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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (602)	7/24/2001 5:15:52 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

Tuesday July 24, 5:07 pm Eastern Time Canadians see no sudden boom in U.S. natgas exports biz.yahoo.com By Chris Reese NEW YORK, July 24 (Reuters) - A key feature of U.S. President George W. Bush's energy policy seeks a big boost in Canadian natural gas exports to the energy hungry U.S.. But Canadian energy companies cautioned an investor conference in New York on Tuesday not to expect much change in their gas sales to the U.S. until Arctic reserves are brought on line, a move that could be many years away. Most Canadian petroleum fields have reached a mature stage, with new sources difficult and increasingly expensive to tap and flowing at more moderate levels, the officials said. ``We should be able to keep up that current rate (of share of supply to the U.S.), but it won't grow,'' Brian Dau, president of Anderson Exploration Ltd (Toronto:AXL.TO - news), told Reuters at a Canadian natural gas and oil conference sponsored by Calgary, Alberta-based brokerage FirstEnergy Capital Corp. ``Our share of U.S. supply will stay pretty much the same, plus or minus a few points,'' Dau said. Canadian natural gas exports to the U.S. rose to about 3.5 trillion cubic feet (tcf) in 2000, making up about 15 percent of total gas consumption in the U.S. that year, according to figures from the Canadian Association of Petroleum Producers (CAPP). Canada is the world's third largest producer of natural gas. In 2000, Canada produced about 6.3 tcf of natural gas, of which over half was sent to the U.S. The U.S. burned about 22.8 tcf of gas in 2000. U.S. natural gas use is expected to rise sharply over the next few years, with especially strong demand coming from a fleet of new, gas-fired power plants now under construction. CAPP said in a recent study forecast North American natural gas consumption would grow by 57 percent from 1999 to 2020. But with supplies dwindling on existing fields and government and environmental roadblocks to new development, producers will have to scramble to meet the rising demand. ``The challenge for producers is to find the supply to fill that gap,'' Russ Girling, chief financial officer with TransCanada PipeLines Ltd (Toronto:TRP.TO - news), told the conference. ``It is our view that northern gas will be required in this market in the next decade.'' While Girling expects the U.S. to eventually tap reserves in Alaska North Slope, he said Canadian producers are looking to the Mackenzie Delta in the Northwest Territories to bolster developed resources. About nine tcf of gas has been proven to be recoverable in the Mackenzie Delta, with estimates of possible total reserves of 64 tcf, Girling said. Moving the Arctic reserves to market will require laying a pipeline from Canada's vast northern tundra down to Alberta -- a two-year undertaking likely to cost $2 billion, he said. Export lines to the U.S. will have to be expanded once the much-needed Arctic gas is brought on line, which should happen sometime near 2006, said Martin Molyneaux, research director at FirstEnergy Capital. ``If we think North American energy issues have been solved by the economic slowdown, we are gravely mistaken,'' Molyneaux told the conference. ``There is not enough prospects out there for people to drill,'' Anderson's Dau said. ``Supply growth will start to diminish...we are going to need that northern gas soon.'' ``We've drilled up the easy plays in Canada,'' said Murray Nunns, chief operating officer of Rio Alto Exploration Ltd (Toronto:RAX.TO - news), estimating that Canada's petroleum reserves, although maturing, are still 10 to 15 years behind the U.S. in terms of development.