In an increasingly unstable world, the need for a robust North American energy alliance to ensure energy security, propel economic growth, achieve climate goals and keep geopolitical foes at bay may seem more urgent than ever. However clear the benefits may be for Canada, the U.S., and Mexico, which already share a highly integrated energy system, some observers say fraying trilateral trade relations and conflicting domestic priorities have dimmed prospects for a strategic alignment on energy. Others say building Fortress North America is not only necessary but possible, and the moment is now.
By David H. Coburn
The last time North America’s leaders met, they agreed on the need to build regional supply chains to promote economic security by protecting the highly integrated economies of Canada, the U.S. and Mexico – an easy layup given still-fresh memories of pandemic-era bottlenecks and rising geopolitical tensions. Thornier issues related to drugs, immigration and energy, including different approaches to climate change and Mexico’s policies restricting foreign investment in its energy sector, went unresolved.
Still, the January 2023 “Three Amigos” summit in Mexico City generated enough positive feeling for the editorial board of the Los Angeles Times to wax eloquent in defense of the alliance that has expanded prosperity for all three partners since its inception in 1994 as the North American Free Trade Agreement (NAFTA), now the Canada-U.S.-Mexico Agreement (CUSMA).
“Of course, the U.S., Mexico and Canada have their own needs and interests – and political challenges,” the Times wrote. “But the North American partnership is too important and presents too many valuable opportunities to be sidelined by frosty relations. The summit should be a reminder of how much the countries can accomplish together.”
Fast forward nearly three years, and such optimism seems sadly at odds with the current reality. With new leadership installed in Ottawa, Washington, D.C., and Mexico City, trade liberalization and trilateral cooperation have taken a backseat to bilateral jockeying in the wake of U.S. President Donald Trump’s imposition of tariffs on its two largest trading partners, including a threatened 10% levy on Canadian oil and natural gas that has enjoyed zero-tariff status under both NAFTA and CUSMA.
The growing trade rift, combined with the rise of energy nationalism in Mexico and conflicting domestic agendas in each country, has cast a shadow over the long-sought vision of a “Fortress North America” that holds the promise of ensuring the continent’s energy independence and economic prosperity, mitigating threats from hostile foreign actors and helping each partner meet their climate obligations.
One observer, writing in “The Elgar Companion to North American Trade and Integration” published in February 2025, calls the potential for such a robust energy alliance “an image in the rear-view mirror,” with the strong trilateral cooperation of the early 2000s that inspired the “Three Amigos” moniker now a relic of the past, replaced by “something more like three bilateral acquaintances in the 2020s.”
Indeed, since Trump’s initial tariff salvo shortly after returning to office last January, Canada has been actively courting separate energy partnerships with Mexico that could benefit both nations. Meanwhile, questions about the fate of CUSMA, approved in 2020, continue to linger with the U.S. declining to commit to renewing the three-way pact, which is due for a mandated review next summer.
Others, including international energy policy expert Damjan Krnjević Mišković, offer a more sanguine outlook on the prospects for creating an energy-secure Fortress North America. While noting the current political challenges, partnering to achieve energy security is clearly one of those opportunities too valuable to be derailed by “frosty relations,” as the Times put it. It’s a goal that is not only necessary but within the continent’s grasp, given its vast resources of oil, gas, critical minerals, technology and investment capital – as well as a cross-border system of energy infrastructure that is already deeply interconnected.
Krnjević, a Canadian former senior UN official who grew up in Montreal and is now Professor of Practice in Contemporary Geopolitics at ADA University in Baku, Azerbaijan, defines energy security as a fundamental requirement of development and the “indispensable predicate to just about everything else citizens and governments want to do” – from building strong economies at home to sharing their abundant resources in a way that helps allies and trading partners achieve their own energy security and reduce greenhouse gas emissions by replacing dirtier sources of energy.
“No country in the world – at whatever stage it’s in – can develop, or develop further, without a reliable, resilient, affordable, and abundant energy system,” Krnjević said. “You can’t be prosperous in any sustainable sense without assuring, as much as possible, your energy security. It would be geopolitical malpractice not to do everything in our power – we North Americans, so, we Canadians and our American and Mexican neighbors, together – to acquire and maintain energy self-sufficiency, autonomy, and security … in other words, energy sovereignty and energy independence. I simply don’t see how we can accomplish this strategic imperative by discriminating against the use of natural gas, oil, and other homegrown energy sources. Our abundant hydrocarbon resources are strategic national assets, not liabilities. Our policy makers need to encourage the further building-up of relevant transport and storage infrastructure, including pipelines, to get more affordable, efficient, and secure energy sources into our homes, our businesses, our factories, our data centers, and our ports for export abroad.”
With collaboration on energy languishing – North America’s three energy ministers haven’t met since 2017 – and Trump’s trade policies calling into question the future of the CUSMA pact, free-trade proponents across the continent are echoing the call for a renewed effort to work together. The Business Council of Canada and its counterparts, the U.S. Chamber of Commerce and Mexico’s Consejo Coordinador Empresarial in May issued “North American Energy Security: A Proposal for Greater Cooperation” calling on Canada, the U.S. and Mexico to pursue development of a “North American energy alliance” that focuses on maximizing shared energy security, economic and geopolitical interests.
“North America is uniquely positioned to leverage its natural resources and deeply integrated energy markets to enhance energy security and the economy in the years ahead,” the group said in its proposal. “Enhanced and formalized cross-border collaboration under the auspices of a North American energy alliance would provide an enduring framework to cement the continent’s role as a global energy powerhouse.”
Energy integration runs deep
The interconnected nature of North America’s energy markets and infrastructure – with sprawling networks of oil and gas pipelines and electric power grids intersecting borders from Canada through the U.S. and into Mexico – by itself makes energy security a matter that is best addressed on a trilateral basis, rather than as a purely national or bilateral concern, despite headwinds posed by ongoing tariff threats and other nontariff barriers affecting energy trade between the three CUSMA partners.
“Is North American energy security necessary? Yes. And the reason is pretty straightforward: Our energy systems are highly integrated. So even if a hostile actor or hostile state focuses on undermining American energy security, such actions will have deleterious effects – unavoidably so – on Canada and, to a slightly lesser extent, Mexico,” Krnjević said. “This, in turn, means that it’s necessary for all three North American countries to pull themselves together in response. The continent is uniquely positioned as a virtual geographic standalone with phenomenal resources – things that can allow it to ensure the hostile actors cannot succeed.”
North America currently produces 30% of the world’s oil and gas, with the U.S. at No. 1 in both oil and gas production as well as the leading exporter of oil and gas, in the past two years becoming the top exporter of liquefied natural gas (LNG). Canada is the world’s fourth-largest producer of oil and No. 5 in natural gas production. Mexico ranked No. 11 in oil production and No. 20 in natural gas production in 2024.
Just as significant is the high degree of energy interdependence that binds together the fortunes of all three nations, particularly Canada and the U.S. Canada is the second-largest trading partner of the U.S. with 2024 two-way trade of $917 billion, including $150 billion in energy trade, which has ballooned by more than half from nearly $100 billion in 2010. Canada accounts for 60% of U.S. oil imports, sending heavy crude south to U.S. refineries primarily in the Midwest.
The two-way flow of natural gas between the U.S. and Canada, enabled by a sprawling pipeline network that connects more than eight Canadian provinces and 10 U.S. states through 27 border crossings, exemplifies the magnitude of integration across North America’s energy systems. Canadian gas is delivered to the U.S., with 73 billion cubic metres going to key markets including the West Coast, Midwest, and Northeast in 2023. At the same time, Canada receives U.S. gas, with Eastern Canada relying on deliveries of 25 billion cubic metres of U.S. natural gas imported from the Midwest and Northeast.
In all, 13 U.S. states rely on imported natural gas from Canada for at least 30% of their natural gas supply, according to a tariff impact analysis conducted by the Canadian Gas Association in January 2025. On average, nearly 60% of the gas entering these states originates from Canada, with that percentage ranging from as low as 30% in states like California and Iowa all the way up to 100% in states like Montana and Vermont.
Nearly all of these states use gas for at least one-quarter of their total energy end-use, along with using it to generate electricity. In addition, Canada is also the leading exporter of electrical power to the U.S., providing more than 90% of U.S. electricity imports across 35 transmission lines in 2023, with nearly two-thirds of the total generated using clean hydroelectric power.
The extensive natural gas pipeline network has also opened new markets for Canadian natural gas producers that are now supplying gas to major U.S. LNG exporters such as Cheniere Energy, making it possible for Canadian natural gas to reach overseas markets even before LNG Canada’s Kitimat, B.C, export facility shipped its first LNG cargo in mid-2025. Such arrangements have helped North America support European and Asian allies in their effort to shore up their own energy security by eliminating reliance on Russian natural gas in the aftermath of Russia’s invasion of Ukraine in 2022.
Though smaller in scale, the U.S.-Mexico energy trade – $66.5 billion in 2023, less than 10% of the $946 billion in total two-way trade between the two countries – again relies on a heavily interconnected energy system. Mexico imports more than 70% of the natural gas it uses from the U.S. through cross-border pipelines, as well as a range of petroleum products such as gasoline, diesel fuel, and propane. On the energy export side, Mexico sends crude oil produced by its state-owned oil company, PEMEX, north to the U.S., and also exports a small amount of electricity to its northern neighbour via cross-border transmission lines.
While Canada’s energy trade with Mexico has been negligible, prospects for growing the bilateral energy trade and further integrating North America’s energy markets are increasing. The “Canada-Mexico Action Plan” announced by Prime Minister Mark Carney and Mexico’s President Claudia Sheinbaum in September seeks to develop opportunities to work together on energy projects that can help meet Mexico’s fast-growing demand for natural gas to satisfy power generation and industrial needs.
For example, Mexico’s new West Coast LNG liquefaction and regasification facility, Energia Costa Azul, on the Pacific in Baja California, could open up a new market for Canada’s rapidly expanding LNG export capacity while helping Mexico develop and decarbonize its economy and, at the same time, reduce its reliance on U.S. natural gas supplies.
One thing is clear: Demand for North American energy is surging both at home and abroad. With natural gas demand for power generation and direct use skyrocketing across North America – driven by economic growth, widespread electrification, ongoing retirement of coal-fired generation and the explosion in power requirements for AI data centers – the Three Amigos and their allies will need more energy, not less, to ensure their energy security, making close collaboration more important than ever.
‘All of the above’ approach key
To advance the vision of Fortress North America, however, proponents recognize energy security has to begin at home with much-needed policy reforms at the national level in all three countries to remove barriers to development of natural resources and investment in infrastructure for both renewable and low-carbon non-renewables if the continent is to ensure its primacy as a global energy powerhouse.
The Business Council of Canada’s “North American energy alliance” proposal, for example, advocates an “all of the above” approach that “directs private and public investment and policy support toward projects that strengthen short- and long-term energy security and resilient supply chains” – including expanding LNG exports and other energy exports on both west and east coasts.
The proposal also calls for a North American regulatory task force “responsible for developing a common vision for identifying and expeditiously approving and permitting infrastructure and facilities that strengthen the combined resiliency of North America’s energy and critical mineral supply chains, with a specific emphasis on cross-border infrastructure and integrated supply chains.”
U.S.-based think tank Atlantic Council, in a whitepaper entitled “North America’s Moment: The case for North American energy cooperation,” also acknowledges the key role of natural gas in energy transition and calls streamlining licensing and permitting processes across the three countries “essential” to maximizing energy security, meeting climate obligations and bolstering economic growth.
Both recommendations are a direct rebuke of policies that have stalled development of Canada’s energy resources over the past decade – including the Impact Assessment Act, the industrial carbon tax, the tanker ban, and the emissions cap – and allowed the U.S. to “beat Canada to the puck” in the LNG export race, as Enbridge CEO Greg Ebel put it in a speech to the Empire Club of Canada in Toronto in October.
Krnjević, who helped launch the negotiations that led to the adoption of the UN 2030 Agenda for Sustainable Development and has been intimately involved in the UN’s recent climate change conferences, including COP29 held last year in Baku, is also among those who has argued for a Canadian “‘all of the above’ approach to energy: all fuels, all technologies, all systems, and more,” as he wrote in an August 2025 paper for the MacDonald-Laurier Institute. “Transforming our country into an ‘energy superpower’ requires treating hydrocarbons as an integral part of a comprehensive, single-standard, and non-discriminatory energy strategy,” he added. Krnjević is also among those who unequivocally reject the “climate maximalist” ideology behind such policies that consider developing Canada’s hydrocarbon resources and reducing carbon emissions linked to climate change to be mutually exclusive objectives.
In fact, the opposite is the case. The rapid expansion of Mexico’s natural gas infrastructure has allowed it to replace dirtier fuels used in power generation, transportation and industrial applications. Looking beyond North America, developing countries all over the world need cleaner sources of energy, including natural gas, to replace inefficient, unhealthy fuels such as open fire, coal, dung, wood and crop residue, and to drive economic development.
Krnjević points out that Canada’s climate obligations include contributing to a USD$300 billion fund agreed to at COP29 to help developing countries implement climate mitigation or adaptation measures and says Canada’s ample natural gas supplies and growing LNG export capacity need to be part of the solution to reducing emissions not only in those countries but also in heavy-emitting developed countries globally.
“The low-hanging fruit on emissions reductions within North America is in Mexico, and the rapid development of that country’s energy resources is the best way to get that fruit quickly,” Krnjević said. “Beyond that, the reality is that the biggest emission reduction opportunity is going to be by moving North American energy to global markets, and North American technology to global markets, and both those things require faster economic development in North America.”
Despite the fact that North America accounts for 30% of global energy demand, the continent contributes less than half that – about 14.3% – to global greenhouse gas (GHG) emissions, according to Krnjević, who calls North America’s record on environmental performance “one of its greatest strengths” and “one that should be considered part of the ‘Fortress North America’ asset base.”
The United States and Mexico have also joined in putting a thumb on the scale, picking energy winners and losers and adopting policies that have stymied trilateral cooperation and blocked integration of energy systems. In the U.S., cancelling the Keystone XL pipeline project and pausing LNG permitting come to mind. Mexico continues to play favourites with its state-owned electricity and oil companies with policies that limit much-needed foreign investment in energy infrastructure – including renewable energy projects – by denying government permits needed to connect to the national grid.
“Policy makers should stop saying one end use or another and should encourage all fuel delivery systems – electric, gaseous, liquid, even solid – so that there is more competition and more energy available to all,” Krnjević said. “Energy feeds prosperity. Policy makers telling Canadians which type of energy to use impedes our prosperity without in any significant way moving the needle on global emissions reductions. Why on earth would we do something like that?”
Energy security versus ‘America First’?
Putting aside the cross-border chaos created by Trump’s tariff tantrums, his campaign promise to achieve U.S. energy dominance, and his professed indifference to the future of the 31-year-old trilateral trade partnership, observers say the broader goal of North American energy security is not incompatible with the president’s “America First” agenda.
In the final analysis, Fortress North America – enabled by a “whatever works” strategy of developing North America’s oil and gas resources, renewables, nuclear and low- or no-carbon fuels including blue and green hydrogen, and facilitating the free flow of energy and investment across borders – remains an attainable vision because a robust energy alliance serves each of the Three Amigos’ national interests.
Building a continental clean-energy supply chain, for example – leveraging Canada’s abundant supply of critical minerals and Mexico’s potential as a processing hub – would reduce U.S. vulnerability to China’s recent threats of export controls and lessen similar risks for Canada and Mexico. It would also serve the goal laid out at the 2023 summit of creating regional supply chains to bolster economic security.
As Enbridge’s Ebel reminded his Empire Club audience: “Energy security is now national security and economic security.”
Behind his bluster about scrapping CUSMA and slapping tariffs on Canadian oil and gas, Trump has a “pretty solid understanding of energy” and the key role the trilateral partnership – and the trade liberalization, market access and integration successive trade agreements have fostered – has played in America’s energy success story, according to Krnjević.
“The U.S. President is a deal maker. He wants better deals,” Krnjević said. “He will negotiate hard because he is a good negotiator, and he is well-briefed by Chris Wright, his excellent Energy Secretary, and others on just how significant the value proposition is across the continent on energy, and how working with Canada and Mexico on it helps the U.S.”
Operating on the fundamental principles of diplomacy – finding common ground, addressing conflicting interests, and promoting cooperation – can the Three Amigos advance North American energy security in the face of American jingoism, climate maximalism in Canada and energy nationalism in Mexico? Krnjević is hopeful.
“America’s energy dominance is best served by having two friendly integrated neighbours, both of whom are energy-rich in their own right, so really we’re talking about North American energy dominance,” Krnjević said. “Just look at the flows of energy back and forth between Canada and the U.S. It is an incredibly efficient relationship and could become even more so. Mexico promises the same, as that country continues to build out its infrastructure even more. The real question is what can we do to increase that already high level of integration and cooperation.”