1914 Willamette Falls Dr., #255 West Linn, OR 97068 (503) 344-6637 www.nwga.org NWGA Members: Avista Corporation Cascade Natural Gas Co. FortisBC Energy Intermountain Gas Co. NW Natural Puget Sound Energy Spectra Energy Transmission TransCanada GTN System Williams NW Pipeline
Total Available Resource 3,000 Traditional Coalbed Shale 2,500 2,515 Trillion Cubic Feet 2,000 1,500 1,000 1,003 147 147 147 Shale resource not assessed separately 146 141 1,119 ~200 155 169 169 166 616 687 163 159 1,073 158 1,253 158 500 856 854 881 921 897 936 958 950 955 1,057 1,052 1,153 1,104 0
Gas Price vs. Gas Supply $25.00 North America Gas Supply Cost Curve $20.00 $15.00 $10.00 $5.00 $0.00 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 Breakeven Gas Price US$/MMBtu Tcf of Gas Available Source: MIT Study on the Future of Natural Gas, Figure 2.10 upgraded for recent Montney and Utica additions.
How Much Is 900 Tcf? Cumulative Gas Consumption, Tcf 1800 1600 1400 1200 1000 800 600 400 200 0 2012 2014 North America Supply and Demand 2016 With LNG Exports* Canada Cumulative Consumption US Cumulative Consumption Supply Available at $5.00 or less Supply Available at $4.00 or less 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 * LNG exports assumes first exports of 6 Bcf/day in 2015, increasing to 20 Bcf/d in 2022, then flat Source: U.S. Energy Information Administration website and Canadian National Energy Board 2011 Forecast
Learning Curve 25.0000 Actual 10 AEO 12 AEO 14 AEO 11 AEO 13 AEO 15 AEO 20.0000 15.0000 Tcf/year 10.0000 5.0000 0.0000 Source: EIA Annual Energy Outlook
Historic Gas Spot Prices $16 Natural Gas (Henry Hub Spot) $14 $12 Dollars/Dth $10 $8 $6 $4 $2 $0 Source: EIA Monthly Spot Prices through May, 2015
NatGas Price Forecast $2013/Dth 2015 AEO HH 2008 AEO HH NPCC AECO NPCC SUMAS $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- Source: EIA 2008/2015 AEO NW Power Council 6 th Power Plan Fuel Price Forecast
Recent Gas Demand 1,000 PNW Gas Deliveries (source: US EIA, StatCan) Residential Commercial Industrial Generation 900 800 700 Million Dth 600 500 400 300 200 100 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* * 2015 Outlook Year 1 Forecast
Changing Loads 1996 Gen 3% 2014 Res 26% Gen 20% Res 26% Ind 51% Comm 20% Ind 32% Comm 19%
2015 Outlook Forecast 300 Residential Commercial Industrial Generation 250 Million Dth 200 150 100 50 0 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24
It s Economic $160.00 $140.00 $120.00 2013$/MWh $100.00 $80.00 $60.00 $40.00 $20.00 $- Source: EIA, Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2015 - June 3, 2015,
Supports Renewable Energy 8,000 June 1-7, 2015 (Mon-Sun) 7,000 6,000 Megawatts 5,000 Load Wind 4,000 3,000 2,000 1,000 0 06/01/15 00:00 Source: BPA 06/02/15 00:00 06/03/15 00:00 06/04/15 00:00 06/05/15 00:00 06/06/15 00:00 06/07/15 00:00 06/08/15 00:00
Replace Existing Resources
Columbia Grid Study Impact on Northwest transmission system: Announced Coal retirement in the NW (Boardman and Centralia) Include sensitivity of additional coal retirement in the Northwest Colstrip 1& 2 Focus on impact to the Northwest transmission system Assumes gas is available where/when needed Conclusion Location of replacement capacity results in shift of NW flow but flows remained within or on the edge of historic operation range, 2010-14 Dispatchable NW Gas replaces: 73% of Boardman/Centralia; 93% of Colstrip 1&2
2013-14 Fundamentals Significant Cold Heating Degrees 50 45 40 35 30 25 20 15 10 5 Prolonged Cold 0 $/Dth Feb 6 Peak Prices $30 Sumas - $27 Stanfield - $24 $25 $20 Kingsgate - $15 $15 Normal HDD Portland HDD $10 Sumas Price $5 Kingsgate Price Stanfield Price $0 Capacity limits on Westcoast coincides with price spikes 2,000 Westcoast Flows - Mcfd 1,500 Mainline Flow 1,000 Mainline Capacity 500 Sumas Flow Sumas Capacity 0 9
Accelerated S/D Balance Expected Large Industrial Peak LNG 9 8 Million Dth/day 7 6 5 4 3 2 1 0 Coal Replacement Pipeline General Industrial Underground Storage
Capacity Projects Pipelines Southern Crossing Expansion Palomar Sunstone Blue Bridge (N-MAX) Ruby Pacific Connector Pacific Trail Oregon LNG Washington Expansion LNG Terminals Kitimat LNG Bradwood Landing Oregon LNG Jordan Cove LNG Storage Facilities Mist Jackson Prairie Kitimat LNG Oregon LNG Jordan Cove LNG Bradwood Landing LNG
NatGas and Clean Power Act How big an impact might 111(d) have on Northwest natural gas markets? Any good economist will say that depends. [W]hen the final rule is issued, 111(d) will require states to develop individual or joint implementation plans. THAT is where the gas will hit the pilot light and we ll understand real implications. 2015 NWGA Outlook (Phillip Popoff)
Questions? Dan Kirschner Northwest Gas Association (503) 344-6637 www.nwga.org dkirschner@nwga.org