Many U.S. natural gas and oil operators may view overseas demand as the best option for growth, particularly for liquefied natural gas (LNG), but Canada continues to be the largest source of domestic energy imports and the second only to Mexico for exports, the Energy Information Administration (EIA) said Friday.

“In 2019, based on the latest annual Standard International Trade Classification data from the U.S. Census Bureau, energy accounted for $85 billion, or 27%, of the value of all U.S. imports from Canada,” said EIA researchers led by principal contributors Natalie Kempkey and ShaMyra Sylvester.

Natural gas trade between the United States and Canada, dominated by pipeline shipments, accounted for almost all (98%) of Lower 48 gas imports last year, EIA said. Historically, the United States has imported more gas than it has exported by pipeline.

Even with a burgeoning LNG export market in the United States, natural gas imports from Canada in 2019 totaled 7.4 Bcf/d and were valued at an estimated $6 billion.

“Most of the natural gas the United States imported from Canada originated in Western Canada and was shipped to U.S. markets in the West and Midwest regions. U.S. natural gas exports to Canada mainly go into the eastern provinces of Canada,” where provincial authorities have stymied exploration and development across Atlantic Canada.

“The United States exported $23 billion worth of crude oil, petroleum products, natural gas and electricity to Canada in 2019, about 8% of the value of all U.S. exports to Canada and the second-highest level recorded after peaking in 2014,” researchers said.

Crude and petroleum products last year accounted for 91% of the value of domestic energy imports from Canada and 89% of the value of exports to the north, EIA noted.

Domestic oil imports from Canada accounted for more than half (56%) of all oil imports to the United States last year, averaging 3.8 million b/d, up from 3.7 million b/d in 2018.

The United States last year exported 459,000 b/d of crude to Canada, the largest destination for domestic exports.

“U.S. crude oil exports to Canada are typically light, sweet grades that are shipped to the eastern part of the country,” EIA noted. “U.S. crude oil imports from Canada tend to be heavy and are sourced from oilsands in Alberta (Western Canada), and most of these exports flow to U.S. Midwest refineries.”

Crude trade by rail also has become more attractive “because pipeline capacity in Canada has at times been insufficient to accommodate Canada’s growing crude oil production,” researchers noted.

“Consequently, U.S. imports of Canada’s crude oil by rail have more than tripled from an average of 91,000 b/d in 2016 to an average of 300,000 b/d in 2019. More than half of the crude oil volume imported by rail (171,000 b/d) went to the U.S. Gulf Coast region.”

Petroleum trade between the United States and Canada has remained “relatively balanced” in volume and value, EIA said.

“Canada is the largest source of U.S. petroleum and refined products imports,” researchers said. “In 2019, the United States imported a record 610,000 b/d of petroleum products from Canada, or 26% of all U.S. petroleum product imports last year. These imports were valued at more than $14 billion.”

Meanwhile, electricity accounts for a small but “locally important” share of U.S.-Canada energy trade, EIA noted.

“The electricity systems of both countries are fully interconnected markets, and they share more than 30 major cross-border electric transmission lines, which also supports electric system reliability,” researchers said.

Last year, the United States imported an estimated 52 million MW hours (MWh) from Canada and exported 14 million MWh.

“The Pacific Northwest is a primary source of electricity exports to Canada, and most electricity imported into the United States from Canada goes to states in the Northeast,” EIA noted.

Meanwhile, President Trump joined Canada and Mexico earlier this year in signing the U.S.-Mexico-Canada Agreement, aka USMCA, the revamped North American Free Trade Agreement, which is to take effect in July.

EIA said the International Trade Commission has determined that the “USMCA will likely have little effect on U.S.-Canada energy trade.”