On low natural gas prices: Frontier Centre for Public Policy

From the Frontier Centre for Public Policy

To say that “natural gas is a dying commodity” takes either some world-class mental dishonesty, disturbingly blind faith in policy over reality, or some kind of “clouds hate me” philosophical stance on life.

Is there any critical industrial material as bizarre as natural gas?

The stuff holds almost zero interest for the general public, for the same reason no one is interested in the sound of a washing machine. Both boring. Both ubiquitous. Natural gas isn’t even sold on Amazon. But forty-six percent of American homes use natural gas for heat, and surely more in Canada.

But consider the storm below the surface. Traders love it, because it is one of the most volatile commodities in existence, and volatility means trading profits. The volatility, at the slightest provocation, is almost unbelievable at times. The weather pattern shifts for three weeks out over a portion of the US and boom – the entire forward 18 months of prices can collapse or soar.

In the bigger picture though, natural gas today in North America trades at close to the same price it did a quarter century ago – not inflation adjusted, just the same old nominal dollar value, which is astonishing since global gas demand has increased by 60 percent in that time.

Natural gas is a critical fuel for much of the world, and usage is growing, particularly the relatively new field of LNG. According to the Global Gas Infrastructure Tracker website, which doesn’t even like the stuff, there are a total of 2,449 significant pipeline projects underway in the world for a total of 1.2 million kilometers (and that’s the big pipe, not the little straws that go to your house). There are 238 LNG import terminals and 189 export trains in development globally. One hundred and thirty countries either have natural gas systems or are constructing them.

Traders, consumers and businesses love the stuff even if they don’t say it often enough, while others loathe it because it is a ‘fossil fuel’. Natural gas is caught in an existential war whereby said opponents will do everything in their power to just make it go away (they really think they can). The Toronto Globe and Mail, “Canada’s news paper” (note to self: develop ethnocentric balloon head emoji, make millions), recently ran a pricelessly ludicrous opinion piece entitled ‘Natural gas is a dying commodity, and Canada needs to stop supporting it’. The article was written by one of those think tanks (International Institute for Sustainable Development) that produces nothing but ideological amplification, safely distanced from people that actually do stuff, and a mountain of impressive T4 income tax slips (latest fiscal year personnel/consultant expense: $33 million). There is no surprise that their team of political scientists would attack natural gas; their latest financials show that the Government of Canada granted them $40 million, a third of which is from climate activist/federal minister Guilbeault’s office. There’ll be no biting that little hand.

Many climate leadership icons of the world, the US, Canada, Western Europe, Japan… pretty much anyone that can, is building natural gas (LNG or non) infrastructure as fast as they can. Germany, home to the world’s most advanced green energy demolition derby, built an LNG import terminal in an astounding 5 months. Many that want to import LNG but weren’t able to last year because Europe hoovered up every molecule on the market are simply doing what it takes to attain energy security, and that can mean, lord tunderin’, coal. Pakistan is the most notable example – the country plans to quadruple coal fired power output and move away from gas only because it could not obtain it: “A shortage of natural gas, which accounts for over a third of the country’s power output, plunged large areas into hours of darkness last year.” The country’s energy minister went on, “We have some of the world’s most efficient regasified LNG-based power plants. But we don’t have the gas to run them.”

For those fortunate enough to line up LNG supplies, the ante is normally a 15-20 year contract.

To say that “natural gas is a dying commodity” takes either some world-class mental dishonesty, disturbingly blind faith in policy over reality, or some kind of “clouds hate me” philosophical stance on life.

Beyond the silly messaging looking to undermine natural gas though are some very powerful undercurrents that are shaping the world in ways most don’t consider, but they should.

Thanks to the shale revolution in the US and Canada, native natural gas production exploded onto a scene that couldn’t handle the excess, leading to persistently low prices. North America is turning into an LNG export powerhouse, but until that export capacity outpaces productive capability, natural gas prices in North America look set to remain far below global prices.

It is worth remembering how significant this scenario is for North America. Cheap natural gas is an industrial godsend, enabling many strata of industries and enterprises that simply would not exist without. In May of 2022, the head of the Western Equipment Dealers Association, said that the previous winter’s high natural gas prices were unsustainable for businesses that had to heat 30-40,000 square-foot shops. The 2021-22 winter of which he was discontented saw Henry Hub prices average $4.56/mmbtu – about a third of global prices, and a fraction of what the world was to face later that year.

The same article pointed out how the Industrial Energy Consumers of America, a trade group whose members include smelters, plastics and paper-goods makers, wanted the US to stop permitting new LNG export terminals because “The manufacturing sector cannot invest and create jobs without assurances that our natural gas and electricity prices will not be imperiled by excessive LNG exports.”

Those guys aren’t crazy. The US gas market is balanced on a knife edge. A change in next month’s forecast can create havoc in forward prices even up to several years out.

The rise of LNG is making things even more unstable. The Freeport LNG terminal had an 8 month outage due to an accident, removing 2 bcf/d of demand from the market (in a 100 bcf/d market); this single event caused a storage surplus in the US that has depressed natural gas prices ever since. All else being equal, the US natural gas storage scene would be in a deficit to the five year average as opposed to today’s surplus if Freeport had not gone down, and both spot and futures prices would most likely be significantly higher. The Freeport outage probably knocked US natural gas prices down by at least $1/mmbtu for a period of 8 months, and actually probably much more. But even at that level, in a 100 bcf/d market, where 1 bcf is equal to 1 million mmbtus, the cost savings to US consumers totaled $100 million per day. (Of course, had the price stayed higher, we might have seen far more drilling, which may have caused a collapse as well, just a bit further down the road.)

That $100 million per day cost saving came out of the hide of North American natural gas producers selling into that market, and you’d think they wouldn’t like that one little bit. And they don’t. But gas producers have their own realities and game plans which don’t generally involve sacrificing any of their sales for the good of all other producers, as economically sensible as that strategy may be.

US producers find themselves in an odd situation. Every one of the large producers knows that they could cut production by 5 percent and double their profits; the market is that tightly balanced. Doing so would single handedly drive up NG prices substantially – just observe how the gas market goes ape over a change in weather forecast.

But driving up prices, even if it is in their own self interest, will mean a spike in production, because at sustained $4 US gas, the market becomes flooded. EQT president Toby Rice, the largest US gas producer (EQT, not Toby), says at a sustained $4/mmbtu natural gas price, the US could export 60 bcf/d of natural gas. Keep in mind that $4 gas is a fraction, anywhere from a third to ten percent of global LNG prices.

Mr. Rice may very well be correct, but glosses over the reality of natural gas prices: we will never see a sensible sustained price like $4, even though we may average it – we will see 2 and 8 and 3 and 9 and so on and so on.

On top of this, solution gas from oil plays like Permian is providing massive amounts of gas in itself. The Permian, primarily an oil field, produces more solution gas than the entire country of Canada. Permian solution gas, if a stand alone country, would be one of the world’s top five largest producers.

So who cares? Well, you all do. We all do. The goofballs that wrote the Globe & Mail article do, though they either won’t admit it or simply refuse to understand.

Natural gas is the bedrock of most economies, and cheap natural gas is a special elixir to North America. It is absolutely crucial to the level of industrial activity we enjoy. There is no substitute for the clean burning capability of the stuff. Wander into a typical big box store or more crucially try to wander into an industrial building that you won’t be allowed to because it is unsafe… drive around an industrial park and look at all the magnificent industrial activity that gives us the life we live. Now imagine those being heated by wood stoves. Or solar panels in dead of winter. Geothermal? Sure, if you plan on drilling into the earth’s mantle. And if you live on an appropriate acreage. And have enough money. I guess there’s always coal.

And that sums up a lot of the world’s population’s situation: If countries aren’t building LNG, it’s likely because they are building coal, as in the countries that Europe outbid for LNG last winter in a shocking me-first display of hydrocarbon-swilling (accompanied by fossil-fuel-subsidizing self-loathing?) hypocrisy.

There are storm clouds on the horizon. The drilling efficiency that these companies boast about relentlessly in IR presentations and every 90 days in conference calls consists to a large degree on drilling longer horizontal wells. Do the math on that one. Reservoirs are finite in size. If you increase the length of wells by another mile or two, you’re just draining the reservoir faster. One day we will see true sweet spot exhaustion, which is not a laughing matter when one considers that three fields – Appalachia, Haynesville and Permian – account for more than 70 percent of US gas production, and about a fifth of global production.

But for now, North America reigns supreme with respect to the world’s most coveted heating and industrial fuel. The US, Canada and Mexico remain more or less isolated from global natural gas prices for now, which brings incalculable benefits to North American businesses and citizens, a benefit that shouldn’t be taken for granted.

Terry Etam is a columnist with the BOE Report, a leading energy industry newsletter based in Calgary. He is the author of The End of Fossil Fuel Insanity. You can watch his Policy on the Frontier session from May 5, 2022 here.

Related Topics:#FrontierCentreForPublicPolicy #OnLowNaturalGasPrices #TerryEtam

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The great policy challenge for governments in Canada in 2026

Published on January 1, 2026

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From the Fraser Institute

By Ben Eisen and Jake Fuss

According to a recent study, living standards in Canada have declined over the past five years. And the country’s economic growth has been “ugly.” Crucially, all 10 provinces are experiencing this economic stagnation—there are no exceptions to Canada’s “ugly” growth record. In 2026, reversing this trend should be the top priority for the Carney government and provincial governments across the country.

Indeed, demographic and economic data across the country tell a remarkably similar story over the past five years. While there has been some overall economic growth in almost every province, in many cases provincial populations, fuelled by record-high levels of immigration, have grown almost as quickly. Although the total amount of economic production and income has increased from coast to coast, there are more people to divide that income between. Therefore, after we account for inflation and population growth, the data show Canadians are not better off than they were before.

Let’s dive into the numbers (adjusted for inflation) for each province. In British Columbia, the economy has grown by 13.7 per cent over the past five years but the population has grown by 11.0 per cent, which means the vast majority of the increase in the size of the economy is likely due to population growth—not improvements in productivity or living standards. In fact, per-person GDP, a key indicator of living standards, averaged only 0.5 per cent per year over the last five years, which is a miserable result by historic standards.

A similar story holds in other provinces. Prince Edward Island, Nova Scotia, Quebec and Saskatchewan all experienced some economic growth over the past five years but their populations grew at almost exactly the same rate. As a result, living standards have barely budged. In the remaining provinces (Newfoundland and Labrador, New Brunswick, Ontario, Manitoba and Alberta), population growth has outstripped economic growth, which means that even though the economy grew, living standards actually declined.

This coast-to-coast stagnation of living standards is unique in Canadian history. Historically, there’s usually variation in economic performance across the country—when one region struggles, better performance elsewhere helps drive national economic growth. For example, in the early 2010s while the Ontario and Quebec economies recovered slowly from the 2008/09 recession, Alberta and other resource-rich provinces experienced much stronger growth. Over the past five years, however, there has not been a “good news” story anywhere in the country when it comes to per-person economic growth and living standards.

In reality, Canada’s recent record-high levels of immigration and population growth have helped mask the country’s economic weakness. With more people to buy and sell goods and services, the overall economy is growing but living standards have barely budged. To craft policies to help raise living standards for Canadian families, policymakers in Ottawa and every provincial capital should remove regulatory barriers, reduce taxes and responsibly manage government finances. This is the great policy challenge for governments across the country in 2026 and beyond.

Ben Eisen

Senior Fellow, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

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Land use will be British Columbia’s biggest issue in 2026

Published on December 31, 2025

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By Resource Works

By Geoff Russ

British Columbia will talk about Donald Trump’s tariffs in 2026, and it will keep grinding through affordability. But the issue that will decide whether the province can build, invest, and govern is land use.

The warning signs were there in 2024. Land based industries still generate 12 per cent of B.C.’s GDP, and the province controls more than 90 per cent of the land base, and land policy was already being remade through opaque processes, including government to government tables. When rules for access to land feel unsettled, money flows slow into a trickle.

The Cowichan ruling sends shockwaves

In August 2025, the Cowichan ruling turned that unease into a live wire. The court recognized the Cowichan’s Aboriginal title over roughly 800 acres within Richmond, including lands held by governments and unnamed third parties. It found that grants of fee simple and other interests unjustifiably infringed that title, and declared certain Canada and Richmond titles and interests “defective and invalid,” with those invalidity declarations suspended for 18 months to give governments time to make arrangements.

The reaction has been split. Supporters see a reminder that constitutional rights do not evaporate because land changed hands. Critics see a precedent that leaves private owners exposed, especially because unnamed owners in the claim area were not parties to the case and did not receive formal notice. Even the idea of “coexistence” has become contentious, because both Aboriginal title and fee simple convey exclusive rights to decide land use and capture benefits.

Market chill sets in

McLTAikins translated the risk into advice that landowners and lenders can act on: registered ownership is not immune from constitutional scrutiny, and the land title system cannot cure a constitutional defect where Aboriginal title is established. Their explanation of fee simple reads less like theory than a due diligence checklist that now reaches beyond the registry.

By December, the market was answering. National Post columnist Adam Pankratz reported that an industrial landowner within the Cowichan title area lost a lender and a prospective tenant after a $35 million construction loan was pulled. He also described a separate Richmond hotel deal where a buyer withdrew after citing precedent risk, even though the hotel was not within the declared title lands. His case that uncertainty is already changing behaviour is laid out in Montrose.

Caroline Elliott captured how quickly court language moved into daily life after a City Richmond letter warned some owners that their title might be compromised. Whatever one thinks of that wording, it pushed land law out of the courtroom and into the mortgage conversation.

Mining and exploration stall

The same fault line runs through the critical minerals push. A new mineral claims regime now requires consultation before claims are approved, and critics argue it slows early stage exploration and forces prospectors to reveal targets before they can secure rights. Pankratz made that critique earlier, in his argument about mineral staking.

Resource Works, summarising AME feedback on Mineral Tenure Act modernisation, reported that 69.5 per cent of respondents lacked confidence in proposed changes, and that more than three quarters reported increased uncertainty about doing business in B.C. The theme is not anti consultation. It is that process, capacity, and timelines decide whether consultation produces partnership or paralysis.

The legal layer

Layered on top is the widening fight over UNDRIP implementation and DRIPA. Geoffrey Moyse, KC, called for repeal in a Northern Beat essay on DRIPA, arguing that Section 35 already provides the constitutional framework and that trying to operationalise UNDRIP invites litigation and uncertainty.

Tariffs and housing will still dominate headlines. But they are downstream of land. Until B.C. offers a stable bargain over who can do what, where, and on what foundation, every other promise will be hostage to the same uncertainty. For a province still built on land based wealth, Resource Works argues in its institutional history that the resource economy cannot be separated from land rules. In 2026, that is the main stage.

Resource Works News