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Last Updated: October 8, 2019
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Overview

  • Canada is one of the world’s top energy producers and is a principal source of U.S. energy imports.

  • Canada is a net exporter of most energy commodities and is a significant producer of natural gas, hydroelectricity, and crude oil and other liquids from oil sands. Energy exports to the United States account for most of Canada’s total energy exports.
  • Canada has abundant and varied natural resources, ranking fourth in 2018 among the top energy producers of petroleum and total liquids in the world, behind only the United States, Saudi Arabia, and Russia. Relatively energy intensive compared with other industrialized countries, Canada’s economy is fueled largely by petroleum and other liquids, natural gas, and hydroelectricity (Figure 1).

Figure 1. Total primary energy consumption in Canada by fuel type, 2018

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Petroleum and other liquids

Canada’s oil sands have significantly contributed to the recent and expected future growth in the world’s liquid fuel supply, and they comprise most of the country’s proved oil reserves, which rank third globally.

Reserves
  • The Oil & Gas Journal estimates that as of January 2019, Canada had 167 billion barrels of proved oil reserves, ranking third in the world.[1] Only Venezuela and Saudi Arabia hold higher reserves. In addition, Canada is one of only 3 countries among the top 10 proved reserves holders that is not a member of the Organization of the Petroleum Exporting Countries (OPEC).
Production and consumption
  • In 2018, Canada was the world’s fourth-largest petroleum and other liquids producer and was a net exporter of oil. Nearly all of its crude oil exports are destined for the United States because Canada lacks sufficient export capacity to send its liquids elsewhere.
  • Canada is a major producer of crude oil. Bitumen and upgraded synthetic crude oil produced from the oil sands of Alberta have driven recent growth in Canada’s liquid fuels production. Most of Canada’s proved oil reserves and the expected future growth in the country’s liquid fuels production will be derived from these resources.
  • Canada produced 5.3 million barrels per day (b/d) of petroleum and other liquid fuels in 2018, an increase of more than 300,000 b/d from the previous year. Crude oil (including condensate) accounted for 4.3 million b/d, and the remainder was produced as biofuels, natural gas, and other natural gas liquids (NGL) (Figure 2). Canada’s production is expected to grow modestly in 2019 and 2020 because of export capacity constraints and mandatory production curtailments set by the government of Alberta.

Figure 2. Canada liquid fuels production and consumption

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Refining
  • According to the Canadian Association for Petroleum Producers (CAPP), Canada has 17 refineries with a total crude oil processing capacity of 2.0 million b/d.[2] Eastern Canada’s eight refineries have 1.2 million b/d of capacity or about 60% of total crude oil refining capacity.[3] Because the eastern refineries are not as well connected to domestic crude oil production supplies, these refineries are more dependent on imported crude oil. Western Canada’s nine refineries have a total capacity of 748,000 b/d. In 2018, Phase One of the North West Redwater’s Sturgeon Refinery came online, which is the first refinery built in Canada since 1984.[4]
  • According to Natural Resources Canada, Canadian production of petroleum products reached 1.9 million b/d in 2018.[5] Most petroleum products are refined into motor gasoline (42%) and diesel fuel oil (30%).[6]
Exports and imports
  • Nearly all of Canada’s crude oil exports were sent to the United States in 2018 (see Figure 3). Currently, the largest regional market in the United States for Canadian crude oil exports is the Midwest where almost all Canadian crude oil exports originate from Western Canada.
  • Canada is the largest source of U.S. crude oil and refined products imports. Crude oil imports from Canada accounted for 48% of total U.S. crude oil imports in 2018, averaging 3.7 million b/d. Refined products imported from Canada accounted for 582,000 b/d, or 27% of total U.S. petroleum product imports.
  • Currently, producers face a complex set of market and logistical challenges. Oil supply in Western Canada exceeds the transport capacity of pipelines serving external markets. As export pipelines operate at full capacity and timing of new capacity remains uncertain, producers are increasingly relying on rail transportation to deliver incremental production to the market. The highest monthly volume imported to the United States from Canada was in January 2019 at 406,000 b/d, compared with a total average of 238,000 b/d in 2018.

Figure 3. Canada crude oil exports by destination, 2018

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Natural gas

Canada is one of the world’s largest producers of dry natural gas and is the source of most U.S. natural gas imports.

Reserves
  • The Oil & Gas Journal,[7] Canada held 72 trillion cubic feet (Tcf) of proved natural gas reserves at the end of 2018. Most of Canada’s natural gas reserves are traditional resources in the Western Canadian Sedimentary Basin (WCSB), including those associated with the region’s oil fields. Other areas with significant natural gas reserves include offshore fields near the eastern shore of Canada (primarily Newfoundland and Nova Scotia), the Arctic region, and the Pacific coast.
Production and consumption
  • In 2018, Canada produced 5.9 Tcf of dry natural gas and was the fourth-largest producer behind the United States, Russia, and Iran (see Figure 4). Most of Canada’s natural gas production occurs in the prolific WCSB. Although Canadian production of conventional natural gas has been declining, the production of Canadian unconventional natural gas has been rising.
Exports
  • Almost all of Canada’s natural gas exports go to the United States. In 2018, 97% of all U.S. natural gas imports came from Canada. Most of Canada’s natural gas exports to the United States originate in Western Canada and are shipped to U.S. markets in the West and Midwest regions.

Figure 4. Canada's dry natural gas production and consumption

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Electricity
  • Canada generated an estimated 651 billion kilowatthours (kWh) of electricity in 2017, of which about 60% was hydroelectric. Only China and Brazil produce more hydroelectricity than Canada.[8] Fossil fuel and nuclear plants satisfy most of Canada’s electricity needs not met by hydroelectricity (see Figure 5).
Trade
  • The United States imported 52 million megawatthours (MWh) of electricity from Canada in 2018, primarily into the Northeast and Midwest, and exported 73 million MWh, nearly all of which was from the Pacific Northwest. Canada is a net exporter of electricity to the United States, which accounts for a small, although locally important, share of bilateral trade.

Figure 5. Electricity generation by fuel, 2018

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Coal

As government policy attempts to lower domestic coal consumption, up to 50% of Canada’s coal production is exported.

Reserves
  • Canada’s total proved coal reserves stood at about 6.6 billion short tons in 2018.[9] More than 60% of the reserves are anthracite and bituminous coal. The remaining reserves are subbituminous and lignite coal.[10] Coal resources are located across the country, but they are actively mined and produced in only Alberta, British Columbia, and Saskatchewan.
Production and consumption
  • In 2017, Canada produced 68 million short tons of coal, a slight increase compared with the previous year. About 50% of Canada’s coal production is consumed domestically, a significant departure from more than a decade ago when Canada consumed nearly all of its domestic coal production.
  • In 2018, 49% of coal consumed in Canada was metallurgical coal used for steel manufacturing, and 51% was thermal coal used for electricity generation. Coal generates 9% of total electricity in Canada. In 2018, the government of Canada announced regulations to phase out traditional coal-fired electricity by 2030.[11]
Trade
  • Canada exports about half of its coal production. In 2018, Canada was the world's third-largest exporter of metallurgical coal after Australia and the United States. [12] Most of Canada's coal exports go to Asia.

Canada EIA petroleum Reserves production consumption refining exports imports natural gas electricity coal
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The United States consumed a record amount of renewable energy in 2019

In 2019, consumption of renewable energy in the United States grew for the fourth year in a row, reaching a record 11.5 quadrillion British thermal units (Btu), or 11% of total U.S. energy consumption. The U.S. Energy Information Administration’s (EIA) new U.S. renewable energy consumption by source and sector chart published in the Monthly Energy Review shows how much renewable energy by source is consumed in each sector.

In its Monthly Energy Review, EIA converts sources of energy to common units of heat, called British thermal units (Btu), to compare different types of energy that are more commonly measured in units that are not directly comparable, such as gallons of biofuels compared with kilowatthours of wind energy. EIA uses a fossil fuel equivalence to calculate primary energy consumption of noncombustible renewables such as wind, hydro, solar, and geothermal.

U.S. renewable energy consumption by sector

Source: U.S. Energy Information Administration, Monthly Energy Review

Wind energy in the United States is almost exclusively used by wind-powered turbines to generate electricity in the electric power sector, and it accounted for about 24% of U.S. renewable energy consumption in 2019. Wind surpassed hydroelectricity to become the most-consumed source of renewable energy on an annual basis in 2019.

Wood and waste energy, including wood, wood pellets, and biomass waste from landfills, accounted for about 24% of U.S. renewable energy use in 2019. Industrial, commercial, and electric power facilities use wood and waste as fuel to generate electricity, to produce heat, and to manufacture goods. About 2% of U.S. households used wood as their primary source of heat in 2019.

Hydroelectric power is almost exclusively used by water-powered turbines to generate electricity in the electric power sector and accounted for about 22% of U.S. renewable energy consumption in 2019. U.S. hydropower consumption has remained relatively consistent since the 1960s, but it fluctuates with seasonal rainfall and drought conditions.

Biofuels, including fuel ethanol, biodiesel, and other renewable fuels, accounted for about 20% of U.S. renewable energy consumption in 2019. Biofuels usually are blended with petroleum-based motor gasoline and diesel and are consumed as liquid fuels in automobiles. Industrial consumption of biofuels accounts for about 36% of U.S. biofuel energy consumption.

Solar energy, consumed to generate electricity or directly as heat, accounted for about 9% of U.S. renewable energy consumption in 2019 and had the largest percentage growth among renewable sources in 2019. Solar photovoltaic (PV) cells, including rooftop panels, and solar thermal power plants use sunlight to generate electricity. Some residential and commercial buildings heat with solar heating systems.

October, 20 2020
Natural gas generators make up largest share of U.S. electricity generation capacity

operating natural-gas fired electric generating capacity by online year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Based on the U.S. Energy Information Administration's (EIA) annual survey of electric generators, natural gas-fired generators accounted for 43% of operating U.S. electricity generating capacity in 2019. These natural gas-fired generators provided 39% of electricity generation in 2019, more than any other source. Most of the natural gas-fired capacity added in recent decades uses combined-cycle technology, which surpassed coal-fired generators in 2018 to become the technology with the most electricity generating capacity in the United States.

Technological improvements have led to improved efficiency of natural gas generators since the mid-1980s, when combined-cycle plants began replacing older, less efficient steam turbines. For steam turbines, boilers combust fuel to generate steam that drives a turbine to generate electricity. Combustion turbines use a fuel-air mixture to spin a gas turbine. Combined-cycle units, as their name implies, combine these technologies: a fuel-air mixture spins gas turbines to generate electricity, and the excess heat from the gas turbine is used to generate steam for a steam turbine that generates additional electricity.

Combined-cycle generators generally operate for extended periods; combustion turbines and steam turbines are typically only used at times of peak load. Relatively few steam turbines have been installed since the late 1970s, and many steam turbines have been retired in recent years.

natural gas-fired electric gnerating capacity by retirement year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Not only are combined-cycle systems more efficient than steam or combustion turbines alone, the combined-cycle systems installed more recently are more efficient than the combined-cycle units installed more than a decade ago. These changes in efficiency have reduced the amount of natural gas needed to produce the same amount of electricity. Combined-cycle generators consume 80% of the natural gas used to generate electric power but provide 85% of total natural gas-fired electricity.

operating natural gas-fired electric generating capacity in selected states

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Every U.S. state, except Vermont and Hawaii, has at least one utility-scale natural gas electric power plant. Texas, Florida, and California—the three states with the most electricity consumption in 2019—each have more than 35 gigawatts of natural gas-fired capacity. In many states, the majority of this capacity is combined-cycle technology, but 44% of New York’s natural gas capacity is steam turbines and 67% of Illinois’s natural gas capacity is combustion turbines.

October, 19 2020
EIA’s International Energy Outlook analyzes electricity markets in India, Africa, and Asia

Countries that are not members of the Organization for Economic Cooperation and Development (OECD) in Asia, including China and India, and in Africa are home to more than two-thirds of the world population. These regions accounted for 44% of primary energy consumed by the electric sector in 2019, and the U.S. Energy Information Administration (EIA) projected they will reach 56% by 2050 in the Reference case in the International Energy Outlook 2019 (IEO2019). Changes in these economies significantly affect global energy markets.

Today, EIA is releasing its International Energy Outlook 2020 (IEO2020), which analyzes generating technology, fuel price, and infrastructure uncertainty in the electricity markets of Africa, Asia, and India. A related webcast presentation will begin this morning at 9:00 a.m. Eastern Time from the Center for Strategic and International Studies.

global energy consumption for power generation

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)

IEO2020 focuses on the electricity sector, which consumes a growing share of the world’s primary energy. The makeup of the electricity sector is changing rapidly. The use of cost-efficient wind and solar technologies is increasing, and, in many regions of the world, use of lower-cost liquefied natural gas is also increasing. In IEO2019, EIA projected renewables to rise from about 20% of total energy consumed for electricity generation in 2010 to the largest single energy source by 2050.

The following are some key findings of IEO2020:

  • As energy use grows in Asia, some cases indicate more than 50% of electricity could be generated from renewables by 2050.
    IEO2020 features cases that consider differing natural gas prices and renewable energy capital costs in Asia, showing how these costs could shift the fuel mix for generating electricity in the region either further toward fossil fuels or toward renewables.
  • Africa could meet its electricity growth needs in different ways depending on whether development comes as an expansion of the central grid or as off-grid systems.
    Falling costs for solar photovoltaic installations and increased use of off-grid distribution systems have opened up technology options for the development of electricity infrastructure in Africa. Africa’s power generation mix could shift away from current coal-fired and natural gas-fired technologies used in the existing central grid toward off-grid resources, including extensive use of non-hydroelectric renewable generation sources.
  • Transmission infrastructure affects options available to change the future fuel mix for electricity generation in India.
    IEO2020 cases demonstrate the ways that electricity grid interconnections influence fuel choices for electricity generation in India. In cases where India relies more on a unified grid that can transmit electricity across regions, the share of renewables significantly increases and the share of coal decreases between 2019 and 2050. More limited movement of electricity favors existing in-region generation, which is mostly fossil fuels.

IEO2020 builds on the Reference case presented in IEO2019. The models, economic assumptions, and input oil prices from the IEO2019 Reference case largely remained unchanged, but EIA adjusted specific elements or assumptions to explore areas of uncertainty such as the rapid growth of renewable energy.

Because IEO2020 is based on the IEO2019 modeling platform and because it focuses on long-term electricity market dynamics, it does not include the impacts of COVID-19 and related mitigation efforts. The Annual Energy Outlook 2021 (AEO2021) and IEO2021 will both feature analyses of the impact of COVID-19 mitigation efforts on energy markets.

Asia infographic, as described in the article text


Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)
Note: Click to enlarge.

With the IEO2020 release, EIA is publishing new Plain Language documentation of EIA’s World Energy Projection System (WEPS), the modeling system that EIA uses to produce IEO projections. EIA’s new Handbook of Energy Modeling Methods includes sections on most WEPS components, and EIA will release more sections in the coming months.

October, 16 2020