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For immediate release
May 9, 2013

National Energy Board expects a holding pattern for Canada's natural gas producers

CALGARY – The National Energy Board (NEB or Board) released its natural gas deliverability energy market assessment indicating that Canadian natural gas producers are undertaking minimal natural gas drilling activity as current prices do not cover the full costs of developing most natural gas prospects.

In the report, Short Term Natural Gas Deliverability 2013-2015, the NEB examines trends for natural gas deliverability in Canada (the ability to produce natural gas from new and existing wells). The three key supply and demand drivers influencing future Canadian natural gas deliverability include:

  • Minimal drilling activity because prices do not cover the costs of developing most natural gas prospects.
  • Growth in natural gas as a by-product from developing oil and natural gas liquids (NGLs)-rich prospects.
  • Producers are not earning sufficient returns to attract additional equity investment with current prices of around $3.00/MMBtu in Western Canada.

This report includes lower, mid and high range price cases for natural gas based on varying market factors. A mid-range price case would see moderate growth in North American natural gas demand, coupled with declining Canadian natural gas deliverability and slowing U.S. supply growth, gradually reducing excess deliverability in North American natural gas markets.

The Board projects annual Canadian natural gas prices could be $3.60/GJ by 2015 and sustain drilling for NGL-rich gas and incent the beginnings of some return to dry gas drilling. Canadian natural gas deliverability would fall to 353 106m³/d (12.5 Bcf/d) by 2015, down from 396 106m³/d (14.0 Bcf/d) in 2012.

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The National Energy Board is an independent federal regulator of several parts of Canada's energy industry with the safety of Canadians and protection of the environment as its top priority. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest. For more information on the NEB and its mandate, please visit the National Energy Board website.

For further information:

Media Relations Team
National Energy Board
Telephone (toll free): 1-800-899-1265

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