Prospects for Cooperation and Trade of Energy Resources Between the United States and Canada

Because Canada and the United States are each other's largest trading partner, occupy the same continent, and share a stake in the future of Western democracies, the interdependencies have expanded into the area of energy. In March 1979, the two countries agreed to deal cooperatively with mutual energy problems. The Canadian Government, in cooperation with private industry, began to be concerned with energy problems long before the 1973 Arab oil embargo. A National Energy Board was established in 1959, and 2 years later a national oil policy was formulated to assist in the development of western Canadian oil. The pressure of increasing U.S. demand on Canadian supplies forced the Canadian Government to begin controlling exports in March 1973. In 1976, the Canadians published "An Energy Strategy for Canada" which established goals to: (1) raise domestic oil and natural gas prices toward world levels; (2) increase exploration and development activity; (3) establish a conservation program; (4) maintain natural gas self-sufficiency; and (5) educate the public. From 1973 to 1978 Canada supplied the United States with about 5 percent of its total gas supply. However, questions of continued supply are imminent since most licenses to export to the United States expire in the mid-to-late 1980s.