Western Canada’s natural gas production has been on a roll in the past couple of years, reaching a record 17.3 Bcf/d in 2022. Another year of strong growth was expected in 2023, but Mother Nature had other plans — as usual. First, a milder-than-average heating season left plenty of gas in storage, pushing natural gas prices lower across North America. Second, tinder-dry conditions in some of the best gas production areas in Alberta and British Columbia sparked what so far has been a very active wildfire season — and forced producers to curtail their gas output numerous times in May and June. From our early expectations for production growth of 1.2 to 1.4 Bcf/d this year, the impacts from wildfires and a healthy dose of pipeline maintenance has chopped our 2023 production growth outlook to just 0.4 Bcf/d. As we discuss in today’s RBN blog, this slowdown in growth is exactly the opposite of what’s needed to avoid a runup in prices. Strong production momentum will be required into 2024 and 2025 to deal with the startup of the LNG Canada export facility, ongoing Canadian gas demand growth and pipeline exports to the U.S.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Gas production in Western Canada had been undergoing something of a renaissance in the past couple of years. A longed-for recovery in natural gas prices finally started to materialize late in 2021. Painful pipeline maintenance flow restrictions, which had severely handicapped the benchmark AECO price for several summers, were beginning to ease as more regional pipeline capacity was added. And incredible strides were being made by producers in advancing wellhead productivity and reserve recovery from unconventional gas plays, including the celebrated Montney formation.
It all came together in 2022, capped off with record gas production that year of 17.3 Bcf/d (dashed red circle in Figure 1), a gain of more than 1.2 Bcf/d (~8%) over 2021, also a record in terms of year-on-year production growth. With producers starting to set their sights on additional growth this year and in 2024 as Western Canada gears up for exports of LNG in 2025 via LNG Canada in British Columbia (BC), additional strong growth was being anticipated to ensure sufficient gas for LNG exports, Canadian consumption and pipeline exports to the U.S.
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About the song
“Burning Down the House” was written by David Byrne, Chris Frantz, Tina Weymouth and Jerry Harrison and appears on the Talking Heads’ fifth studio album, Speaking in Tongues. The single, released in July 1983, rose to #6 on Billboard’s Mainstream Rock Tracks chart and #9 on the Billboard Hot 100 chart. Personnel on the record were: David Byrne (guitar, lead vocals), Chris Frantz (drums backing vocals), Tina Weymouth (synth bass), Jerry Harrison and Wally Badarou (synthesizers), and Steve Scales (percussion).
The LP Speaking in Tongues, released in June 1983, rose to #11 on Billboard’s Rock Albums chart and #15 on the Billboard 200 Albums chart. The album was ranked #54 on Rolling Stone magazine’s list of the best albums of the 1980s.
Talking Heads was an American rock band formed in New York City in 1975 by David Byrne, Chris Frantz, Tina Weymouth and Jerry Harrison. They played their first show in New York in June 1975, opening for The Ramones at CBGB in the Bowery section of the city. The band has released eight studio albums, two live albums, nine compilation albums, and 31 singles. They were inducted into the Rock and Roll Hall of Fame in 2002. Talking Heads broke up in 1991. Byrne went on to a solo career. Frantz and Weymouth got married and formed a new band, The Tom Tom Club, and produced records for other artists. Harrison also went on to produce records.
