Chu told a Calgary business audience Friday that the energy debate between the two countries has been dominated by a single issue — the Keystone XL oil pipeline and the oilsands crude that would run through it.
"It's unfortunately become a lightening rod that's helped polarize lots of discussions," he said.
The Nobel Prize-winning physicist said Canada and the U.S. should work together on hydroelectric and wind energy and boost transmission infrastructure between the two countries.
"Canada is blessed with incredible hydro resources. We have hydro resources in parts of the United States," he said.
"I would dearly love to see the hydro resources used well and for more trade of hydroelectricity back and forth between the United States and Canada."
On Keystone XL, Chu says the oilsands' impact on global climate change must be taken into consideration in President Barack Obama's decision on whether to let the more than $5.4-billion project go ahead.
Chu praised Alberta's $15-per-tonne carbon pricing regime, the proceeds of which are invested in a technology fund.
He said he understands the arguments in favour of Keystone XL, but that the oilsands' carbon footprint is a concern.
"That's why I think what Alberta's doing with regard to that is an important point that should be brought to the attention of the White House," Chu said.
Former Conservative environment minister Jim Prentice, now a senior executive at CIBC, agreed that there is room for Canada and the U.S. to work together on some aspects of renewable energy.
For instance, the two countries can harmonize their transmission grids, and both have substantial hydroelectric resources.
But any agreement has to recognize the different circumstances between the two countries, Prentice said.
"When you talk about the resources that we have in renewables, the two countries are quite different. Canada does not get enough recognition for this, but Canada actually has one of the cleanest electricity systems anywhere in the world. Between 70 and 80 per cent of Canada's electricity system emits no carbon whatsoever," he said.
"Those are stats that the Americans can never achieve. They just don't have the resource base to do it."
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