Canada’s natural gas endowment is much bigger than that of the United States. Today Canada has enough natural gas reserves to last over 300 years at the current rate of extraction. Yet our actual production has been much slower. Our collective failure to develop these resources to meet our own domestic needs and supply the world with relatively clean energy is a massive opportunity cost.
Consider the difference in our natural gas reserves. In January 2022, Canada’s reserve of natural gas amounted to approximately 320 trillion cubic feet (Tcf). To put this into perspective, 320 Tcf of gas could fill 3.6 billion Olympic-sized swimming pools. In comparison, America’s natural gas reserves amounted to 308 Tcf—3.49 billion swimming pools.
Yet, despite possessing larger natural gas reserves, Canada has been eclipsed by the United States in developing a robust natural gas market. The disparity between the two nations in natural gas production and the growth of exports from 2010 to 2020 is stark. (Both years fairly represent the average of those recently before and after them when it comes to Canadian and U.S. natural gas exports and production, according to Canada Energy Regulator and Natural Resources Canada.)
Between 2010 and 2020, Canada's natural gas production declined 10 percent, from 6.1 Tcf to 5.44 Tcf. Natural gas production in the United States, meanwhile, grew 52 percent from 22.9 Tcf to 34.9 Tcf.
The trend carries over to exports. Between 2010 and 2020, Canada's natural gas exports declined 65 percent from 3.47 Tcf to 1.2 Tcf. The U.S.'s natural gas exports grew 261 percent, from just 1.8 Tcf to 6.5 Tcf.
The same goes for the construction of natural gas pipelines. Between 2010 and 2020, the U.S. built more than twice as many miles as Canada of natural gas pipelines.
As these three charts illustrate, Canada’s natural gas production and exports have gone down, while the U.S. has significantly increased its own production and exports, and its addition of natural gas transmission pipelines has more than doubled Canada’s.
The difference in performance of the natural gas industries between the two countries isn’t due to capacity to perform. Canada not only has more natural gas reserves than the U.S., but it also has a lot of well-financed firms and technical expertise to develop them. The differing performance can be boiled down to government policy.
Where is the long-term strategy to grow the Canadian economy, increase global standing by helping allies, and reduce the global environmental footprint? It is time for the Canadian government to unlock the handcuffs holding back its energy industry’s success.
This article is based on research from Jordan (Meimei) Weston’s 2023 thesis, “Fueling Progress: Addressing Impediments to Canadian Natural Gas Export Projects.”
