Natural Gas in Canada: Frequently Asked Questions + Answers

Natural Gas in Canada: Frequently Asked Questions + Answers

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Canadian natural gas - FAQ and answers cover

As the world's fifth-largest producer and sixth-largest exporter, Canada is an absolute natural gas powerhouse. Today, natural gas is Canada's largest energy source, accounting for 41% of our country's total energy supply, and plays a critical role in our national economy.

This FAQ aims to provide balanced, fact-based information about Canada's natural gas sector, from its economic benefits and safety record to its role in domestic energy security and global markets. By understanding the facts, Canadians can better evaluate the industry's critical importance to our homes, livelihoods, economy, and energy security at large.

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Q. How does natural gas benefit Canada?

Natural gas benefits Canadians in several ways, including [1]:

  • Providing an affordable and reliable energy source for homes and businesses
  • Creating employment opportunities in the energy sector nationwide, including more than 40,000 direct jobs in the production, transmission, and distribution subsectors [2]
  • Generating significant government revenues through taxes and royalties
  • Contributes to Canada’s export-based economy as it is sold to the United States, and soon to other nations abroad, as a commodity export
  • Generating economic activity, with the natural gas distribution sector adding $5.1 billion to Canada’s gross domestic product (GDP) in 2022 [9] and earning $13 billion from exports in 2023 [10]

Q. Where does Canada’s natural gas come from?

All of Canada’s natural gas production comes from the Western Canadian Sedimentary Basin (WCSB), which spans across British Columbia, Alberta, Saskatchewan, and Manitoba [3].

In 2023, Alberta and British Columbia accounted for 98% of Canada’s total natural gas production, with smaller amounts produced in Saskatchewan, Ontario, New Brunswick, and the Northwest Territories [4].

Q. How reliant is Canada on natural gas as an energy source?

Natural gas is Canada's most important energy source. In 2022, it accounted for 41% of the country’s total energy supply and was used by approximately two-thirds of Canadians [8][12].

Natural gas is the single largest energy source for Canada’s manufacturing sector, accounting for about 28% of energy consumed by the industry [6]. It is also the most important heating source for Canadian homes and businesses, with over 7.6 million end-use locations in the 2023-2024 season [7].

Q. What is Canada’s position in global natural gas production and exports?

Canada was the fifth-largest natural gas producer in 2023, accounting for 5% of global production [5]. In 2023, Canada produced an average of 17.9 billion cubic feet per day (bcf/d), a 3.6 increase year over year [4].

Additionally, Canada was the sixth-largest natural gas exporter, accounting for 7% of global exports [5]. With the advent of new LNG export facilities, Canada is expected to see its natural gas exports boosted significantly over the next several years [8].

Q. How much natural gas does Canada have?

Canada is estimated to have 1,368 trillion cubic feet of natural gas resources which includes 368 trillion cubic feet (Tcf) of conventional reserves and 988 Tcf of unconventional reserves (coal-bed methane, shale and tight gas) [4].

This is a massive amount of reserves equivalent to more than 200 years of current annual gas demand [9].

Q. How much natural gas does Canada sell every year?

Canada saw 4.32 Tcf of natural gas sold domestically in 2022, and a further 2.94 Tcf exported to buyers abroad [9].

Approximately 44% of Canadian natural gas production is exported every year, with the U.S. accounting for almost all exports [5]. In 2023, for example, Canada exported about 45% of its natural gas supply to the U.S., where it accounts for about 9% of America’s annual imports [5][10]

Between 2010 and 2021, Canadian natural gas exports to the U.S. have decreased by 18% due to increased U.S. domestic production in the northeast states such as Pennsylvania [10].

Q. Does Canada import natural gas?

Yes, with 99% of Canadian natural gas imports and 17% of total natural gas consumption coming from the U.S. [5]

Since 2009, Canada has imported smaller volumes of liquefied natural gas (LNG) from other countries via the Canaport LNG terminal in Saint John, New Brunswick [5].

Q. How does Canada transport its natural gas across provinces and to international markets?

Canada’s natural gas pipeline network consists of four main types, each critical to delivering affordable, reliable energy to Canadians and buyers abroad [12].

Gathering pipelines: move gas from production wells to processing facilities

Feeder pipelines: transport gas from processing facilities to transmission pipelines

Transmission pipelines: major conduits of the pipeline network, transporting gas to markets often across vast distances

Distribution pipelines: deliver natural gas to residences, businesses, manufacturers, and other consumers

The Canada Energy Regulator (CER) regulates nearly 48,400 kilometres of operating natural gas pipelines [12].

Q. How safe are natural gas pipelines in Canada?

Natural gas pipelines in Canada are very safe and reliable. Built using high-quality materials, all natural gas distribution systems and transmission lines are subject to strict regulations [11].

Q. Will LNG exports benefit Canadians?

Yes, Canada’s emerging liquefied natural gas industry has already generated immense economic opportunities for Canadian and Indigenous families. It has also helped usher in economic reconciliation with First Nations who are now becoming owners of natural gas infrastructure projects.

Between 2020-2064, a healthy LNG sector on Canada’s west coast could generate:

  • Over $500 billion in economic activity
  • 96,550 more jobs a year
  • Over $6 billion in wages for workers
  • More than $150 billion in government revenues

Liquefied natural gas will also help Canadians diversify their international export markets, likely resulting in a higher price for the natural gas sold to the United States.

The World Needs More Canadian Natural Gas

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Natural gas plays a vital role in Canada's economy and energy landscape. From providing tens of thousands of jobs and generating billions in government revenues to offering potential solutions for global energy security, Canadian natural gas has an increasingly important role to play here at home and abroad.

As global demand for natural gas continues to grow to new record highs for years to come, Canada's reliable natural gas producers, including LNG projects, position us to be a go-to supplier while supporting domestic energy needs and economic growth.

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SOURCES:

1 - https://natural-resources.canada.ca/natural-gas-benefits/3531

2 - https://fuellingcanada.ca/fuelling-our-jobs/

3 - https://www.capp.ca/en/oil-natural-gas-you/oil-natural-gas-canada/

4 - https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/provincial-territorial-energy-profiles/provincial-territorial-energy-profiles-canada.html

5 - https://energy-information.canada.ca/en/energy-facts

6 - https://www.canadianenergycentre.ca/energy-perspectives-natural-gas-in-the-canadian-industrial-sector/

7 - https://www.cga.ca/wp-content/uploads/2023/12/CGA-Natural-Gas-Heating-2023-2024.pdf

8 - https://financialpost.com/feature/lng-canada-start-shipping-2025-but-growth-uncertain

9 - https://www.cga.ca/natural-gas-statistics/natural-gas-facts/

10 - https://www.capp.ca/wp-content/uploads/2024/03/Canadian-Exports-of-Crude-Oil-and-Natural-Gas.pdf

11 - https://natural-resources.canada.ca/our-natural-resources/energy-sources-distribution/fossil-fuels/pipelines/pipelines-across-canada/18856

12 - https://www.cer-rec.gc.ca/en/data-analysis/facilities-we-regulate/canadas-pipeline-system/2021/natural-gas-pipeline-transportation-system.html

13 - https://www.cga.ca/natural-gas-101/