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8

Gas forecast: We won't run out, but we'll pay dearly

Natural Resources Minister Ralph Goodale offered ...

Natural Resources Minister Ralph Goodale offered Canadian motorists a good news/bad news outlook yesterday.

Drivers still complaining about the most recent price hike will grumble all summer about high gasoline prices. But at least they'll be able to keep driving to work, unlike consumers in parts of the United States where shortages are forecast.

"I would not foresee any major reduction of prices in the near term," Mr. Goodale said in an interview. He cited "a fairly tight supply period" as the reason.

Mr. Goodale's department is currently studying the future availability of gasoline sources in the wake of warnings from energy analysts that inventories at Canada's 19 refineries are low.

The minister wanted to wait for the report results next month before issuing a conclusion on whether Canada could experience the same shortfalls predicted south of the border.

In the past two weeks, gas prices have hovered around 75 cents a litre.

On April 12, prices bounced as high as 84.5 cents at at least one station, according to ottawagasprices.com, a Web site that tracks gas prices in Eastern Ontario and Western Quebec based on information supplied by motorists.

Yesterday, the site reported prices ranging from 72.9 cents in Bells Corners to 84.9 near Wakefield.

Meanwhile, federal figures show Canadians aren't doing themselves any favours as energy supplies shrink and prices rise. They continue to act like unabashed energy hogs. Last year, Canadians used more energy than ever before, with demand rising about 2.5 per cent after a similar hike in 1999, the National Energy Board has found.

The federal regulator's annual report says consumers used more energy to drive to work, turn on their TVs and warm their apartments during 2000, despite paying the highest commodity prices in a generation.

"People are not reforming their consumption habits," said David MacInnis, vice-president of the Canadian Association of Petroleum Producers, the lobby group for large oil companies. "We are addicted to energy, but a large part of it is the growing economy."

The basic laws of supply and demand dictate that as prices rise, consumption falls, but there is little indication that Canadians followed that rule in 2000.

For example, consumers across the country paid about 36 per cent more for natural gas -- prices shot up across the continent as more gas-fired power plants came on line. Yet, the NEB's estimates show space heating use jumped 4.2 per cent from 1999 levels.

Motorists also faced record pump prices last year, but the sale of gas-guzzlers kept pace with 1999 figures.

Anticipated demand and sources of supply are two of the topics to be addressed by energy officials in the North American working group announced this past weekend by Prime Minister Jean Chretien, U.S. President George W. Bush and Mexican President Vicente Fox. One of the task force's first jobs will be identifying concerns requiring immediate government attention.

Demand is also expected to outstrip supply in the case of electrical power. Brownouts are already being forecast in New York and the American southwest.

As energy moves more firmly to the forefront of the continental political agenda, Messrs. Chretien, Fox and Bush stressed the importance of conservation as a short-term measure while longer-term answers are sought to bring more petroleum products to market.

The fuel supply situation is being closely monitored, as it was last fall when it was widely predicted there wasn't enough home heating fuel for the winter. Mr. Goodale sought assurances from all provinces that they were on top of the potential problem and wrote the major refiners to get assurances that no matter what happened with supply in the United States there would be no shortages in Canada.

ottawacitizen.com