Natural gas exports dropped 41 per cent in 2015: report

Despite sending more natural gas south of the border, the value of B.C. energy exports saw a steep drop in 2015, according to a new report from BC Stats.

Natural gas led the way with a 41 per cent decline, owing to falling prices driven by a supply glut.

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The report, released Wednesday, compared the first 11 months of 2015 to the same period the year before. Natural gas fell from just under $9 U.S. in early 2014 to lows of under $2.50 through much of last year.

"In the case of natural gas, lower prices for the product was the reason for the drop in value, as the quantity shipped actually climbed 1.7 per cent," the report states.

It was a bad year all around for energy exports, which fell 24.4 per cent year over year. Coal and other energy products, including oil, fell 16.3 per cent and 30.9 per cent, respectively. Electricity exports, however, grew 29.4 per cent.

The fact that the quantity of gas grew while incomes shrank is explained by demand, said Art Jarvis of Energy Services B.C., an upstream oil and gas industry
association.

"Exports are directly tied to demand. Cold snaps have the biggest responsibility for higher consumption, of course," he said. "That would be my suspicion (for why export volumes grew)—a cold month."

He added that producers are often locked into long-term contracts with transmission companies, meaning they have to supply a given amount of gas per day regardless of price.

2015 saw some of the weakest oil and gas land sale totals in recent memory, totaling just $18 million. 

The coming year looks grim too, he said.

"Definitely the word from (producers in) Calgary is 2016 is going to be as bad. There's no real positive news out there right now," he said.

 

B.C. largely insulated from weak commodity prices

Despite falling commodity prices, overall B.C. exports were flat, "edging up only 0.1 per cent."

A 4.5 per cent growth in shipments to the U.S. offset weak demand in Mainland China, where exports fell 6.4 per cent. Also down were Japan (-3 per cent) South Korea (-13.7 per cent) the European Union (-6.8 per cent), and Hong Kong (-14.1).

The biggest gains were in India, Taiwan and Mexico. B.C. exports  to Mexico leaped 73.4 per cent last year.

Overall, it was a good year for the forestry industry, which saw exports grow 3.8 per cent. Softwood shipments grew by two points, led by double-digit growth in veneer, plywood and panel product
exports.

Mineral mining was down overall, largely due to drop-offs in molybdenum ore, zinc ore, unwrought aluminum and metallic mineral product shipments. That's despite a 1.9 per cent increase in copper ores and concentrates, which account for nearly two-thirds of B.C. mineral exports.

Food product exports climbed 19.4 per cent, but that's didn't necessarily translate into gains for Peace Region producers. While fruit and nut, vegetable, cereal and other product shipments were up as much as 35 per cent, there was little joy for vegetable oil and meat producers. According to the report, exports of those products were down 0.7 per cent and 7.5 per cent respectively.

reporter@dcdn.ca 

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