January 30, 2010 National Conference of State Legislatures Savannah, Georgia Christopher B. McGill Managing Director, Policy Analysis
U.S. Natural Gas Supply and Infrastructure Additions Points of Discussion Stability of domestic natural gas supply Underground storage Long-term supply abundance and diversity Pipeline and storage infrastructure Liquefied natural gas Pipeline imports from Canada
Billion Cubic Feet per Day U.S. NATURAL GAS SUPPLY (2007-2009) Average Daily U.S. Natural Gas Supply 70 62.6 63.1 62.9 2.1 1.0 1.2 60 8.8 8.2 7.0 50 40 LNG 30 51.7 53.9 54.7 Canadian Imports U.S. Production 20 10 0 2007 2008 2009 Source: Benter Energy LLC, Energy Market Fundamentals.
Billion Cubic Feet per day U.S. NATURAL GAS PRODUCTION AND SAMPLE (JANUARY 21, 2010) 60.0 50.0 Total Production 57.9 40.0 30.0 20.0 10.0 Ext. Loss 2.5 Appalachia 2.0 Mid-Con 4.3 West 12.8 Gulf 16.7 0.0 Source: Benter Energy LLC, Energy Market Fundamentals, January 21, 2010.
Billion Cubic Feet per day 80.0 Natural Gas Supply Sources (July 1-December 31, 2009) 70.0 60.0 50.0 40.0 30.0 LNG Imports Canada Imports US Production 20.0 10.0 0.0 July December Source: Benter Energy LLC, Energy Market Fundamentals, December 31, 2009.
Data source: Potential Gas Committee (2009) U.S. Natural Gas Reserves (1977-2008)
Energy Information Administration Reserves and Production of Dry Natural Gas in the United States (TCU) EIA Dry Gas Year Reserves Production 1990 169 17.8 1992 165 17.8 1994 164 18.8 1996 166 18.9 1998 164 19.0 2000 177 19.2 2002 187 18.9 2004 193 18.6 2006 211 18.5 2008 245 20.4
U.S. Natural Gas Infrastructure Additions Underground Storage Working Gas(Bcf) Estimated Peak Capacity Working Gas(Bcf) Design Capacity April 2008 3,789 4,136 April 2009 3,889 4,313 Source: Estimates of Peak Underground Working Gas Storage Capacity in the United States-2009 Update, Energy Information Administration, September 2009.
Bcf per day Daily U.S. Natural Gas Demand By Sector January 1, 2007-December 31, 2009 120.0 100.0 80.0 60.0 40.0 Power Gen Industrial Res/Com 20.0 0.0 Jan 2007 Jan 2008 Jan 2009 Source: Benter Energy LLC, Energy Market Fundamentals.
Quadrillion Btu U.S. NATURAL GAS CONSUMPTION BY SECTOR (EIA, AEO 2010-2035 REFERENCE CASE) 30.00 25.00 20.00 15.00 10.00 5.00 Power Generation CNG Pipeline Fuel Lease and Plant Fuel Industrial Commercial Residential 0.00 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 10
Trillion Cubic Feet U.S. Natural Gas Supply EIA, AEO 2010-2035 Reference Case 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Dry Gas Production Net Imports 11
Natural Gas Resource Assessment of the Potential Gas Committee, 2008 (mean values) Traditional Resources Coalbed Gas Resources Total U.S. Resources Proved Reserves (EIA) Future Gas Supply 1,673.4 TCU 163.0 TCU 1,836.4 TCU 237.7 TCU 2,074.1 TCU POTENTIAL GAS AGENCY * Value as of year-end 2007 COLORADO SCHOOL OF MINES
WAVE, GOODBYE, TO WHERE WE HAVE BEEN Source: American Association of Petroleum Geologists.
SAY, HELLO, TO WHERE WE ARE GOING Source: J. Schieber, UT-Arlington.
Potential Gas Committee Determination of Future Supply of Natural Gas in the United States DOE Traditional Coal Future Cumulative Ultimate Reserves + Resources + Gas = Supply + Production = Resource 1990 169 855 147 1,172 777 1,949 1992 165 854 147 1,166 815 1,981 1994 164 881 147 1,192 853 2,045 1996 166 921 146 1,234 893 2,127 1998 164 896 141 1,202 933 2,134 2000 177 936 155 1,268 973 2,241 2002 187 958 169 1,314 1,013 2,327 2004 193 950 169 1,312 1,053 2,364 2006 211 1,155 166 1,532 1,091 2,623 2008 238 1,673 163 2,074 1,132 3,206
PGC Resource Assessments, 1990-2008 Total Potential Gas Resources (mean values) Data source: Potential Gas Committee (2009)
Shale Basins and the U.S. Pipeline Grid Source: American Clean Skies Foundation.
Shale gas and Alaska production offset declines in supply to meet consumption growth and lower import needs TCU 25 20 15 History Projections Alaska Shale gas Coalbed methane 10 Non-associated onshore 5 Non-associated offshore 0 Associated with oil Net imports 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 Richard Newell, SAIS, December 14, 2009 Source: Annual Energy Outlook 2010
U.S. Natural Gas Pipeline Infrastructure 2009
Additions to U.S. Natural Gas Pipeline Infrastructure (2007-2011) (Bcf/d) ($ Billions) Added Capacity Estimated Cost Miles 2007 14.9 4.3 1,663 2008 44.6 11.4 3,893 2009 (est.) 31.9 11.9 3,643 2010 (est.) 24.6 5.8 2,070 2011 (est.) 37.4 15.7 4,528 Source: Expansion of U.S. Natural Gas Pipeline Network: Additions in 2008 and projects through 2011, Energy Information Administration, September 2009.
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U.S. LNG IMPORT CAPACITY 2009 Everett, MA Cove Point, MD Elba Island, GA Lake Charles, LA Gulf Gateway, LA Northeast Gateway, MA Freeport, TX Sabine, LA Hackberry, LA Total 1.035 Bcfd 1.800 Bcfd 1.200 Bcfd 2.100 Bcfd 0.500 Bcfd 0.800 Bcfd 1.500 Bcfd 2.600 Bcfd 1.800 Bcfd 13.335 Bcfd Source: Federal Energy Regulatory Commission
Mar Jan 1 11 21 31 10 20 2 12 22 11 21 1-May-09 11 21 31 10 20 30 10 20 30 9 Aug Dec 19 29 8 18 28 8 18 28 7 17 27 7 17 27 Buff per day 10.0 Net U.S. Natural Gas Imports from Canada January 1- December 31, 2009 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Source: Benter Energy LLC, December 31, 2009. 23
Christopher B. McGill Managing Director, Policy Analysis cmcgill@aga.org