Analysis:
How much is idealism vs how much is repeatable?

The perspective and market reality experience of the sources of any study should be acknowledged by the reader. Canada's Energy Outlook: 1996 - 2020 was produced by university-trained technical analysts employed by a government bureaucracy. The Report suggests a number of projections based upon historical performance, in expectation of real and expected impact from government introduced regulations and incentives, and from the intellectual idealism which imagines that theoretically possible changes will become a reality --- almost as quickly as they have been thought of. A difficulty arises in that such conclusions may be both accurate, helpful, and deceptive at the same time.

Technology transfer as suggested in the development of and implementation of more efficient and effective furnace, delivery and production technologies --- has always proven to be slower in creation and adoption, in reality, than in expectation.

A longer-term historical reality is revealed in some of the newspaper articles and journal articles, of which a few examples have been retained on this site. I am personally familiar with --- R2000 construction standards to produce more efficient thermal shells for both commercial and residential buildings. There has been a minor use of this technology/design since its introduction almost 15 years ago --- despite heavy promotion by both government and Ontario Hydro. Fundamentally, even the small utilization taken is almost solely applied to new housing --- leaving the great mass of established housing unaffected.

A positive impact of revised building standards was experienced during the 1970s, when insulation guidelines, requirements and alternatives were introduced to improve the energy efficiency of both commercial and residential structures. These energy demand improvements were attained by renovating existing structures, demolishing of older buildings, and the construction of the majority of today's structures --- as new construction.

Opportunity was Highest.
These implementations were undertaken during a period of general economic expansion and prosperity typified by consumer capital surplus, low or no debt government budgets, and high employment. All of these factors encouraged the introduction of new insulating products and a greater emphasis on quality than was possible during earlier more capital restricted periods. Implementation was relatively quick and thorough ... over a 15 year period. Potential for reductions in energy loss in residential structures between 1950 and 1980 equalled the difference between losses of 80% to 20%

Current Canadian economic realities do NOT encourage the adequate sustaining of Natural Gas supply from Alberta, NOR the ability to widely implement new and more efficient energy use technologies in the near future. These inabilities encourage the development of restricted supply to meet demand (and higher market pricing) reinforced by a market dissociation between user desires and user capabilities for action.

Public AWARENESS
As any Energy Marketer Representative can tell you, the majority of Ontarians are unaware of the decentralization of the Natural Gas industry in Ontario and most confuse the role of natural gas distribution and delivery with natural gas supply. While this is fundamental, and often leads to assumptions and resistance made by the public towards energy marketers --- even more elementary are the production and demand factors of the industry which can directly impact pricing.

While elementary, most Ontarians are unaware of the industry basics provided on this site, or linked to from this site. Without that awareness, there is little justification in the mind of the residence owner, or even many small business owners --- to consider price stabilization for a utility which seems required as a given, the cost of which is much less on a month-by-month basis than many of the other payments extracted from their bank account: mortgage, life insurance, car payment, credit card payment, second credit card payment, loan payment.

The unfortunate reality is that as a result of the ignorance and distraction of hundreds of thousands of users, an energy supply crisis is building (late 1998), and, an energy market deception has been enacted against many.

Canada has always been a "colonial" Natural Resource Supplier to the global economy. Development of such industries is capital intensive. Financing, in a capitalistic economy, governing "foreign" investments (from outside Canada into Canada) frequently require the display of a market demand BEFORE production facilities are built or extended. This is a Canadian reality in the Natural Gas industry.

Canadian pipeline construction is active, historically, when current pipeline capacity cannot meet demand. This has a tendency to make the development of supply (drilling) a partly cyclical service with participants dying off for lack of business during the period leading up to increased pipeline delivery capacity and decreased resource supply (i.e. December, 1998).

This historical pattern results in a period of HIGH PRICING during times when

• pipeline capacity is HIGH,
• natural gas demand is HIGH, and,
• natural gas supply is LOW,
  compared to the former factors.

In effect, drilling and engineering companies cannot bring producing wells into activity fast enough to replace dying wells (17% to 20% per YEAR), PLUS meet an increased demand (almost instantaneous) of 30%, resulting from the opening of new pipelines to foreign markets (USA).

The above brief will hopefully make the dynamics of the Natural Gas Industry easier for you to appreciate and understand. With that, YOU will be able to find and see your options for involvement in it with greater ease --- as either an energy user, and/or investor.

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