Changes in the domestic natural gas market in Canada are often referred to as deregulation. However, this is not really the case. The governments of the producing provinces retain the process of issuing "removal permits" and thus can control volumes of gas moving in interprovincial or international trade. The National Energy Board (NEB) will continue to regulate the tolls and tariffs of pipelines and long-term export volumes, and provincial commissions will continue to regulate local distribution companies (LDCs). What we are experiencing in Canada is a move to marketsensitive pricing for both domestic and export volumes, with its attendant problems and challenges and the reduction of government or regulatory intervention in several areas.
The change in Canada comes at a time of great uncertainty in energy markets. Oil prices have fallen to levels not seen since the mid-seventies. Natural gas prices in the United States have been partially deregulated and are responding quickly to market pressures. The transportation of gas in the United States is fast becoming a multi-faceted industry where consumers increasingly will be able to choose from an array of different services to meet their own particular requirements.
The rapidly changing circumstances resulted in an increase in volume and a decrease in price for C a n a h gas exports to the United States in 198411985. However, in the first five months of the current gas year, exports decreased by approximately 10 percent and price by 12 percent to an average of U.S. $2.85 per million Btu (mmBtu), measured at the intemational boundary.