U.S. gas supply from the Gulf of Mexico, Rockies and Canada will decline, says Bill Gwozd, vice president of gas services for Calgary-based Ziff Energy Group.

Gas production from the Gulf of Mexico has declined 9% per year since 2000, he says. The lack of new, robust drilling on the continental shelf, declining productivity and steep new-well declines are contributing to the decline.

There are fewer well completions in the Gulf, down to 500 per year in 2006, compared with 1,200 in 2000. Overall, Gulf gas production has fallen to 7 billion cubic feet per day, down from 14 billion in 2000. Daily gas output will likely decline to less than 6 billion cubic feet by 2015, he says.

Some wells that are shut-in due to hurricanes are never brought back online. "Hurricanes impact the non-economic wells the most," says Gwozd.

"If a well has been producing for several decades, but now is so far in decline that it is expected to produce for only another two or three years, the operator may choose not to bring that well back online."

Rockies gas output, while not in decline, is constrained by the lack of enough pipelines and other infrastructure. Even as pipelines are built to move Rockies gas to East Coast markets, those pipelines will become fully subscribed and new ones will be needed a few years later.

Meanwhile, industries and consumers waiting for gas supplies from a Mackenzie Delta or Alaskan pipeline will have a long wait. "If you want a good retirement job, get onboard this gravy train," says Gwozd.

Engineering reports and feasibility are continuously funded for proposals for both pipelines, but they will not be built anywhere near the present time, if ever. "They are trying to get gas resurrected from the dead," says Gwozd.

Because a Mackenzie or Alaskan pipeline would cost more than double the total liquefied natural gas (LNG) full-cycle cost, any new pipeline from that northern area seems unlikely.

Also, Western Canadian conventional gas production has been in decline since 1998, he says. "A decade ago, Western Canada had a '25% empty' sticker on it. Today, Western Canada is 50% empty. And another decade from now, it will be two-thirds empty, an indication of a basin in decline.

"So no great white hope here."

A continually larger percentage of Canadian-produced gas will be drafted into service for Alberta oil-sands production. "Oil sands currently consume about 0.6 billion cubic feet of gas per day. That's about 1% of North American supply. That's a big number. It is going to grow to 2- to 3 billion cubic feet per day."

Another big Canadian consumer of gas is Ontario. "They want to continue to blow up their coal plants, and use natural gas for power. There's nothing wrong with that. But in doing so, they will vacuum away the gas normally destined for the U.S. Northeast, and thus we will watch (people in the U.S. Northeast) freeze in the dark first."

On the other hand, LNG will increasingly be imported to the U.S., up from 2 billion cubic feet per day in 2007 to 13 billion in 2015. LNG normally contains gas liquids, an added value, which can be used in Gulf Coast petrochemical plants.