Introduction

A "North American energy market" is not a new concept. The energy industry has long operated in a very integrated way in North America, and transportation infrastructure has been built to support that.

Now, with a large and growing demand for natural gas to meet North American energy requirements, it is important that all sectors of the gas industry value chain be innovative and that an efficient transportation infrastructure supports this innovation.

Enbridge How does Enbridge Inc., fit into the natural gas picture? Enbridge is a Calgary-based company that is a leader, in North America and internationally, in energy transportation and distribution. As a transporter of energy, Enbridge operates, in Canada and the U.S., the world's longest crude oil and liquids pipeline system. We are also involved in liquids marketing, and we are a major player in natural gas distribution through Enbridge Consumers Gas, which is the largest natural gas distribution company in Canada.

We have also become a major player in the natural gas transmission business. As part of our westto-east strategy for gas, we were one of the original participants in the $3 billion U.S. Alliance Pipeline transporting Western Canadian gas to Chicago and the lead sponsor for Vector Pipeline which transports gas from Chicago to Michigan and Ontario.

Last year we completed the acquisition of Midcoast Energy Resources of Houston. Midcoast operates 4,000 miles of transmission, gathering and end-user pipelines in 10 states and the Gulf of Mexico. Midcoast significantly increases our exposure to natural gas assets, adds to the scale of our U.S. operations, and gives us a presence in the Gulf Coast and mid-continent regions.

Enbridge International includes operations in Venezuela, Colombia, Oman and Spain, and Enbridge Technology has provided advisory and training services in 40 countries around the world.

Natural Gas - The In the 1990s many technical and cost efficiency gains occurred in the exploration and development Recent Past of new gas reserves in North America. This has enabled producers to keep pace with rising demand for gas with fewer drilling rigs and at a lower gas pricing structure than anticipated through much of the 1980s. As this trend continues, natural gas producers have to vigorously compete to maintain market share, as new sources of supply (e.g., Deepwater Gulf of Mexico) become available. All this production led to the construction of more than 300,000 miles of gas pipelines in the U.S. and Canada alone.

The 1990s also saw increased trade between the United States, Canada, and Mexico, in part, as a result of the North American Free Trade Agreement (NAFTA). Regional markets are more open and, as a result, new opportunities began developing. New natural gas pipelines were developed in BLOCK 3 - - FORUM 14 1 EVOLVING NORTH AMERICAN ENERGY MA

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