In recent years, despite record gas prices and record levels of drilling activity, the production of natural gas in the U.S. and Canada has failed to increase. In fact, natural gas production in the U.S. and Canada is expected to decline annually at a rate of close to 1.5 billion cubic feet per day.

In recent years, due to increasing demand and decreasing supplies, natural gas prices have risen sharply in the Northwest and across the nation. Despite record levels of North American natural gas exploration and drilling, production of natural gas in the U.S. is struggling to keep up with consumption. As an example, the natural gas imported through Bradwood Landing will have a dampening effect on prices throughout the region and will help hold down the rising costs of energy for millions of homes and businesses in the Pacific Northwest.

In its latest long range forecast, the Energy Information Administration foresees an increasing role for gas from unconventional sources such as coal beds and tight formations, which are more expensive to develop and produce than our dwindling supplies of conventional gas.

For the U.S., the only two available options to fill the growing gap between supply and demand are pipeline imports from Canada and imports of liquefied natural gas. However, Canada's consumption is increasing while its reserves have also begun an inevitable decline, contributing to the growing import shortfall to the U.S.

In addition, California and the Pacific Northwest gas markets are at the end of the North American pipeline system and import over 80% of their natural gas supply from neighboring states or Canada. As a result, these markets are at risk of supply disruptions caused by growth of demand in "upstream" gas markets as gas reserves in North America decline. All these factors add up to gas that will be more expensive to bring to the western U.S. than locally landed liquefied natural gas.