HALIFAX – A study prepared for Nova Scotia’s provincial government says natural gas customers in the province are forced to buy the fuel from the New England market in the coldest months, driving up the price.
The study by ICF Consulting Canada Inc. says more natural gas storage is needed in the province to help moderate the price hikes in the winter.
Last winter, dwindling natural gas reserves coupled with price fluctuations prompted the province to launch the study on how it can secure a more stable supply.
It examined market demand, infrastructure needs and the flow of natural gas in the Maritimes and Northeast Pipeline, which is primarily used to ship gas to the northeastern U.S.
Natural gas prices in the province tripled in December, driving up costs for large industrial-scale users such as hospitals and universities.
Energy Minister Charlie Parker has said the price hikes were driven by a number of factors including market price volatility and a shrinking supply with the gradual winding down of ExxonMobil’s Sable offshore project, which began production in 1999.
Another factor contributing to the supply problem is the ongoing delay in the startup of Calgary-based EnCana’s (TSX:ECA) Deep Panuke project.