On the demand side, consumers are using more natural gas. In Canada, consumer demand is growing more than two per cent per year, while consumption in the United States has risen almost one third in the past decade. There has also been an increase in the use of natural gas to produce electricity. Many U.S. coal-fired power plants have been converted to natural gas. Currently 15 per cent of electricity is produced by gas-fired generators, and this percentage is expected to increase rapidly.
Weather is the largest factor affecting consumers of natural gas.
A cold, harsh winter will increase demand and drive up prices. There are also many factors that influence supply. Much of the natural gas produced during the summer months is placed in storage and used to supplement gas supplies during the winter months when demand is heaviest. Prior to 1998, Canada produced more natural gas than we needed but limited pipeline space prevented export of the surplus gas to the United States and kept prices artificially low. However, in 1998, pipeline expansions enabled surplus gas to be exported to the United States, and marked the end of excess supply in Canada.