U.S. Taking More Canadian Gas Amid Cold Snap

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land Texas)

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Summary

U.S. imports of Canadian natural gas hit a record during the weekend amid a brutal cold snap. A net exporter to the U.S., the surge comes even as bilateral ties hit a new low.

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Canadian Gas Supporting U.S. Demand

With more than half of the United States under some form of winter weather advisory, data from IIR Energy show Canadian gas imports are near record highs and helping to address the surge in demand.

"Winter Storm Ferm is in full swing, driving significant volatility in the natural gas market over the weekend," Maria Sanchez, a senior natural gas analyst at IIR Energy, wrote in the NATGAS Today report for Monday. "Arctic temperatures are pressuring supply through widespread freeze-offs while sharply increasing heating demand."

Natural gas demand for heating is at levels not seen since Winter Storm Elliot left some 1.5 million people without power in 2022. Rolling blackouts were common across much of the U.S. south.

The PJM Interconnection, a regional transmission organization that provides power to customers in all or parts of 13 eastern U.S. states and the District of Columbia, was expecting an all-time record for demand at about 144,450 megawatts (MW) on Monday.

Henry Hub, the U.S. benchmark for the wholesale price of natural gas, was up nearly 5% in early Monday trading to hit $3.80 per million British thermal units, higher than the expected average of $3.38 for the first quarter of the year.

With sub-freezing temperatures in the U.S. south, impairments in Louisiana, Oklahoma and Texas combined to bring net U.S. gas production down about 10 billion cubic feet (Bcf) from Friday's levels, IIR Energy reported.

Helping to cover the shortage, net imports from Canada were around 9.5 Bcf on Monday. Month-ago levels were closer to 5.83 billion cubic feet per day (Bcf/d), and hit a record on Saturday at 10.69 Bcf.

The support from Canada comes amid deepening fissures in the historically friendly relationship with the United States. The return of Donald Trump to the U.S. presidency for a second, non-consecutive term in office came with acrimony. Trump last year hinted that Canada should join the United States amid bitter tariff disputes.

Canada Looking Elsewhere for Trade

Since then, Canadians have largely boycotted U.S. goods and travel to the United States. A recent handshake on trade between China's Xi Jinping and Canadian Prime Minister Mark Carney was met with a 100% tariff threat by Trump on all Canadian imported goods.

Apart from natural gas, Canada is the largest foreign supplier of crude oil to the U.S. economy by far, with levels of around 4 million barrels per day (BBL/d) accounting for 60% of the U.S. crude oil imports.

Carney has since clarified that recent agreements with China were related to lowering tariffs and not a free-trade deal. Nevertheless, bilateral ties remain fragile.

Last week, U.S. Treasury Secretary Scott Bessent told conservative influencer Jack Posobiec that Alberta is a "natural partner" for the United States amid ongoing provincial independence efforts. A signature drive runs through May.

An independent Alberta would complicate provincial and national efforts to diversify trade. Carney is working to halve U.S. trade to buffer against Trump's protectionist policies, while the provincial government of Alberta is backing a new crude oil pipeline to support additional exports from British Columbia.

A website launched recently by the provincial government of Alberta advocates for the so-called Northwest Coast Oil Pipeline, noting that Calgary-based energy companies Enbridge, Trans Mountain and South Bow are serving on an advisory committee.

The provincial government said it expects to submit the project to the federal government for designation as a national priority by July. Carney last year proposed reviving the Keystone XL oil pipeline through the United States for more possible exports, though U.S. tariffs on steel and aluminum could complicate construction.

As of now, the Trans Mountain oil pipeline is the only artery capable of deliveries outside North America. An expansion project completed in May 2024 nearly tripled the capacity on the 36-inch, 720-mile Trans Mountain system to a total of 890,000 BBL/d.

The federal Canadian government said crude oil exports to countries other than the U.S. have more than tripled since the expansion project was completed.

By the Numbers

• 9.5 Bcf in Canadian gas on Monday
• 10.69 Bcf set a record during the weekend
• 5.83 Bcf/d was the month-ago average

Key Takeaways

• Canadian gas supporting swell in U.S. demand
• The United States is a net importer of Canadian gas
• Canada is looking to halve U.S. trade

About IIR News Intelligence IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI). About Industrial Info Resources Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).