An influential Canadian politician said yesterday that the export price for Canadian natural gas will be sharply increased to match the price negotiated by the Carter administration for Mexican gas.
The Canadian move is expected to cost well over $1 billion in additional charges annually to U.S. consumers on the West Coast, northern tier states and New England. Canada is the largest foreign supplier of natural gas to the United States. Some areas such as the Pacific Northwest, get roughly 80 percent of their energy needs from Canada.
Peter Lougheed, premier of the western Canadian province of Alberta, told a press conference that the decision would be announced "shortly" in Ottawa. It will be the second time this year that the Canadians would hike the price on roughly one trillion cubic feet of gas exported to the United States.
The Carter administration last month agreed to pay $3.62 per thousand cubic feet of Mexican natural gas. Earlier this year Canada was selling its gas to U.S. companies at $2.16 per thousand cubic feet but in last August the price was raised to $2.80. Officials said the price would come close to $3.50 per thousand cubic feet next month.
Alberta is the principal Canadian energy producer, providing 90 percent of Canada's oil production and most of is natural gas production.
Since mineral rights in Canada belong to the provincial government -- not the federal government in Ottawa -- Lougheed and his provincial government have considerable influence on Canadian energy policies.
The Alberta premier was here for talks with Energy Secretary Charles Duncan, Agriculture Secretary Bob Bergland, Sen. Henry Jackson (D-Wash.) and a series of senior officials.
U.S. sources said that Lougheed told them that it was "politically unacceptable" for Canadian politicians to continue natural gas exports to the United States at prices below those negotiated for purchases of Mexican gas.
Lougheed told newsmen that he told American officials that additional exports of Alberta gas to the United States would depend on tariff easements on Canadian agricultural goods exported to the United States, especially on meat products.
He said he was opposed to the idea of a North American common market and continental energy policy because, he said, "that would deplete our resources" while favoring U.S. economy.
But, he said, he was in favor of cooperative agreements, adding that Alberta would be willing under certain conditions to commit its vast financial resources to help build the Alaskan pipeline project.
Apart from running budgetary surpluses, Alberta created in 1976 a separate savings account -- the so-called Heritage Fund -- for excess royalties from gas and oil. The account has swelled to well over $5 billion and is growing by about $3 million each day.
Compared to the annual U.S. production of 22 trillion cubic feet, Canadian gas sales are relatively small. But Canadian gas is important strategically because it serves some areas that have little or no alternative energy supplies, such as the Pacific Northwest and some hard-pressed Rocky Mountain States.
Another major market is California, where gas is the preferred fuel in power generation for environmental reasons.