Economic uncertainty dominates winter energy outlook

    CALGARY, Oct. 30 /CNW/ - Canadian energy markets are preparing to weather
a storm this winter, and not one wrought by Mother Nature. Today's winter
outlook released by the National Energy Board says that although there is
sufficient supply to meet Canadian energy demand this winter, there is little
certainty around market prices.
    "Markets here cannot help but be affected by the current volatility of
world commodity markets," said National Energy Board Chair Gaétan Caron. "What
this means for Canadians is that we may see lower heating fuel costs and lower
gas prices at the pump. Falling prices could also have a negative impact on
the pace of production and energy infrastructure developments. However, thanks
to our relatively abundant energy resources, Canada is well positioned to
weather the storm much better than other economies."
    Over the past year Canadians have seen the price of crude increase from
about US$80 per barrel last fall, to $145 per barrel in July and then retreat
to about $75. Similarly, natural gas which was trading at around $6.50/MMbtu
last fall, spiked to over $13/MMBtu in July, and is now trading below $7.00
per MMBtu.
    Fuel prices have been driven down by a combination of factors including a
deepening global financial crisis, falling demand and a worsening U.S. and
global economic outlook. In addition, strong natural gas production in the
U.S. has helped to keep gas prices low while helping ensure an adequate supply
of natural gas for the winter.
    The current global economic situation has created a particularly volatile
and uncertain environment for energy markets. A serious economic downturn may
significantly impact energy demand, and in turn prices. As always, however,
fuel supply disruptions or a particularly cold winter may quickly drive prices
    On the electricity front, Canada's overall supply is expected to be
adequate this winter. This reflects to some extent recent additions to
electric generation capacity, particularly in Ontario and east. The supply
situation is tightening in western Canada as growth in consumption has
outpaced growth in generation. Industrial demand in Ontario and east is
showing signs of decline, with reduced output from manufacturing and mills as
economic growth slows, further alleviating concerns about the adequacy of
electricity supply.
    In addition, new sources of energy are factoring into the supply mix.
Concerns over greenhouse gas emissions, as well as the high cost of energy in
recent years, have helped to stimulate investment in new and cleaner
technology. Wind power has expanded rapidly in the past few years and that
trend is expected to continue. There is also renewed interest in nuclear power
generation, which has led to some facilities being refurbished, rather than

    The NEB is an independent federal agency that regulates several parts of
Canada's energy industry. The NEB's purpose is to promote safety and security,
environmental protection and efficient energy infrastructure and markets in
the Canadian public interest, within the mandate set by Parliament in the
regulation of pipelines, energy development and trade. As part of its mandate,
the NEB monitors the supply of all energy commodities in Canada and reports
its findings. The NEB Internet site is regularly updated with new energy
information for the Canadian public.

    This news release, a Fact Sheet and the Winter Outlook 2008-2009 are
available on the Board's Internet site at

For further information:

For further information: Tara O'Donovan,,
Communications Officer, Telephone: (403) 299-3371, TTY (teletype):

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