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License Photo” height=”534″ onclick=”st_ss_sh1();” src=”https://cdnph.upi.com/svc/sv/upi/7821669137234/2022/1/74dfe6e79c08a4fc3e1be8a54214bbae/Canada-helping-with-US-gas-supplies-but-only-so-much.jpg” title=”Imports of natural gas from Canada could help shore up U.S. supplies as winter approaches in the Northern Hemisphere. Photo by John Angelillo/UPI | License Photo” width=”800″>
Imports of natural gas from Canada could help shore up U.S. supplies as winter approaches in the Northern Hemisphere. Photo by John Angelillo/UPI | License Photo
Nov. 22 (UPI) — The U.S. Energy Department said Tuesday that natural gas markets should be reasonably calm this winter heating season due in part to imports coming in from Canada.
Canada is rich in crude oil and natural gas, though the lack of appropriate infrastructure means that most of those products stay in North America. The U.S. Energy Information Administration, the statistics office for the Energy Department, reported that Canada accounted for about 8% of total U.S. supplies of natural gas on average as of the end of August.
Imports are on the rise. In a weekly roundup, the EIA reported that total natural gas imports from Canada during the seven-day period ending Nov. 16 averaged 6.1 billion cubic feet per day (Bcf/d), nearly twice as much as during the previous period and roughly 25% higher than year-ago levels.
Increased imports may be the result of improved economic activity during the post-vaccination stage of the COVID-19 pandemic and the shifting energy landscape brought on by the war in Ukraine, which has resulted in higher net natural gas exports from the United States to the economies of Europe.
Weather could be a factor as well, particularly following last week’s devastating winter storm. Winter Storm Uri, which brought freezing temperatures to the energy-dense U.S. south, led to drastic declines in U.S. natural gas production and a surge in imports from Canada. During February 2021, total imports averaged 9.5 Bcf/d, the highest monthly average in 10 years.
While EIA is expecting Canadian natural gas to help with supplies, domestic inventories of natural gas remain 3% below the five-year average heading into the winter heating season.
As a result, heating bills could still be elevated over the coming months. EIA in its monthly report for November said it expected the wholesale price of natural gas, as indicated by the benchmark Henry Hub, will average $6 per million British thermal units (MMBtu) over both the fourth quarter of 2022 and the first quarter of 2023.
EIA’s forecast, while high, is about $1 per MMBtu lower than the forecast from the agency’s monthly report from October. That said, Henry Hub averaged $3.91 per MMBtu for all of 2021 and should average $6.49 for full-year 2022.
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