrogen?

Many believe that hydrogen will play an ever-increasing role in the global energy economy. Canada is a big hydrogen producer today, manufacturing hydrogen from natural gas for use in industrial processes, and actively reducing emissions by using CCS. 

But manufactured hydrogen – including green hydrogen made with renewable electricity – isn’t an energy source. It’s simply an energy medium that can be moved around like electricity. 

The real hydrogen energy potential lies in geologic (or “natural”) hydrogen that can be produced from the subsurface in the same way that natural gas is produced. 

So far, the world has one very small producing field, in the West African nation of Mali. 

Canada has geology favourable for natural hydrogen, and a number of properties in BC, Manitoba and Quebec have already been staked for hydrogen exploration and development work. If geologic hydrogen can be proven commercial, Canada will be a leader.

Will Canada Become an Energy Superpower?

Stacks of geological core samples are stored up to 8.5 metres high on specially designed racks at the Alberta Energy Regulator’s Core Research Centre in Calgary. Photo courtesy AER

Canada has excellent potential to become an energy superpower. Our energy resources are enormous and diverse, supported by incredible geological riches across the entire country. 

We’re a world-class exporter of oil, gas, coal, uranium and hydroelectricity. 

Canada has the geologic resources to become even more dominant in all of these, as well as in new areas like carbon storage, lithium extraction and geologic hydrogen.

We have to recognize that while Canada is blessed with immense energy resources, those resources exist in specific places and require specific processes to extract. We can produce oil and gas, coal, uranium (and maybe geologic hydrogen) only from the pools and fields where they occur. 

This is true even more broadly – we can generate hydroelectricity only from the rivers where the water flows, solar electricity only where there’s sufficient sunshine, and wind electricity only where it’s sufficiently windy.

A bigger challenge sometimes is not only accessing and producing the energy resources from the places they exist, but moving them to markets via rail, road, pipeline or transmission line – which of course comes with a whole different set of environmental, financial and social issues.

Will Canada be an energy superpower? We have unparalleled resource opportunities, but there’s still a lot of work to do.

Brad Hayes holds a PhD in geology from the University of Alberta, where he is an Adjunct Professor in Earth and Atmospheric Sciences. He has spent more than 40 years studying and assessing subsurface energy resources.

The unaltered reproduction of this content is free of charge with attribution to the Canadian Energy Centre.