US Natural Gas Imports by State
Value of Natural Gas Exports from Canada to USA Falls in 2009
Sep 11, 2009
According to Industry Canada's Trade Data Online, the United States of America imported US$30.56 billion worth of non-liquified natural gas from Canada in 2008.
The amount of US-imported natural gas represents a 15.9% gain from 2007 and a 47.1% surge since 2004.
For the first 6 months of 2009, Canadian natural gas exports to America slumped by 56% to $7.63 billion from $17.36 billion during the same period in 2008.
Natural Gas Imports by US State in 2008
Below is a summary the dollar value of natural gas that individual American states imported from Canada in 2008. Shown within brackets is the percentage of overall US natural gas imports that each state received during the year.
- Massachusetts … US$1.578 billion (5.2% of US total in 2008) – up 31.8% from 2007
- Michigan … $2.064 billion (6.75%) – up 23.2%
- Minnesota … $2.07 billion (6.77%) – up 22.6%
- Illinois … $5.051 billion (16.5%) – up 20.3%
- Montana … $114.7 million (0.4%) – up 17.2%
- Washington … $7.266 billion (23.8%) – up 17%
- Vermont … $187.2 million (0.6%) – up 13.1%
- New York … $7.48 billion (24.5%) – up 11.8%
- Tennessee … $3.48 billion (11.4%) – up 10.9%
- Iowa … $1.269 billion (4.2%) – down 3.1%.
Washington and Illinois together accounted for over 40% of the US total in 2008, and experienced hefty increases of 17% and 23.8% respectively. Other big natural gas importing states like New York and Tennessee had more modest gains in the low double digits.
Natural Gas Imports by US State for First 6 Months of 2009
From January to June 2009, Illinois and New York State experienced some of the most dramatic declines in the value of natural gas imported from Canada.
If the value of imported natural gas is an indicator of economic health, then it must be said that the pain was distributed evenly. Almost every US state saw natural gas imports go down in dollar value by at least 50%. The only exception was Vermont, a relatively small player in natural gas imports.
- Montana … US$18.9 million (0.25% of US total in 2009) – down 63.9%
- Massachusetts … $332.1 million (4.4%) – down 63.2%
- Iowa … $273.4 million (3.6%) – down 60.4%
- Illinois … $1.3 billion (17.2%) – down 58.2%
- New York … $1.7 billion (22.6%) - down 57.3%
- Tennessee … $820.4 million (10.8%) – down 57.1%
- Michigan … $584.7 million (7.7%) – down 53.5%
- Washington … $1.9 billion (24.4%) – down 53.3%
- Minnesota … $614.2 million (8.1%) – down 52%
- Vermont … $88.8 million (1.2%) – down 15.5%.
While natural gas has vital residential, industrial, power plant and commercial uses, but imported natural gas statistics cannot be used to directly monitor the economic health of a state.
For example, Montana had the biggest slide in natural gas imports from Canada by dollar value but had a relatively mild 6.1% unemployment rate as of July 2009. Vermont had the smallest decrease but had a 6.8% unemployment rate.
Natural Gas Prices Drive Import Supplies
And just because the dollar value of natural gas imported into the U.S. went down by 56% does not necessarily mean that the amount of imported natural gas went down by more than one half. This is because natural gas prices were much higher in 2008.
Extrapolating from price records on Madison Gas and Electric and charts on MetalPrices.com, the natural gas spot price per million Btu (British thermal unit) on the New York Mercantile Exchange spiked 80% from $7.60 in early January to $13.61 on June 30, 2008. Year-end 2008 capped a dramatic 50% retreat to the $7 level. Overall, the average spot price for natural gas was roughly $9.50 in 2008. In contrast, average natural gas prices for the first 6 months of 2009 were closer to $5 – about half the price one year earlier.
What this means is that even if the quantity of non-liquid natural gas shipped from Canada to America was to remain the same, a 50% decline in natural gas prices would cut the value of natural gas shipments in half.
According to the Financial Post article Signs of a gas bottom published back in January, up to 50% of North American gas production comes from wells drilled during just the past five years. Natural gas wells lose 30% or more of their production capacity after the first year and more than 50% after two years.
Low natural gas prices leads to cutbacks in the number of new wells being drilled. Less-productive existing wells and lack of new sources in turn constrains natural gas supplies. The resulting shortages should raise prices by mid-2010.
Only when natural gas prices rise will the dollar value of imported natural gas supplies from Canada go up significantly.
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