Canada Winter Energy Outlook – National Energy Board

“Markets here cannot help but be affected by the current volatility of world commodity markets," said National Energy Board Chair Gaétan Caron. "What this means for Canadians is that we may see lower heating fuel costs and lower gas prices at the pump. Falling prices could also have a negative impact on the pace of production and energy infrastructure developments. However, thanks to our relatively abundant energy resources, Canada is well positioned to weather the storm much better than other economies.”

Oil



" ...average Canadian heating oil prices this winter are expected to be lower than prices seen last year. Heating oil supplies in Canada will likely be adequate to meet consumer needs this winter. However, U.S. inventories are at the bottom of the five year range, providing some support to prices."

Natural Gas



"Barring any prolonged cold weather, natural gas prices are likely to remain on the lower end between US$6.00-9.00/MMBtu over the course of the winter. Natural gas prices are expected to remain below the price in the rest of the world. In general, Asian and European natural gas prices are more closely tied to oil prices. The impact from the price difference will be lower LNG imports this winter, since it will be shipped to the higher price areas."



"Growth in U.S. gas supply has more than offset any reductions in LNG imports and Canadian production. The Rockies Express pipeline has allowed more production from the western U.S. to enter the market and this, combined with additional production from shale, has meant a significant year over year increase in natural gas production. In addition, with lower U.S. demand due to a slowing economy and mild weather this summer, gas storage is on track to be full for the upcoming winter season. The combination of weaker demand and higher gas availability from production and storage suggests that there will be sufficient gas supplies this winter."

Electricity



Recent additons to eletric generation capacity, particularly in Ontario and east should allow for Canada’s overall supply to be sufficient this winter. As economic activity slows in Ontario and the east as reflected by reduced output from manufacturing and mills, so do the concerns about the adequacy of electricity supply. On the Western Canadian front, however, supply is tighteing as growth in consumption it outpacing growth in generation.

Alternative Sources of Energy

"A growing understanding of, as well as efforts to reduce greenhouse gas emissions, is also influencing electrical energy supply on a number of fronts. In the last few years, wind generated power has grown significantly, and is expected to continue to do so in the years to come.

There is also renewed interest in nuclear power generation. As a result, a number of facilities in the East have been refurbished, rather than decommissioned. These provinces (ON, QC, NB) will be better positioned to handle energy demands."

Source: National Energy Board: 2008-2009 Winter Energy Outlook