The United States is likely to remain partly reliant on Canada for oil and gas on its road to energy independence, Canadian Natural Resources Minister Joe Oliver told CNBC in an interview this week.
Both the U.S. and Canada are emerging players in the worldwide natural gas export market. A U.S. shale boom is helping the world's biggest energy consumer become less reliant on energy imports, but "the U.S. will still need Canada," Oliver said.
Shale gas development is booming around the world, and countries are seeking to capitalize on its benefits. Much like the U.S., Canada is a newcomer to the liquid natural gas (LNG) export game, having shipped a mere 2 million cubic feet abroad last year, according to the U.S. Energy Information Administration.
That could make the country an LNG rival with the U.S., which according to EIA data now absorbs 99 percent of Canada's natural gas imports.
Oliver acknowledged the competition between the two close allies, particularly as the U.S. greenlights new LNG export terminals. Just last week, the U.S. approved a new LNG export terminal, which comes just as Vancouver, British Columbia, is building a new facility of its own.
"Our two countries cooperate tremendously. But we compete with each other [on the world stage] from time to time," Oliver said on the sidelines of a conference in New York. "There's a huge shale boom in the U.S., and clearly we need to diversify our markets."
Both of North America's economic powerhouses are eclipsed on the world stage by countries such as Qatar, Australia, Malaysia and Russia-all of which are among the most dominant of the 17 countries that export natural gas.
A prime target for Canadian LNG exports is Asia's $150 billion market, where Japan and South Korea consume more than half of the world's natgas stocks, according to the International Gas Union, a natural gas trade group that represents 95 percent of global natgas exporters.
Underscoring the stakes, the organization says LNG trade has surged by 36 percent in the past five years alone, and is set to grow further
While U.S. natural gas is cheaper and more abundant, Canada's political and regulatory environment has been friendlier to the shale boom than the one in America has. John Brynjolfsson, chief investment officer at Armored Wolf, an investment management firm, said the U.S. should "unshackle the industry from restrictions based on protectionist tendencies or unjustified environmental concerns."
One of the key concerns about the shale boom continues to draw controversy over hydraulic fracturing, or fracking, which extracts natural gas from the ground. Environmental groups warn the procedure could contaminate drinking water or cause earthquakes.
Recently, some have drawn a link between earthquakes in Ohio-where natgas development is booming-and fracking. Objections over the process have hamstrung the proposed construction of the Keystone XL pipeline, an artery designed to ship oil and gas between Canada and the U.S.
However, Oliver insisted to CNBC that "the public is comfortable" with the process, renewing a call for the U.S.to end its five-year hold on the Keystone project.
-By CNBC's Javier E. David.
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