Expanding natural gas prices
Price are 213% higher than two years ago
By Rob Roach, ATB Economics 3 August 2021 1 min read
Overshadowed in recent years by developments in the oil patch, Alberta’s natural gas industry remains an important slice of our economic pie, so it’s good news that prices are stronger than they have been in years.
As of July, the benchmark price for Alberta natural gas was sitting at US$2.82 per million British thermal units (MMbtu). That’s 94% higher than it was 12 months earlier when it was $1.45 and 213% better than in July 2019 when it averaged just 90 cents.
There are always a lot of moving parts affecting the value of natural gas, but a reasonable scenario is for prices to continue to rise over the short-term before pulling back as we get deeper in 2022.
Consumers, of course, face higher utility bills, but the stronger prices are a much needed shot in the arm for our natural gas industry.
There is, however, still some catching up to do on the production side.
After falling from the dizzying heights set in the mid-2000s, annual natural gas production in Alberta began to climb again in 2014, reaching 298.4 million cubic metres per day in 2018 (10.5 MMBtu). Production then contracted by 3.5% in 2019 and by another 4.1% in 2020.
Production appears to be on the rise once again, with output up by 0.6% over the first half of 2021 compared to the same period last year.
Answer to the previous trivia question: The Canadian Federation of Independent Business was created in 1971.
Today’s trivia question: Which country produces the most natural gas?