CANADIAN NATURAL GAS Security of Supply - PowerPoint by ewa18516


									Forum on Continental Energy

    Monday, March 21, 2005
    Woodrow Wilson Center
      Washington, D.C.

                 CANADIAN NATURAL GAS
                         Security of Supply

                            Graham Flack
            Associate Assistant Deputy Minister, Energy Policy
                       Natural Resources Canada
           Presentation Outline

• Canada’s Contribution to North American
  Security of Natural Gas Supply
• Ensuring Future Adequacy of Natural Gas Supply
  – Role of Market
  – Role of Governments and Regulators
• Conclusions
  Adequacy of Natural Gas Resources (Tcf)
                              MacKenzie Delta/
                               Beaufort Sea
                                   9                     Arctic
                                                         12       Other Canadian Frontiers

                                   1                                        46
   Territories                 6

B.C. Offshore 9                                                                                Offshore
                  (includes                 138                                                       4
  Gas Basin        Ontario)     57
 Remaining                             121
 Produced                                                                                    3             Shelf


 Security of Natural Gas Supply –
      Canada’s Contribution
• Canada has a very high level of natural gas supply and
  is a major contributor to the North American security of
  supply picture:
   – Net exporter - nearly 60% of Canadian natural gas production
     is exported to the U.S.
      • Represents about 17% of total U.S. natural gas consumption
      • About 94% of total U.S. natural gas imports are from Canada
   – Canada produces nearly 25% of total North American natural
     gas supplies
Adequacy of Pipeline Infrastructure

      West:             Midwest:           Northeast:
4% of U.S. Demand   8% of U.S. Demand   4% of U.S. Demand
                Canada’s Future
              Natural Gas Supplies
                 Canadian Natural Gas Supply Growth                                  Tcf
                                                                                           •   While conventional natural gas
                                                                                               supplies are increasing only
8.0                                                                                  8.0
                                                                                               moderately, demand continues
7.0                                                                                  7.0       to grow at a steady pace.
                                                                                           •   Together, this implies that new
6.0                                                                                  6.0
                                                                                               sources of natural gas will be
5.0                                                                                  5.0       required
                                                                                           •   New supply sources of natural
4.0                                                                                  4.0
                                                                                               gas emerging:
3.0                                                                                  3.0        – coalbed methane
             Newfoundland                                                                       – Mackenzie Delta and Alaska
2.0          Nova Scotia                                                             2.0
             Unconventional                                                                     – east coast offshore
             Territories/Mackenzie Delta
1.0          Saskatchewan
             British Columbia
                                                                                     1.0        – west coast offshore?
             Alberta                                                                              (moratorium)
0.0                                                                                0.0
                                                                                                – liquefied natural gas
  2004       2006      2008       2010     2012    2014      2016     2018      2020
                                                                                                – compressed natural gas
Source: NEB, Canada’s Energy Future: Scenarios for Supply and Demand to 2025, July 2003.          (offshore Newfoundland)
                                                                                                – methane hydrates
   Ensuring Future Adequacy
     of Natural Gas Supply
• In the long-term, the prospects for ensuring adequate
  supplies of natural gas will depend on the ability of,
  and incentives for stakeholders to:
   • Develop resources; and,
   • Develop infrastructure required to connect resources to market

• Ensuring the adequacy of natural gas supply in North
  America for the long-term requires an:
   – Active role by market participants; and,
   – Active role from government and regulators
    Role of Government

•    To ensure that a favorable climate for investment in
     natural gas resources and infrastructure exists requires
     that government:
     1. Continue to endorse a market-based energy policy
     2. Promote initiatives to foster long-term security of
        natural gas supply
     3. International collaboration
     4. Create a smarter regulatory framework that is clear,
        predictable and efficient
Role of Government
1. Our market-oriented energy policy framework is designed to:
    •   Attract investment and stimulate economic growth;
    •   Protect the environment; and,
    •   Ensure a secure and competitively priced supply of energy for
        both domestic and export markets
•   Strong success in these areas:
    •   Oil and natural gas industry invested about $27 billion in 2003;
        more investment than any other sector or industry
•   Our energy policy framework will continue to evolve in response to
    changes in global energy markets and the needs of industry and
Role of Government

2. Promote initiatives to foster long-term security of
   natural gas supply
      •   Continue to promote innovation, technology and energy
          efficiency improvements
      •   Continued commitment to R&D initiatives
      •   Promote the diversification of natural gas supply, and all
          energy sources, including renewable energies

  Together, these initiatives support our continued
  commitment to the sustainable development of
  Canada’s energy resources
Role of Government

3. International Cooperation
•   North American Energy Working Group
    •   The NAEWG, a group of senior officials from Canada, the U.S. and
        Mexico, has been successful in fostering cooperation among the three
    •   Last month, the NAEWG released North American Natural Gas
        Vision, the first report of its kind to amalgamate public information on
        natural gas in all three countries.
•   Memorandum of Understanding – National Energy Board and
    Federal Energy Regulatory Commission
Role of Government

4. Regulatory Initiatives
•   Our system of regulation serves us well, but our needs are
    constantly changing
•   Examples of regulatory cooperation or initiatives designed to
    ensure an efficient regulatory environment
        •   Smart Regulation Initiative
        •   Atlantic Energy Roundtable
        •   Mackenzie Valley Cooperation Plan
• Canada has an abundance of natural gas resources and the
  necessary infrastructure to deliver natural gas to market
• Our market-oriented energy policy framework has been successful
  in providing us with a competitively priced, secure source of natural
  gas supply
• Mature conventional North American natural gas basins, ever-
  increasing demand, and higher prices are attracting investment
• New sources of natural gas supply – coalbed methane, liquefied
  natural gas, Mackenzie Delta, Alaska, and methane hydrates – will
• Governments and regulators have a role to play in creating a
  favorable climate for investment in resources and infrastructure

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