Canada needs US natural gas to help produce its bitumen oil sands. As oil sands production ratchets up from 1.5 million barrels per day to 5 mbpd by 2020, Canada's demand for US gas should continue to rise.
The emergence of shale gas over the last six years has fueled our hopes that we'll be able to safely transition away from our oil addiction.
Not only do we have an abundance of it trapped in the various shale formations across our country, but developing that resource is inevitable, because we're not the only ones counting on that future supply...
You see, it's not just the United States that's depending on U.S. gas production. Remember Canada's trouble with peak natural gas?
It turns out natural gas exports to Canada have doubled in just five years!
We may be relying heavily on an ever-increasing amount of Canadian crude to meet our oil fix, but Canada's natural gas troubles will only worsen as production from the oil sands grows to more than five million barrels per day in the coming decade. (Natural gas plays a vital role in the extraction process of deeply-buried bitumen.)
Remember, more than three-quarters of Alberta's oil production comes from oil sands operations.
As if that weren't enough, Canada isn't the only country crossing her fingers for more U.S. natural gas. South of the border, Mexico is also relying more on our supply.
U.S. exports to Mexico have also jumped significantly. Prior to 2000, we barely exported any natural gas to either Canada or Mexico. Today's a different story.
Just like Canada, Mexico can't get enough of it...
Last year, natural gas production from the Marcellus averaged 1.3 Bcfe/d. By the start of 2011, production was around two billion cubic feet per day. And this is only the beginning.
Within the next eight years, production is expected to jump more than 775% to 17.5 billion cubic feet per day. In the process, it'll add at least 250,000 jobs and tack on over $20 billion in revenue to Pennsylvania's economy.
We're also expecting the drillers to have a field day. Even though natural gas prices have been lackluster since crashing in 2008, drilling more than doubled in 2010. There are more rigs drilling the formation than ever before..._EnergyandCapital
Canada has plenty of shale gas too, but for now it is more lucrative to produce oil than gas, given current price spreads. Once the nascent gas to liquids (GTL) industry revs up, prices should slowly converge, and gas will become a more lucrative product.
By. Al Fin