Canadian natural gas : review of 1997 and outlook to 2005

North American and Canadian natural gas industry trends, such as supply, demand, storage, gas flows, prices and transportation capacities are summarized. The focus is on regional natural gas markets, as the issues of natural gas price differentials, gas market integration and the need for large expansions of natural gas pipeline capacity between markets will continue to hold center stage. Analysis of trends indicate that in 1997, the Canadian natural gas industry continued to be one of the two most important supply regions in North America although natural gas demand growth was weak (+0.3 per cent) due to a mild winter. Supply growth kept pace with poor demand growth. It was noted that over the next eight years, gas demand is expected to increase by an average annual rate of 2 per cent, down from the recent pace of 3 per cent annually. The sectors of the economy that are expected to lead the growth will be electricity generation and industrial use. The largest new demand will be seen in the U.S. Gulf Coast, Midwest, West, Northeast, and South Atlantic. Prices are expected to remain volatile but will not return to the low prices of 1995. Prices are expected to stay close to finding and development costs. The demand analysis provided much detail on the drivers of gas consumption by sector for each region in Canada and the United States. A regulatory analysis section was also included, given that recent regulatory events will have notable effects on natural gas markets. The National Energy Board and the U.S. Energy Information Administration were the main sources of statistical information, but private consultants, industry association and other federal government agencies in Canada and the U.S. also provided information. 19 refs., 12 tabs., 43 figs