Despite a U.S. natural gas glut, the demand for Canadian natural gas is expected to increase thanks to an expected rise in domestic power needs and oilsands expansion, TD Economics reports.
The sudden availability of cheap shale gas in the U.S. means the demand for Canadian natural gas from across the border is falling, TD Economics states in a special report on shale gas.
The lower demand for Canadian gas exports to the U.S. has resulted in Canada producing 16% less gas last year than it did in 2005 – a trend the National Energy Board expects to continue.
The good news is that expansion of the energy-intensive oilsands is expected to increase the demand for natural gas by 30% by 2020. The domestic demand is also expected to grow as more thermal power production comes from natural gas, increasing demand by 33%.
And as gas exports to the U.S. continue to fall, “lower demand from our traditional export market – the U.S. – means there is also the opportunity for producers to realize greater value for their reserves with the prospects for liquefied natural gas exports from B.C. to Asia,” the TD Economics report states.