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Canadian Natural Gas Exports, Domestic Gas Prices, and Future Gas Supply Costs

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  • John Rowse

Abstract

Exports of Canadian natural gas hasten the day when Canadians must pay higher gas prices. Hence the desirability of exporting natural gas is strongly affected by current and future supply costs. In this paper I analyze the interaction of Canadian gas exports, domestic gas prices, and future gas supply costs using a multitemporal nonlinear optimization model of natural gas allocation. Maximizing the present value of Canadian consumer plus producer surplus and net revenues from export sales, this model allows for the spatial dispersion of gas reserves and domestic markets, the spatial dispersion of U.S. markets, differing recovery profiles for different supply options, and rising marginal costs of conventional gas supplies.

Suggested Citation

  • John Rowse, 1987. "Canadian Natural Gas Exports, Domestic Gas Prices, and Future Gas Supply Costs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 43-62.
    • Handle: RePEc:aen:journl:1987v08-02-a04
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    JEL classification:

    • F0 - International Economics - - General

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