Natural gas prices in Alberta are based on competitive market prices, and are influenced by supply and demand, weather, storage, pricing and availability of alternative energy sources, exploration and production levels, and market participants' views of future trends. Like electricity, natural gas rates are made up of two main components: the cost of supply, and the cost of distribution. The price per gigajoule (GJ) varies depending on the location, type of supply plan, and quantity consumed by the customer.
Did you know? The average residential household customer in Alberta consumes about 120 GJ per year
How do natural gas prices in Alberta compare with other provinces?
Source:Government of Manitoba
As the major natural gas-producing province in the country (69% of Canada's natural gas production is from Alberta), Alberta enjoys abundant supplies of natural gas. In fact, according to Alberta Energy, Alberta residential consumers pay almost 32% less than the national average for their natural gas. Natural gas prices are lower in Alberta than elsewhere in Canada because of this large supply at close proximity. As consumers in Alberta do not have to pay large transportation costs, residential gas prices in Alberta are therefore more closely linked to the wholesale market than in other provinces.
How have natural gas prices evolved over time?
Source: Alberta Energy
Wholesale natural gas prices dropped sharply in 2009 compared to previous years, with the development of shale gas exploitation in the US and subsequent reduced demand for Albertan natural gas exports. Albertan production has been decreasing since 2006, though this reflects decreasing Albertan exports, and has not affected Albertan access to supply. Though prices increased with the particularly cold winter of 2013-14, prices are expected to remain fairly low in the near term, and rise slowly.