Canada has considerable natural resources and is one of the world’s largest producers and exporters of energy. In 2004, Canada produced 18.6 quadrillion British Thermal Units (Btu) of total energy, the fifth-largest amount in the world. Since 1980, Canada’s total energy production has increased by 81 percent, while its total energy consumption has increased only by 40 percent; in contrast, total world energy production increased by 54 percent during 1980-2004. Almost all of Canada’s energy exports go to the United States, making it the largest foreign source U.S. energy imports: Canada is consistently among the top sources for U.S. oil imports, and it is the largest source of U.S. natural gas and electricity imports. In total for 2006, Canada exported to the United States 2.3 million barrels per day (bbl/d) of oil and petroleum products (11 percent of U.S. supply), 3.6 trillion cubic feet of natural gas (16 percent of U.S. supply), and 41.2 billion kilowatthours of electricity (1 percent of U.S. supply). Recognizing the importance of the energy trade between the two countries, both participate in the North American Energy Working Group , which seeks to improve energy integration and cooperation between Canada, the U.S., and Mexico.

In 2004, the largest source of energy consumption in Canada was oil (33 percent), closely followed by natural gas (25 percent) and hydroelectricity (25 percent). Both coal (9 percent) and nuclear (7 percent) constitute a small share of the country’s overall energy mix. Over 1984-2004, the share of oil in total energy consumption has remained mostly constant, whereas natural gas has increased from 21 percent to 25 percent: most of the increase in natural gas consumption has come at the expense of coal, whose share of total energy consumption fell from 12 percent to 9 percent over that time period.