Canada’s Gas Extraction Industry: Industrial Outlook Winter 2012

This report examines the short-and medium-term economic and profitability outlook for Canada’s Gas Extraction Industry.

Document Highlights

• U.S. Market—Rising supplies of natural gas in the U.S. are keeping prices lower and lessening the need for Canadian imports.
• Exchange Rate—The Canadian dollar has appreciated considerably in the past five years. Since Canada exports the majority of its production, this has effectively lowered the average price that Canadian producers receive.
• Production—Production will continue to decline moderately over the medium term, particularly in Alberta. Productivity rates are expected to taper off, and drilling is being diverted away from natural gas to oil to take advantage of relatively higher prices. Shale and tight gas developments in B.C. are one bright spot that will help offset Alberta’s declines.