The amount of Canadian gas available for export to the United States will decline by about 4 Bcf/d over the next nine years, from 9.7 Bcf/d in 2006 to about 5.7 Bcf/d in 2015, according to Calgary-based Ziff Energy Group. And to a great extent gas consumption by Alberta oilsands producers can be blamed.

Ziff has released a 14-page report on Canadian exports to 2020. While the firm would not make a copy available to NGI, authors Bill Gwozd and Cameron Gingrich discussed their findings.

“The Western Canadian gas supply basin is maturing with gas production declining,” Gingrich said. “And concurrently, Canadian demand grows due to pinpoint gas requirements from oilsands producers and Ontario’s insistence on curtailing coal-fired [power] generation. Therefore, net Canadian gas exports will fall at a faster rate then the 3% decline seen in 2006.”

Besides Western Canada, Gwozd said the study looked at supply areas in Ontario, New Brunswick, offshore Nova Scotia and the potential for gas from the Mackenzie Delta as well as Alaskan gas. The study also assumed construction of two Eastern Canada liquefied natural gas (LNG) terminals. Even with the LNG terminals, the study model shows that supply is down by about 3 Bcf/d by 2015, Gwozd said.

Oilsands demand will grow Canadian gas consumption by about 1.5 Bcf/d by 2015, Gingrich said. By 2015 the total demand increase, including gas for oilsands, is projected to be 2.5 Bcf/d, he said. About 400 MMcf/d of that figure is targeted to new gas-fired power generation planned to replace existing coal plants, a change made at the behest of the Ontario government. The remainder is generally residential and commercial demand.

The oilsands demand isn’t going away, Gingrich said. Once producers spend the money to burn gas for oilsands production, their costs are sunk. As long as oil is $45/bbl or more, oilsands production is generally economic, he said. “So as long as we have $60 oil, those projects are going ahead full steam.”

Worth noting, though, is net Btu exports to the United States will likely increase. The additional energy will be coming in the form of oil rather than natural gas, Gingrich said.

Currently, Alberta’s government is looking at royalty and tax policy “to ensure Albertans are receiving a fair share from energy development,” according to the government. A final report by an independent panel is due by Aug. 31. If the royalty burden on producers is increased, “our supply scenario for natural gas would likely be impacted downward,” Gingrich told NGI.

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