A new report says Canada’s natural gas exports will continue to decline over the next few years with no sign of a return to the highs of the past decade.
The Canadian Energy Research Institute says exports will drop because of the steep increase in cheaper natural gas production in the U.S. where Canada has traditionally exported its gas.
The report Tuesday says the U.S., already the world’s largest gas producer, could become a net exporter of gas by next year and is set to increase gas production by 72 per cent over the next 20 years.
CERI says in Western Canada — which accounts for the vast majority of Canadian natural gas production — pipeline exports will drop to as low as one billion cubic feet per day in 2020 as low prices weigh on production, before rebounding to three billion cubic feet by 2037.
The drop in Western Canadian exports is on top of an already steep drop from a high of about 11 billion cubic feet per day in 2006 to an estimated four billion cubic feet per day this year.
CERI says Eastern Canada will see a production drop or end because of a combination of high costs and fracking bans in Quebec and New Brunswick.
Despite the drop in exports, the study notes Canada could still be a net exporter of natural gas in 20 years, especially if liquefied natural gas projects go ahead.
The study assumes LNG exports of about four billion cubic feet per day starting around 2021, but notes that no projects have received final approval to start construction.
With LNG exports factored in, natural gas exports could total six billion cubic feet per day by 2037.
Total Canadian production is expected to increase from 14.4 billion cubic feet per day in 2015 to 21 billion cubic feet per day over the next 20 years, with an increase in domestic consumption part of the growth.