Natural gas for power generation in Canada: Long term supply/demand and transportation issues

The use of natural gas for power generation in Canada is reviewed. Natural gas has many advantages as a fuel for electrical generation. It is cleaner environmentally, is abundant in supply, and is expected to remain abundant in the long term, especially when the untapped frontier areas and the potential for unconventional and coalbed methane gas resources in Canada are considered. Gas prices are very competitive and are expected to remain so in a deregulated environment. Gas supply costs are expected to remain relatively low given lower price outlooks and current and expected advances in exploration and development technology. The total economics of gas-fired combined cycle compare very favourably with coal and oil. Gas-fired plants are easier to site, are smaller, more efficient, and have shorter lead times to construct. Gas supply contracts and gas transportation arrangements can be tailored to fit the specific needs of the power generator, and have about a 2 year lead time. As a result, gas is best positioned to fill gaps in generation requirements if demand side management programs are not as successful as forecast. TransCanada Pipelines has much experience in the provision of transportation services to the power generator sector and welcomes the opportunity to meet the needs of power generators. 15 figs