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Volatile Prices Energize Canadian Economy Says National Energy Board Report

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07/16
For immediate release
10 May 2007

CALGARY - Canada's booming energy sector pumped $51 billion in export revenue into the economy and directly employed 345 000 people last year said the National Energy Board in its Canadian Energy Overview 2006 Report.

The report, released today, says net revenue generated by Canadian energy exports jumped by six per cent from 2005 to 2006. This increase was fuelled mainly by an increase in crude oil and natural gas liquids exports. Energy exports made up 22 per cent of the total value of Canadian exports in 2006.

"The increase in both energy production and exports places Canada in an excellent position as an energy power on the world stage, said National Energy Board Chairman Kenneth Vollman.

This report also shows an encouraging trend that Canadians are beginning to use energy more efficiently than in years past, particularly for transportation."

For the first time in several years, Canadian crude oil exports outpaced natural gas exports. The estimated net value of crude oil exports topped $25 billion in 2006, a 58 per cent jump over 2005. Political instability in oil producing regions, limited spare production and refining capacity, and an increased global thirst for crude drove the price to a record US$78.40 per barrel in July. The average price for a barrel of crude in 2006 was US$66.

Mild weather and above average levels of natural gas in storage kept prices low in 2006. Net export revenues dropped by 24 per cent to $24.4 billion in 2006 compared to 2005. The threat of a repeat of the 2005 hurricane season buoyed prices until September when prices tumbled to $3.44/GJ, their lowest point since the market bottomed out in 2002, before closing the year at $5.74/GJ.

Canadians consumed more energy in 2006 but the 1.1 per cent increase in demand is lower than the five-year average increase of 1.8 per cent annually. This fall in consumption is largely due to a small drop in demand for transportation, which accounts for more than 20 per cent of energy consumption in this country and may indicate that Canadians are responding to higher gasoline prices by shifting their cars into park.

In 2006, domestic electricity demand was met. Net exports declined 26 per cent from 23.6 terawatt hours in 2005, to 17.4 terawatt hours in 2006.

The NEB is an independent federal agency that regulates several parts of Canada's energy industry. Its 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.

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For further information:

Sarah Kiley
Communications Officer
National Energy Board
E- mail: sarah.kiley@neb-one.gc.ca
Telephone: 403-299-3633
Telephone (toll free): 1-800-899-1265
Telecopier: 403-292-5503
Telecopier (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663

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