At a moment when Canada-U.S. trade relations are becoming increasingly confrontational, one longstanding piece of cross-border commerce is quietly continuing. A U.S. Department of Energy authorization allowing a California public-energy organization to import Canadian natural gas took effect September 26, 2026, extending permission for pipeline imports for another two years.
The authorization covers up to 1 billion cubic feet of Canadian natural gas for ABAG Publicly Owned Energy Resources. It is modest beside the enormous gas flows that already cross the border, but its timing is notable. Washington and Ottawa have imposed new tariffs on each other, additional U.S. restrictions are approaching, and businesses face renewed uncertainty. Natural gas, however, remains tied to a deeply integrated North American energy system that has so far continued operating through the political dispute.
What Actually Took Effect on September 26
The U.S. Department of Energy issued Order No. 5476 on September 15 after ABAG Publicly Owned Energy Resources applied on August 24. The order authorizes the organization to import as much as 1 billion cubic feet, or 1 Bcf, of natural gas from Canada by pipeline at any point along the Canada-U.S. border. The authorization runs from September 26, 2026, through September 25, 2028. ABAG is a California joint powers authority headquartered in San Francisco.
The wording matters. This is a blanket import authorization rather than an order requiring one billion cubic feet to begin flowing immediately. It does not represent approval for a new cross-border pipeline, nor does the 1 Bcf figure represent daily capacity. Instead, it sets the maximum amount ABAG may import during the two-year authorization period. The organization must submit monthly reports to the Energy Department even when no imports occur, with its first report under the renewed authority due October 30.
The Authorization Is Really a Continuation of Existing Trade
The September 26 start date may sound like the beginning of a new Canadian gas arrangement, but the federal records show something much more routine. ABAG was already operating under a nearly identical Department of Energy authorization. Order No. 5168, issued in September 2024, allowed it to import up to 1 Bcf of Canadian natural gas between September 26, 2024, and September 25, 2026. The new order began the next day, avoiding a gap in federal authorization.
That history changes how the development should be interpreted. Washington has not suddenly opened the door to a large new stream of Canadian energy in response to market pressure. Instead, an established buyer has received permission to keep doing what it was already permitted to do. The 2024 order itself noted an earlier ABAG authorization that ran through September 25, 2024, showing that Canadian gas access has been part of the organization’s procurement framework for several years.
One Billion Cubic Feet Sounds Larger Than It Is
One billion cubic feet is a substantial amount of energy for an individual purchasing program, but it is extremely small compared with normal Canada-U.S. gas trade. U.S. Energy Information Administration data show that the United States imported approximately 226.8 Bcf of Canadian natural gas by pipeline in June 2026 alone. In January, during the winter heating season, Canadian pipeline imports were approximately 328.6 Bcf. Almost all U.S. pipeline gas imports in those months came from Canada.
Against those figures, ABAG’s entire two-year authorization is equivalent to less than half of one percent of the Canadian pipeline gas the United States received in June alone. It should therefore be viewed as a procurement authorization rather than a meaningful expansion of U.S. import capacity. That distinction is especially important when discussing the order against the much larger trade dispute. The symbolism of continued Canadian energy access may be interesting, but the permitted volume is nowhere near large enough to reshape North American natural gas markets by itself.
U.S. Law Gives Canadian Gas a Different Regulatory Path
The authorization also demonstrates why energy trade can continue even when relations in other sectors deteriorate. Section 3 of the U.S. Natural Gas Act requires federal authorization before natural gas can be imported or exported. However, the law gives different treatment to natural gas moving between the United States and countries covered by qualifying free-trade agreements. Imports from those countries are deemed consistent with the public interest, and qualifying applications are to be granted without modification or delay.
The Energy Department explicitly relied on that provision when approving ABAG’s application. Its September order states that the requested Canadian imports satisfy the requirements of Section 3(c) and are therefore considered consistent with the public interest. In other words, this was not a discretionary political decision to favour Canada during the current dispute. It flowed from the existing U.S. statutory framework governing natural-gas trade with qualifying free-trade partners. That framework remains an important stabilizing feature of the integrated energy relationship.
The Buyer Is a Public-Energy Purchasing Organization
ABAG Publicly Owned Energy Resources, commonly known as ABAG POWER, is not a large private natural-gas producer or multinational trading house. It was established by the Association of Bay Area Governments and local governments to pool energy procurement. Its natural-gas program serves nearly 40 public agencies and purchases conventional natural gas for participating municipal and public-sector facilities in Pacific Gas & Electric’s distribution territory.
Those customers can include cities, counties, special districts, schools and other public organizations. ABAG says facilities served through the program include community centres, hospitals, police and fire stations and other municipal buildings. Its stated objectives include greater price stability and lower procurement costs than participating agencies might achieve separately. That makes the Canadian import authorization particularly practical rather than geopolitical: it provides another federally authorized route through which the purchasing pool can obtain gas. The authorization does not guarantee Canadian supply will always be the cheapest option, but it keeps that option legally available.
The Timing Comes During a Much Bigger Tariff Escalation
What makes the gas authorization noteworthy is the environment surrounding it. Canada says the United States imposed 50 percent tariffs on C$27.6 billion worth of Canadian goods beginning August 22. Ottawa responded with counter-tariffs of 15, 25 and 50 percent on C$27.6 billion of U.S. imports beginning September 8, targeting sectors including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. Those figures come from the Canadian government’s description of the measures.
Washington has also announced additional restrictions. A September 8 presidential proclamation states that specified Canadian motor-vehicle-related products are to be excluded from U.S. importation beginning September 29, replacing the 50 percent additional duty on the affected products. Separate proclamations apply similar restrictions to certain Canadian dairy and alcoholic-beverage products. The U.S. administration and Canadian government dispute responsibility for the breakdown in negotiations, but both sides’ official measures confirm that the conflict has moved well beyond rhetoric.
Natural Gas Still Connects the Two Economies at Enormous Scale
Canadian gas remains far more important to the United States than the ABAG order alone suggests. According to the Canada Energy Regulator, Canada exported an average of 8.6 Bcf per day of natural gas in 2025, excluding LNG Canada shipments, and nearly all of that pipeline-oriented volume went to the United States. Those U.S.-bound exports were valued at approximately C$12.5 billion. Canada supplied close to 100 percent of U.S. natural-gas imports that year.
The relationship also runs in both directions. Canada imported approximately 2.5 Bcf per day of natural gas in 2025, with 92.4 percent coming from the United States, according to the regulator. Those imports were worth about C$3.6 billion. Geography and decades of pipeline construction have created regional markets that do not neatly follow the international border. Western Canadian gas moves south, while parts of Central and Eastern Canada can receive U.S. supplies. The result is an energy network in which both economies remain commercially connected despite wider political tension.
Winter Shows Why Canadian Supply Can Matter More
Cross-border natural-gas movements can change significantly with the seasons. EIA statistics show U.S. pipeline imports from Canada at approximately 328.6 Bcf in January 2026, falling to about 216.5 Bcf in April before rising slightly to 226.8 Bcf in June. Individual entry points stretch from Idaho and Montana to Minnesota, New York, Vermont and Washington, illustrating how Canadian gas feeds several regional U.S. markets rather than a single national destination.
The January figure works out to more than 10 Bcf per day on average, highlighting the role Canadian supply can play when heating demand is high. The pattern also helps explain why routine import authorizations continue to be issued even in a difficult political environment. Utilities and public-sector buyers plan procurement around reliability, transportation capacity, storage, price and seasonal demand. Those physical requirements do not disappear because tariff negotiations deteriorate. For organizations purchasing gas for hospitals, government buildings or other public facilities, continuity of supply remains a day-to-day operational issue rather than an abstract trade-policy question.
Canada Is Also Building Routes That Bypass the U.S. Market
The other major shift is occurring on Canada’s Pacific Coast. LNG Canada began exporting liquefied natural gas from Kitimat, British Columbia, in June 2025, giving western Canadian producers direct access to overseas customers. The Canada Energy Regulator says LNG Canada exports averaged 0.295 Bcf per day across 2025 despite beginning only midway through the year, with those shipments going to East Asia.
That diversification has accelerated. Natural Resources Canada reported in September 2026 that roughly 130 LNG tankers travelled from Canada to Asian markets between June 2025 and August 2026, carrying the equivalent of approximately 470 Bcf of natural gas. Ottawa says Canadian LNG exports to Asia are now running at roughly one million tonnes per month. Canadian officials are simultaneously promoting additional LNG relationships in the Indo-Pacific and Europe. None of that eliminates Canada’s enormous pipeline relationship with the United States, but it does give Canadian producers something they historically lacked: meaningful access to large customers beyond North America.
Energy Integration Is Surviving a More Uncertain Trade Relationship
The new authorization ultimately tells two stories at once. The first is mundane: a California public-energy organization received a two-year continuation of permission to import a relatively small amount of Canadian gas. The second is larger. Even as tariffs spread into major industries and additional U.S. import restrictions approach, some of the institutional machinery behind Canada-U.S. energy trade continues functioning largely as before. Pipelines, utility procurement programs and decades-old regulatory rules cannot easily be separated from the broader continental economy.
That does not mean energy is insulated from the dispute. The Bank of Canada says renewed U.S. tariffs and threats of additional measures have increased uncertainty and could weigh on investment, hiring and economic activity. Its September deliberations noted that the new tariffs directly cover roughly 5 percent of Canadian goods exports to the United States. Against that backdrop, the ABAG order is less a breakthrough than a reminder: political trade barriers are rising, but Canada and the United States remain deeply connected by infrastructure and commercial relationships that continue operating underneath the conflict.
