Market Snapshot: Canada exports around half of the natural gas it produces

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Release date: 2022-12-07

Canadian natural gas production exports have decreased, from around 60% of production in 2010 to around 50% in 2021.Footnote 1 Since 2010, Canadian annual natural gas production increased from 151 billion cubic metres (Bcm) to 167 Bcm, while annual exports decreased from 92 Bcm to 80 BcmFootnote 2 (Figure 1). The two main reasons for the decrease in exports are:

  1. increasing natural gas demand in western Canada, and
  2. increasing production in the U.S., Canada’s only export market by pipelines.

Figure 1: Canadian natural gas production and exports

Source and Description

Source: CER – Marketable Natural Gas Production in Canada; and Commodity Statistics – Gas Monthly Summary for Year – Exports and Imports

Description: The figure consists of two graphs. The first graph shows the yearly volume of natural gas produced in Canada and the yearly volume of natural gas exported from Canada. The thick grey line is natural gas production, which has been increasing. The blue line is natural gas exports, which have generally decreased since 2010.

In 2010, 151 billion cubic metres (Bcm) was produced, and 92 Bcm was exported.Footnote 3 In 2021, 167 Bcm was produced, and 80 Bcm was exported.Footnote 4 The second area chart shows the natural gas exported from Canada as a proportion of what was produced in Canada yearly. In 2010, Canada exported 61% of its production. In 2021, Canada exported 48% of its production.

Canada is using more natural gas

Western Canada is consuming more gas than ever before. Mainly, this includes increased demand from Canada’s oil sandsFootnote 5 and increased use of natural gas to generate electricity.Footnote 6 Given that production generally responds to economic drivers such as natural gas prices, this leaves less gas to be exported if, for example, prices limit production while annual domestic demand is increased.

U.S. natural gas production has increased, but still needs Canadian exports

Meanwhile, natural gas production increased in the U.S. from 604 billion cubic metres (Bcm) in 2010 to 978 BcmFootnote 7 in 2021.Footnote 8 This was driven by growing gas production in the U.S. Appalachian Basin, which rose from 11 Bcm in 2010 to 326 BcmFootnote 9 in 2021.Footnote 10 This means less Canadian gas is needed in the U.S. Midwest and eastern regions. So much gas is now produced in the Appalachian Basin that, per the CER’s Provincial and Territorial Energy Profiles, southern Ontario imports a significant amount of its gasFootnote 11 from the U.S., which is often more economical than getting this gas from Western Canada Sedimentary Basin (WCSB)Definition* producers. However, the U.S. west region still heavily relies on Canadian exports, which have increased over time and were 34 BcmFootnote 12 in 2021. Please see the Natural Gas Trade Summary for more statistics and charts on the amount and destination of Canadian exports and imports of natural gas.

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