Thank you, Shelley.
Where do we stand today? I'm happy to say that it's largely a good news update.
Two weeks ago the NEB released a market snapshot highlighting the Canadian propane market's recovery from last winter. Wholesale propane prices that spiked to above 76¢ per litre in Edmonton and Sarnia in late January were trading in last week's spot markets at 16¢ per litre in Edmonton and 29¢ per litre in Sarnia.
The most striking change from where we were a year ago is the amount of propane in underground storage. Inventories in Canada, as mentioned earlier, are at an 11-year high, which is some 50% higher than a year ago and 30% higher than the five-year average. In the U.S., total storage is at record highs, up 40% from a year ago. As part of this, it's important to note that the Midwest crop-drying season has largely come and gone and did not result in as large a withdrawal of propane supplies this fall as was expected.
Canadian propane production at gas plants, after a few years of steady declines, has risen 9% in the last three years as producers increasingly target fields with higher proportions of liquids such as propane within the gas stream. Canadian gas plant production in 2013 is estimated at 162,000 barrels per day, and roughly another 30,000 barrels per day is produced at refineries across Canada.
Meanwhile, U.S. propane production has continued to surge, with producers there also targeting liquids-rich gas fields. U.S. gas plant production of propane has grown 45% since early 2012 to more than a million barrels per day. That is growth of more than 300,000 barrels per day. In other words, in just over two years the U.S. has added about double Canada's annual gas plant production of propane to the North American supply scene.
Alongside this, U.S. overseas exports have also increased, such that about three-quarters of this production surge has left the continent in search of new markets. However, as we saw last winter, when the North American market demands it, those volumes can become available to meet continental needs.
As always, winter weather is the big significant unknown. Last winter's unexpected polar vortex resulted in near-record cold temperatures for a prolonged period of time in key propane regions. In addition to the cold weather's driving up demand, it created logistical challenges in many regions for the movement of propane via truck and rail.
This year, Environment Canada and the U.S.'s Climate Prediction Center call for an average to warmer than average winter in the large propane-consuming regions, such as Ontario, the U.S. Midwest, and the U.S. Northeast. But whatever the coming winter weather brings, higher propane production and the much larger inventories suggest that the propane market is better positioned heading into this winter than it was a year ago.
Thank you, Mr. Chair.