Canadian natural gas exports to the United States shrank last year to their smallest volume since 1995 as rival American shale supplies grew, according to trade records kept by the U.S. Department of Energy.
Pipeline flows from Canada into the U.S. fell to 2.722 Tcf in 2014, off by 5% from 2.867 Tcf in 2013 and down by 29% from the peak of 3.853 Tcf hit in 2007, according to DOE’s natural gas regulatory activities division.
The latest annual gas trade scorecard registers dramatic effects of U.S. shale supply development since 2007 with horizontal drilling and hydraulic fracturing, especially from the Marcellus and Utica formations in Pennsylvania, West Virginia and New York State.
"The ‘Shale Gas Revolution’ has dramatically changed the U.S. natural gas import-export outlook,” reports the regulatory division, which grants trade permits and monitors industry performance with them.
In the West, the pattern of the continental gas trade has changed little, with Canadian exports flowing at rates of 2.6 Bcf/d in 2007, 2.8 Bcf/d in 2010 and 2.7 Bcf/d in 2014.
The revolution shows in the U.S. Middle West, where Canadian pipeline deliveries shrank over the past seven years by 38% from 3.7 Bcf/d in 2007, to 2.7 Bcf/d in 2010 and 2.3 Bcf/d in 2014.
Rapid upheaval in the gas trade is recorded in the U.S. Northeast, where Canadian exports all but vanished by plunging by 86% from 2.9 Bcf/d in 2007 to 1.6 Bcf/d in 2010 and 0.4 Bcf/d in 2014.
The trend also shows in U.S. exports to Canada, which all go from the Marcellus-Utica region north into Ontario and Quebec.
U.S. northbound exports stayed strong in 2014, losing only 15.5% to 769.3 Bcf from 910.5 Bcf in 2013, despite pipeline toll changes that restored a competitive edge to Alberta gas and a mild start to the heating season last fall compared to the “polar vortex” deep freezes a year earlier.
On the western side of the North American continent, the U.S. shale gas revolution mainly shows in rising exports to Mexico, with no counterpart to the almost complete erasure of Canadian exports into the northeastern states.
U.S. gas exports to Mexico rose by 9.9% to 723.3 Bcf in 2014 from 658.4 Bcf in 2013, almost tying the northbound pipeline deliveries into Canada last year.
Also thanks to fracking exploitation of shale deposits, overall U.S. reliance on imported gas has dropped sharply.
“2008 saw the reversal of a recent trend in the importance of imports, and this has continued in every year since,” according to the DOE report. “In 2007, net imports peaked at 16.4% of annual U.S. gas consumption, largely due to increasing LNG imports. In 2014, net imports were a smaller fraction -- 4.8% -- of U.S. gas consumption than at any time since 1987.”
The value of the North American gas trade increased on all fronts last year.
The annual average price fetched by Canadian production at the U.S. border rose by 39.6% to US$5.11/MMBtu in 2014 from US$3.66 the year before.
The value of American pipeline deliveries north to Canada increased by 46.4% to US$5.99/MMBtu in 2014 from US$4.09 in 2013. U.S. exports to Mexico fetched US$4.66 in 2014, up 19.3% from US$3.99 in 2013.