Partners in power: the United States' long energy relationship with Canada runs deep and wide.

• Author: Durkay, Jocelyn
• Position: ENERGY

When it comes to energy, Canada is much more than just the good neighbor to the north. Canada is the United States' largest foreign supplier of oil, natural gas and hydroelectricity, according to the U.S. Energy Information Administration.

With concern about the need to achieve energy independence, it's good to be reminded that the United States and Canada share one of the most integrated energy markets in the world, encompassing the production and distribution of resources and an interconnected electric grid.

Although the current debate and controversy over expanding the Keystone pipeline could complicate the relationship, it remains "a strong one, an interrelated one," says Montana Senator Elsie Arntzen (R), "not only involving the supply of energy, but also supplying a workforce."

This collaborative relationship helps further North American energy independence and promotes economic security by directly supporting thousands of jobs in the energy industry on both sides of the border. In 2010, the exchange of petroleum products and natural gas between the two countries totaled nearly $100 billion.

"The energy relationship between Canada and the United States has been crucial to our countries' economic successes in the past and will be an important part of North American energy security going forward," says Marcy Grossman, Denver-based Canadian Consul General.

Although many dynamics of this mutually beneficial relationship occur at the federal level, state lawmakers also play a crucial role. State and local policies regulate extraction, generation and production of energy resources in both countries, including streamlining permitting and determining state taxes and fees. States also play a role in manufacturing the various equipment needed in energy production and extraction.

For example, lawmakers in the Northeast determine if Canadian hydropower is eligible for meeting state renewable energy requirements. In the West, Montana legislators convened representatives from industry, local communities and law enforcement to discuss how best to encourage an increase in processing and transporting crude oil while minimizing the impact on local communities.

Some states benefit economically from processing Canadian natural gas or using Canadian hydroelectricity, while others benefit from having a stable market in which to sell their energy resources. And all states benefit from having a friendly neighbor from which to buy energy.

It's Mutual

Energy resources--from petroleum, natural gas and coal to hydropower and nuclear power--and the electricity they produce flow in both directions.

Canadian hydropower helps states in the Northeast and Midwest meet their energy needs. Canadian uranium fuels U.S. nuclear production. U.S. coal has flowed to Canada for decades.

Natural gas flows in both directions based on the proximity of shale deposits in one country to processing facilities and large population centers on the other side of the border. In 2012, the United States imported almost 3 trillion cubic feet from Canada, and exported almost 10 billion cubic feet back to the neighbor to the north.

But petroleum products dominate the relationship. In...