US Customs Agency Seeks to Adopt Blockchain Technology to Track Oil Imports from Canada - Blockchain.News

US Customs Agency Seeks to Adopt Blockchain Technology to Track Oil Imports from Canada

With the advancement of technology, the importance of oil and gas resources in promoting global social and economic progress is rising.

  • Nov 12, 2019 07:00
US Customs Agency Seeks to Adopt Blockchain Technology to Track Oil Imports from Canada

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With the advancement of technology, the importance of oil and gas resources in promoting global social and economic progress is rising.

As oil and gas resources play an imperative role in the energy sector, the technologies of the industry have also developed quickly in recent years. It can be seen that the oil and gas industry is gradually developing towards the direction of automation, digitalization, and intellectualization. 

But the management model of this industry is relatively old. The industry is characterized by multi-party cooperation and investment, and high risk of inefficiency, error, and fraud in transactions. Also, the slow exchange of critical data, inefficient trade negotiation process, and high third-party management costs are seen in the oil and gas trade.

However, the management model of the oil and gas industry is changing to address these problems.  Key players within the industry have recognized blockchain technology as having the potential for use in the field.

The latest developing news indicates that US Customs and Border Protection has announced its intention to adopt and integrate blockchain to track natural gas and oil imports from Canada. It is a federal agency of the Department of Homeland Security (DHS).  

Now let’s understand the details of the U.S customs agency’s blockchain project.   

Blockchain funding

The department’s research and development unit – the science and technology directorate – has awarded $182,700 to Mavennet Systems Inc., – a Canadian blockchain firm – for the initiative.

Mavennet will develop a blockchain platform that will enable the U.S customs agency to track and audit oil and natural gas trading markets in Canada in real-time.

Canada is the fourth-largest producer of oil in the world. The country exports about 3.5 million barrels of crude oil each day to the U.S., majorly via pipeline.

Mavennet blockchain platform

Mavennet systems have developed a blockchain platform for commercial oil markets in Canada. The platform allows real-time audits of natural gas and oil trading there.

The Mavennet systems will be integrated into the Customs agency. In this way, Mavennet will build a generic end-to-end platform, which the agency can adapt to track various imported commodities. The platform includes API integration and automation and the capacity to adapt to legacy systems.  

The department’s technical director – Anil John – mentioned that the system will not only offer digital auditability , but also support emerging worldwide commercial oil consortium standards for verifiable credentials and decentralized identifiers for blockchain use.

He said that accurate tracking of oil imports with the right composition and nation of origin and oil flow through refinement and pipelines between Canada and the U.S are of huge interest to the U.S customs agency.

The contracting process

This initial development award is the Phase 1 contract, which is a three-to-six-month long proof-of-concept. The contract looks for promising distributed ledger technologies and blockchain which could fill common needs across the Department of Homeland Security’s wide agency missions.

If the platform operates successfully in Phase 1, it would progress through four development phases that could eventually lead to its operational testing in various environments at DHS, after pilots and demonstrations.

The agreement continues the customs agency’s efforts to exploit emerging technology. During the past spring, the agency took public input on its 21st Century Customs Framework to process imported cargo. Shippers and lawmakers urged it to apply artificial intelligence and blockchain technology in that effort.    


Blockchain technology continues to make its inroads within the oil and gas industry. U.S customs agency has finally joined the list of several energy giants, which are investing in the development of this technology.


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