With only one month left to finish their annual scorecard, Canadian natural gas exporters are poised to chalk up a return to better times after a bruising fall.

At this time in 2009, trade records kept by Canada's National Energy Board (NEB) were showing across-the-board plunges. Volumes of pipeline deliveries to the United States were down by 10.4% for the 11 months of November 2008 through September 2009. The average gas price at the international border was down by 49.7%. Revenues were slashed by 54.8%.

Now the scorecard is a paint-by-numbers portrait of an industry that has virtually arrested its decline and on some fronts shows signs of making a comeback.

For the first 11 months of the 2009-2010 contract year, the tailspin by export volumes has slowed to a marginal 1.8% dip, coming in at 3.015 Tcf compared to 3.071 Tcf for the same period of 2008-2009.

The average price fetched by Canadian gas at the border has improved by 4.6% to US$4.66/MMBtu for November 2009 through September 2010 from US$4.66/MMBtu for the same period of 2008-2009.

The price gain more than made up for the modest erosion of sales volumes. Canadian gas export revenue rose by 2.8% to US$14.174 billion for the first 11 months of the 2009-2010 contract year from US$13.791 billion for the same period of 2008-2009.

The only remaining slippage in the value of the Canada-U.S. gas trade is due to exchange rates. The gains measured in the customers' money are not yet enough to make up for the loonie's climb to near-par with the U.S. dollar last winter.

Measured in Canadian currency, the average gas export price for November 2009 through September 2010 is down by 9% to C$4.52/gigajoule (GJ) from C$4.97/GJ for the same period of 2008-2009. Canadian dollar revenue is down by 10.7%, at C$14.741 billion from C$16.509 billion.

Export volume losses for the first 11 months of the 2009-2010 contract year are concentrated in the northeastern United States, where pipeline deliveries from Canada are down by 21.9% at 703.6 Bcf. Canadian shipments to California are up by 31.5% at 480.9 Bcf. International deliveries into the U.S. Midwest are holding firm, up by 1% to 1.312 Tcf. Exports into the U.S. Pacific Northwest are up 2.3% to 508.2 Bcf.

U.S. regional prices fetched by Canadian gas are up across the board for November 2009 through September 2010: by 3% to US$4.42/MMBtu in California, 3% to US$4.51 in the U.S. Midwest, 7.3% to US$5.17 in the U.S. Northeast, and 10.3% to US$4.60 in the U.S. Pacific Northwest.

Canadian stock exchanges and financial analysts, still reeling from the gas bust of 2008-2009, remain in a bearish mood with research notes and advice studded with warnings of "downside risk." FirstEnergy Capital Corp., a market observer in the Canadian gas capital of Calgary, points to high levels of gas in storage and estimates that "the current market remains oversupplied on the order of 2 Bcf/d after adjusting for weather effects." FirstEnergy research suggests "the seasonal peak in pricing associated with the heating season may already have passed...We believe the inclination will be for prices to drift lower than higher on average."

Out in the gas fields the Canadian industry shows signs to responding to the improving -- or at least, no longer deteriorating -- conditions suggested by the NEB data. Although a switch to oil targets is responsible for most of a western Canadian drilling recovery that began last spring, gas activity is mildly on the mend.

As of Nov. 30 the number of western Canadian rigs at work with gas as their declared target was 200, or 20% more than the 167 counted a year ago. Annual winter drilling programs have begun, thanks to prolonged harsh cold snaps that have frozen northern muskeg swamps solid enough to support heavy equipment.

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