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Home > Statistics > 2008 Natural Gas Exports and Imports Summary

2008 Natural Gas Exports and Imports Summary

Canadian Natural Gas Exports & Imports at a Glance

	2006	2007	2008
Volumes (billion m3)
Exports	99.8	107.5	103.2
Imports	9.7	13.2	15.9
Net (Exports - Imports)	90.1	94.3	87.4
Average Price (Cdn$/GJ)
Exports	7.15	6.80	8.41
Imports	7.68	7.16	8.61
Value (Cdn  billions)
Exports	27.2	27.8	33.1
Imports	2.8	3.6	5.2
Net Revenue (Exports - Imports)	24.4	24.3	27.9

Volumes

Figure 1: Canadian Natural Gas Gross Export Volumes 1999-2008

• Gross exports from Canada to the United States (U.S.) fell from their highest level on record in 2007 to 103.2 billion m³ (3,643 Bcf) in 2008. This represents a four per cent, or 4.3 billion m³ (152 Bcf), drop from the previous year.

Figure 2: Canadian Natural Gas Import Volumes 1999-2008

• Natural gas imports into Canada increased for the second year in a row in 2008, growing to 15.9 billion m³ (561 Bcf). This represents an increase of 20 per cent, or 2.7 billion m³ (95 Bcf), from 2007.

Figure 3: Canadian Natural Gas Net Export Volumes 1999-2008

• With gross exports down, and higher imports, net natural gas export volumes fell to their lowest since 2003. The net volume of natural gas exported in 2008 was 87.4 billion m³ (3,084 Bcf). This represents a decrease of 6.9 billion m³ (244 Bcf) from 2007, the steepest year over year decline in five years.
• Net exports in 2008 remain well below record levels set during the 2000-2002 period, when volumes were close to 99 billion m³ (3,495 Bcf) per year.

Figure 4: Gross Export Volumes by Region

• More than 45 per cent of gross Canadian natural gas exports went to the U.S. Midwest. The Northeast U.S. received 27 per cent of gross exports. Exports to the Midwest slowed the most in 2008, dropping by 7.1 per cent, or 3.7 billion m³ (132 Bcf) from 2007, although exports declined in three of the four major importing regions.
• The Pacific Northwest was the only region that saw an increase in Canadian gas in 2008, expanding imports by a billion m³ (35 Bcf) from 2007, a 14.5 per cent increase.

Prices and Revenues

• The average price received by Canadian exporters increased from $6.80/GJ in 2007 to $8.41/GJ in 2008. Likewise, Canadian importers paid higher average prices for natural gas – $8.61/GJ in 2008 compared with $7.16/GJ in 2007.
• Canadian exporters received $33.1 billion in total revenue in 2008; a sizable increase over the $27.8 billion received in 2007 and the second highest year for revenues on record, after $35.6 billion in 2005. This is despite a four per cent decrease in export volumes.
• Canadian natural gas importers' total cost for 2008 was $5.2 billion, up 45 per cent from the previous year.

Figure 5: Canadian Natural Gas Export Revenue, Import Expense and Prices 1999-2008

Commentary

After falling to their lowest annual average in four years during 2007 ($6.80/GJ), export gas prices began to recover in the first half of 2008, peaking at over $10/GJ in the months of May, June and July. Prices fell steeply in the later half of the year in conjunction with the economic slowdown, falling oil prices and climbing storage levels.

Estimated Canadian marketable gas production decreased by 2.1 billion m³ (74 Bcf) from 2007 to 2008. This explains some of the 4.3 billion m³ (152 Bcf) drop in gross exports. Increased utilization of natural gas for the extraction and processing of synthetic crude within the Alberta oil sands also left less natural gas available to be exported.

In the 2007 Natural Gas Exports and Imports Summary, the NEB noted a discrepancy between net exports reported to the NEB by industry and throughput numbers available from pipeline operators. Since then, some revisions to pipeline throughput data provided by companies resolved the issue.  

Outlook

• Several factors are currently shaping the market outlook for Canadian natural gas exports to the U.S. in 2009. We continue to expect downward pressure on export volumes and revenues as a result of the following factors:
  • The pronounced slowdown of the global economy has been accompanied by a steep drop in commodity prices, including natural gas. Gas prices continued their downward trajectory in the early months of 2009, sinking even further below levels seen in late 2008. The NEB does not expect 2009 average export prices to be as high as 2008 average prices.
  • Lower prices have begun to reduce conventional drilling and subsequently production in the Western Canadian Sedimentary basin (WCSB), which has been declining steadily in recent years. This could reduce the amount of gas available for export.
  • Unconventional gas production in the U.S. has increased significantly, increasing the amount of natural gas available domestically in the U.S. and could reduce demand for Canadian gas exports.
  • With lower expected prices and export volumes, the NEB does not expect 2009 net revenues to increase from 2008.
  • Canada remains a willing and able exporter of natural gas to the U.S.; however, slowing demand and excess U.S. domestic supplies will likely reduce the demand for Canadian gas in the U.S. in the near-term.
• Strong import volumes to Canada could continue, although economic forces could impact import levels:
  • New pipeline developments, such as Rockies Express pipeline, that bring more U.S. gas via existing connections to southern Ontario (where the vast majority of Canadian imports are destined), represents a good opportunity for buyers to diversify their supply sources. Likewise, high levels of production of U.S. unconventional gas could leave more gas available to be imported into Canada.
  • Economic weakness could reduce demand in Canada's industrial sector, reducing the need for imports of natural gas from the U.S.
  • While encouraging supply and transportation developments will help Ontario access more diverse gas supplies, imports ultimately will be governed by demand for gas.
• The National Energy Board will continue to monitor these evolving market conditions, including more immediate market influences such as weather, water levels for hydro generation and hurricane activity.

 

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Date Modified:

2011-12-05