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Advice on Deregulation of Electricity & Natural Gas
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More natural gas is being used for electricity generation. Any new electricity capacity brought on line right now is generated by natural gas, rather than oil, coal, water or nuclear.
Natural Gas and Electricity Prices in Canada will likely rise toward US price levels due to greater pipeline interconnection and deregulated trade with the US, and the fact that energy is becoming a North American commodity.
See the current natural gas price forecast.
For Eastern Canada Gas, Look West
Up until the late 1980's Canadian natural gas producers were required to keep a 25 year reserve before they could export natural gas from Canada. This forced producers into extensive and ongoing natural gas drilling programs which resulted in a long term oversupply situation. In the late 80's, National Energy Board regulations were changed, and producers were allowed to reduce their reserve length to nine years. Because of increased pipeline capacity in the early 90's, the 25 year gas bubble was largely depleted by 1996. This is why gas prices trended downwards from the late 1980's until the mid nineties.
In more recent times North American gas prices are very volatile and they fluctuate largely due to levels of storage, weather forecasts, economic outlook, oil prices, drilling rates, and exchange rates.
OK, So What About Term?Different gas sellers have different opinions of future gas prices. Therefore, you will often find a significant variance in rates among different terms, particularly longer terms. Contained in every long term price is a risk factor to protect the supplier in case she is wrong about future markets. This is much like how long term mortgage rates are more expensive than short term rates.
To assess what is right for you, look at the price chart, review what you think will happen to prices in general and natural gas prices specifically.
What is Deregulation Anyway
Government deregulation has given you freedom of choice. In many states and provinces you now can choose your own natural gas energy supplier to offer you a natural gas supply at better prices! Click to find out more on deregulation.