Export and Import of Energy

The Commission regulates the following specific forms of energy:

Natural Gas and Natural Gas Liquids

The export of natural gas is authorized by the Commission under either long-term licences or short-term orders. Long-term licences no longer require a mandatory public hearing, and may be issued for up to 40 years subject to Minister’s approval in the case of a licence for the exportation of natural gas and 25 years in any other case. Short-term orders for a maximum period of two years can be issued without a public hearing and do not require Minister’s approval. The Commission does not regulate gas imports.

Natural gas exports occur at several major export points along the Canada/United States border. The volume exported depends upon market supply and demand, as well as available pipeline capacity. Imports of natural gas primarily enter Canada through Southern Ontario.

Propane, butanes and ethane are by-products extracted from natural gas processing. Commission approval is required for export, usually in the form of a short-term export order. All three products are classified as natural gas liquids.

The Commission monitors the supply and demand for natural gas and natural gas liquids, including the performance under existing export authorizations. This ensures that the quantity of gas and natural gas liquids exported does not exceed the surplus remaining after Canadian requirements have been met.

Oil

The Commission authorizes oil exports by issuing short-term orders for periods less than one year for light crude oil and less than two years for heavy crude oil. These exports occur under short-term orders due to characteristics of the oil market. The Commission does not regulate oil imports.

Canada produces enough oil to meet its own needs and has been a net exporter of oil for some time; however, oil is imported to supply both the Atlantic Provinces and Quebec. Most Canadian oil exports are to the American Midwest and Montana markets. Smaller volumes are shipped to the U.S. West and Gulf coasts.

The Commission monitors the supply and demand of oil, as it does with natural gas, to ensure quantities exported do not exceed the surplus remaining after Canadian requirements have been met.

Electricity

Public hearings are not held for permit applications. Normally, permits are issued to export electricity under a public written comment process. If the Governor in Council, after recommendation by the Commission, designates a particular application for licensing, the Commission may hold a public hearing, however, public hearings are no longer mandatory. The Commission does not regulate electricity imports.

Issues which the Commission considers when making its decisions include the effect of exports on adjacent provinces and fair market access for Canadians.

The amount of electricity exported is influenced by several factors. First, the amount exported cannot exceed the limits approved by the Commission. Secondly, the weather plays an important role because the majority of exports are generated by hydro-electric facilities; low water levels in Canada reduce the amount of power generated and the amount available for export. Strong domestic demand can also reduce quantities available for export. Finally, the economics of export transactions influence the amount sold.