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Natural gas producers struggling

Natural gas producers have seen better days. The price of natural gas is sitting near a decade low, while storage levels are at record highs for this time of year.

With the rise of the controversial method of 'fracking', which allows producers to tap deposits previously out of reach, the industry is facing the possibility that low prices will remain. Many producers have already slashed production levels in an attempt to put a floor on sinking prices.

ARC Resources (ARX-T) CEO John Dielwart tells BNN that the current price environment simply cannot be sustained for natural gas producers.

"The industry will not earn adequate returns at this price level," he says. "Pure gas flow companies don't have enough cash flow to execute the plans they want to execute, therefore supply will start falling off more rapidly."

"The key to a recovery will be a combination of less robust supply, but also greater demand."

Dielwart also says Canada must consider new markets for its natural gas, outside of North America, as the growing number of domestic producers tap new reserves.

"You could make a case that three to five years from now the U.S. doesn't need any imports [of natural gas] from Canada," he says. "The current plans to build export LNG projects by the larger players off the West Coast of Canada will be very important for the Canadian natural gas industry." CTV Two CTV News CTV News Channel BNN - Business News Network CP24