Deregulation of Canada's natural gas market has doubled production, quadrupled exports, and created fair market prices for buyers in the past decade, says Canada's National Energy Board (NEB).
An NEB study of the industry since deregulation was implemented in 1986 noted producers were forced to adopt new and more efficient technology in response to an initial price decline of about 40%.
It concluded that overall, the natural gas industry is now efficient and responsive to the demands of the marketplace.
In the past decade, natural gas exports to the U.S. have increased 400% to 2.76 tcf in 1995 from 740 bcf in 1986.
Total Canadian gas production in the same period has doubled to 5.3 tcf in 1995 from 2.6 tcf in 1986.
Total export revenue doubled in the decade to the end of 1995 to $5.5 billion (Canadian) from $2.6 billion.
NEB said the average return on investment for companies during 1986-94 was only 4%.
The board also noted that despite the substantial rise in production, estimates of ultimate gas potential are now 50% higher than in 1986.
It said the gas sector has a demonstrated ability to reduce costs and develop new reserves that will allow it to "respond to the demands of the marketplace in coming years."
The report said monopolies still are the norm in gas transportation, but competition is emerging as new pipelines are proposed by the producing sector.
And, it said, the pipeline sector has developed a new range of services which, along with improved storage capacity, "has greatly enhanced the flexibility and reliability of the delivery system."
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