North America

Energy security, affordability, and emission reductions remain top priorities for North America’s natural gas industry.

» In Canada, the US, and Mexico industry leaders are showcasing to decision-makers the foundational role of gas energy for the current and future economic well-being of our respective countries, and our allies around the world. Natural gas production in North America continues to hit record levels and the industry is aligned in its message on growing its ability to support domestic and global energy security and emission reduction goals while maintaining affordability for consumers, underscored by consistent month-over-month low commodity prices.

US natural gas production levels continue to reach record highs, propelling the nation to become the world’s largest natural gas producer and LNG exporter.

» New natural gas transport and LNG infrastructure continues to be built, increasing the country’s ability to produce and export even more.

» The Biden administration’s aggressive emissions reduction agenda, as embodied in the Inflation Reduction Act, has faced more scrutiny since Republicans gained a majority in the House of Representatives after the last midterm elections.

» The US government continues to shower public dollars on what can broadly be called an electrification agenda. Despite that, the gas market – because of its fundamental strengths – is doing well.

A US official’s hint in late 2022, that gas stoves might be banned due to claims of health risks, opened a new front in America’s culture wars and unleashed a torrent of over-the-top headlines.

» US gas utilities are challenging the research behind the health risk claims, while also fighting the larger, more imminent threat of restrictions on new gas hookups being pushed by advocates who see total electrification as a necessary pathway to deliver on emission reduction targets. Gas industry advocates have pushed back, with 24 states – many with bipartisan support – passing “fuel choice” legislation preempting municipalities from banning natural gas use in buildings. Those states account for nearly one-third of US residential and commercial gas use. Similar legislation has been introduced in several other states.

» The industry also has notched victories in court, notably a ruling by the US Court of Appeals for the Ninth Circuit on April 17 overturning the Berkeley, California, municipal gas ban on the grounds that city officials overstepped their authority. The ruling was expected to be challenged, but experts say other bans may not be affected due to the ruling’s narrow focus on specifics of Berkeley’s law. It all points to a bigger battle over bans.

In Mexico, the Southeast Gateway project continues making progress and the federal government continues to show strong support for the development of new natural gas infrastructure, with a focus on increasing production and expanding pipeline networks to Mexico’s south, where gas shortages are common and scarcity drives up prices

» Domestic natural gas production has seen consistent growth, though the large majority of Mexico’s national gas demand is still met by imports from the US.

» Nearshoring is incentivising greater direct investment in manufacturing activities, and the government has funded large-scale infrastructure projects, like the development of the Transisthmic Corridor, the Dos Bocas Refinery, and the Mayan Train, all of which will increase the rate of growth for gas demand in the coming years.

» Industrial gas consumers, the power generation sector, and federal energy policy all recognise natural gas’ role in Mexico,

Where energies make tomorrow with significant investments from state power utility CFE in technology and equipment to fuel-switch fuel oil in power generation for natural gas and decrease power prices and related emissions. the industry is high, with both Canadian and US industries having record-high engagement at industry events this year.

» The natural gas industry has maintained an open dialogue with federal authorities following the renegotiation of several midstream transport contracts, and several joint ventures to finance new transport and LNG export infrastructure have been announced over the past year.

» The emissions-reduction, price-point, and reliability benefits of Mexico’s natural gas supply are broadly recognised by most major political parties, and it is likely the following federal administration will continue capitalising on Mexico’s access to inexpensive US gas imports through expansions to the pipeline network and building out of LNG export facilities.

» Building on that enthusiasm, CGA hosted a North American Natural Gas Summit in Calgary in March. The event is an important step in the effort to coordinate a broader public positioning exercise by the gas industry and its consumers in North America and will be followed by comparable events in Mexico (in 2024) and the US (in 2025).

» The growing global focus on gas makes North America’s hosting of LNG2023 in Vancouver in July all the more timely. The Canadian industry looks forward to welcoming the world and a robust conversation on the global opportunity for clean, affordable, reliable, and secure energy provided by LNG.