May 21, 2013 Groton, CT Is New England Over-Reliant On Natural Gas? Presentation to: Northeast Energy & Commerce Association Annual Energy Conference Thomas M. Kiley Northeast Gas Association
NO but let me elaborate further.
Continued on NGA web site http://www.northeastgas.org/about-nga/antitrust-guidelines
Strong Production, Extensive Resource Base Source: U.S. EIA, 5-9-13 Source: Potential Gas Committee, 4-9-13
BENTEK: Northeast Production Continues Growth Bcf/d 18.0 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2013 10.7 Bcf/d 2018 16 Bcf/d Chart: BENTEK Energy. Presented at NGA Market Forum, April 30, 2013.
Shale Gas Basins, U.S. and Canada Map: International Energy Agency (IEA) 25.
Lower Commodity Price 12 10 8 6 4 2 0 Sep-2011 Jan-2002 May-2002 Sep-2002 Jan-2003 May-2003 Sep-2003 Jan-2004 May-2004 Sep-2004 Jan-2005 May-2005 Sep-2005 Jan-2006 May-2006 Sep-2006 Jan-2007 May-2007 Sep-2007 Jan-2008 May-2008 Sep-2008 Jan-2009 May-2009 Sep-2009 Jan-2010 May-2010 Sep-2010 Jan-2011 May-2011 Jan-2012 May-2012 Sep-2012 Henry Hub Average Monthly Price, 2002-2012 Source: Source: FERC U.S. EIA
Projected Commodity Price Source: Source: FERC U.S. EIA, 2013 Annual Energy Outlook
Lower Air Emissions 400,000 300,000 200,000 100,000 0 SO 2 and NOx Emissions, New England Electric Power Industry 1990-2010 1990 2000 2010 NOx SO2 Source: U.S. EIA 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 CO2 Emissions, New England Electric Power Industry, 1990-2010 1990 2000 2010 T g C O 2 180 170 160 150 140 130 CH4 Emissions, U.S. Natural Gas Systems 1990 2011 E 1990 2005 2007 2008 2009 2010 2011 q. Source: U.S. EPA, "Inventory of U.S. Greenhouse Gas Emissions and Sinks, 1990 2011", released 4 13
Continued Investments in Gas Efficiency Natural Gas Efficiency Program Budgets, New England, $ million 2012 188 2010 104 2008 46 0 50 100 150 200 Source: Consortium for Energy Efficiency
Over-Reliant in What Sector? Potential growth sectors Home Heating Transportation Power Gen 37% of New England homes heat with gas With price difference from oil, everyone wants gas Alternative fuels are a fraction of the regional transport market CNG and LNG offer price (and emissions) savings, esp. for heavy-duty fleets Gas remains leading choice along with Renewables. If not gas, what?
What Decade is This Anyway?
New England Annual Gas Consumption by Sector 2011 2004 2000 Residential Commercial Industrial Power Gen 0 100 200 300 400 500 600 700 800 900 1,000 Billion cubic feet Source: U.S. Energy Information Administration
Gas Power Plants in Region: Firm vs. Non-Firm Source: Repsol
Securing Pipeline Capacity The pipelines operate as they are designed on peak days Facilities are designed to support primary firm obligations Most generators in region do not have firm contracts back to a liquid supply point On peak days, only firm services will be assured flow Absent firm commitments, generators may not have gas supplies to meet electric generation needs Generators indicate that the regional electric market does not provide incentives for them to enter into firm contract arrangements, or to utilize alternate fuel back-up Infrastructure counts Pipeline investments would ease regional gas constraint points and lower prices pending customer commitments
Constraint Points Source: U.S. EIA, 1-25-13
TGP: Restrictions of Various Interruptible Services: Winter Period Northeast Locations Comp. Station #245 Comp. Station #315 Comp. Station #321 Percent Days Restricted (Nov Mar) Description 2009/2010 2010/2011 2011/2012 W. Winfield NY flowing all points east Wellsboro, PA flowing west, south Eastern PA flowing east 41.72% 96.03% 99.34% 0.00% 25.17% 90.79% 37.75% 47.68% 9.21% * Comp. Station #325 NW NJ east to NJ,NYC, SW CT 0.00% 86.75% 6.58% * * TGP footnote: Dramatic reduction in restrictions post 300 Line Expansion placed in service Nov. 2011 Source: Tennessee Gas Pipeline/Kinder Morgan
Projects In-Service This Year (all outside New England) Tennessee s Northeast Upgrade : 636 MMcf/d Tennessee s MPP Project : 240 MMcf/d Millennium s Minisink Compressor : 150 MMcf/d National Fuel Gas s Line N : 30 MMcf/d Transco s Northeast Supply Link : 250 MMcf/d Spectra s NJ-NY Expansion : 800 MMcf/d Photos courtesy of Spectra Energy, 12-12
Where Do We Go From Here? The power market in New England is over-reliant on nonfirm gas transportation. Other questions that seem directly relevant: Where would the power market in New England be, today, and for next decade and more, without natural gas as the major fuel input? Is it not long past time to re-evaluate the power market design in New England and implement real changes, to ensure reliability, and to access more fully the opportunities presented by natural gas to the region?