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Alberta Natural Gas overview

Alberta’s Natural Gas Market: Deregulated since 1985

Prior to 1985, the price of natural gas was set by agreements between the federal government and the Province of Alberta. With the signing of the Natural Gas Markets and Pricing Agreement on October 31st, 1985, otherwise known as the “Halloween Agreement”, natural gas prices are now determined by the competitive forces of supply and demand.

Production of natural gas in Alberta is regulated by the Energy Resources Conservation Board (ERCB), and by the Department of Environment. Natural gas is transported from the “wellhead” or natural gas processing plant through a provincial-wide natural gas pipeline network called NOVA. Rates and tariffs on the NOVA system are regulated by the Alberta Utilities Commission (AUC) primarily under the provisions of the Gas Utilities Act (Alberta) (GUA) and the Pipeline Act (Alberta).

The NOVA inter-provincial system acts much like a highway, moving large quantities of natural gas through a high-pressure, high volume pipeline. From the NOVA system, natural gas transfers either into an export pipeline at the BC, Saskatchewan, or Montana border, or to a low-pressure local distribution pipeline system. The distribution system delivers the gas directly to the end-user, acting more like a smaller and more local road system. The distribution systems are fully regulated. Investor-owned distribution companies are regulated by the Alberta Utilities Commission, while municipally owned systems are regulated by their municipal councils, and natural gas co-operatives are regulated by their elected board members.

Source: Alberta Utilities Commission