Despite continuing anxieties over supplies, Canadian natural-gas producers increased exports to the United States by 13% during the 2000-01 heating season, records kept by the National Energy Board show.

Canadian exports reached 1.7 Tcf during November through the end of March, an increase of 200 Bcf from 1.5 Tcf shipped to the U.S. during the 1999-00 heating season. The growth in Canadian deliveries to the U.S. was concentrated in the Midwest and the northeastern states. Exports to the Midwest, destination of the new Alliance Pipeline, rose by 84 Bcf or 15% to 629 Bcf in November through March. In the Northeast, Canadian gas sales rose by 29% or 119 Bcf to a seasonal total of 528 Bcf. Heating-season sales to California slipped 13% to 266 Bcf.

Prices rose faster than sales volumes, yielding a spectacular 196% jump in gas export revenues for the heating season to US$11 billion compared to $3.7 billion during the November-March period of 1999-00. The average price fetched by Canadian gas at the border doubled to US$5.12 per MMBtu during the 2000-01 heating season.

While the market performance has lit a fire under Canadian drilling, just how much more the industry can deliver remains a highly contentious issue. In a survey by the Canadian Energy Research Institute, producers collectively predicted they can achieve “deliverability” of 20.7 Bcf/d this year, 22 Bcf/d in 2002 and 23.4 Bcf/d in 2003. Conservative CERI forecasters, discounting the expectations on the basis of results from the low-cost shallow drilling that dominated the Canadian industry in the late 1990s, predicted 18.1 Bcf/d this year, 19.1 Bcf/d in 2002 and 20.4 Bcf/d in 2003.

The conservatives readily concede that they could be underestimating the capabilities of the Canadian industry’s traditional mainstay reserves in the western provinces. It all depends on the extent of an exploration revival that the producers say they expect to see stimulated by strong prices and revenues, with deeper and remoter drilling along the Rocky Mountain foothills and in northern regions replacing almost complete late-’90s reliance on shallow southern targets.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.