FORT ST. JOHN, B.C. – A new report says Canada’s natural gas exports will continue to decline over the next few years with no sign of a return to the highs of the past decade.
The Canadian Energy Research Institute says exports will drop largely because of the steep increase in cheaper natural gas production in the United States where Canada has traditionally exported its gas.
Yesterday’s report said the US, already the world’s largest gas producer, could become a net exporter of gas by next year and is set to increase gas production by 72% over the next 20 years.
The Institute says in Western Canada, which accounts for the vast majority of Canadian natural gas production, as low prices weigh on production, pipeline exports will drop to as low as one billion cubic feet per day in 2020, before rebounding to three billion cubic feet by 2037.
The drop in Western Canadian exports is on top of an already steep drop from a high of about 11 billion cubic feet per day in 2006 to an estimated four billion cubic feet per day this year.
The Institute also says Eastern Canada will see a production drop because of a combination of high costs and the fracking bans in Quebec and New Brunswick.
Despite the drop in exports, the study notes Canada could still be a net exporter of natural gas in 20 years, and exports could total six billion cubic feet per day by 2037, especially if some of the proposed liquefied natural gas projects go ahead.
The study assumes LNG exports of about four billion cubic feet per day starting around 2021, but notes again no projects have yet received final approval to start construction.
Total Canadian production is expected to increase from 14.4 billion cubic feet per day in 2015 to 21 billion cubic feet per day over the next 20 years, with an increase in domestic consumption part of that growth.