northeast natural gas opportunity

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Northeast Natural Gas Opportunity

Speakers

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Marie Jordan, SVP

National Grid

Mike Beehler, VP

Burns & McDonnell

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Marie Jordan – SVP, National Grid

Northeast Natural Gas Opportunity

2015 Gas Pipeline Constraints

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New England is Facing a

Major Energy Challenge

Natural gas pipeline constraints are driving electric prices

higher

The competitive power market is not delivering a solution –

power grid reliability threatened on the coldest days

The natural gas supply problem will be compounded by the

retirement of more non-gas fueled power plants

2,500 MW will have retired through 2017

ISO-NE indicates another 5,900MW at risk of retirement

Consumers are switching from oil to natural gas for heating

Growing Demand for

Natural Gas Generation

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Proposed Generating Capacity Currently in the

ISO-NE Interconnection Queue (12,000 MW Total)

The Generation Mix in the

Region has changed

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Gas Availability in the Winter

Most of the year, natural gas is available

and relatively inexpensive

However, gas for electric generation is

severely constrained in the winter:

Pipeline capacity is primarily dedicated to

heating customers under “firm” contracts

This threatens reliability of the electric

system and drives up daily spot prices for

gas and electricity

Over the last 3 years, gas constraints cost

electricity customers an extra $7 billion

This will continue without new gas

pipeline infrastructure

Gas Prices

in New England

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High Prices for Gas = High

Prices for Electricity

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Electric Price Premiums for

Three Winters in a Row

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How Much More Expensive is

Electricity?

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Peak Demand far Exceeds

Capacity

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Projected Design Day Natural Gas Demand in New England & Regional Pipeline Capacity

Source: Black & Veatch

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Cheap Gas is Right Next Door

A Potential Solution: Electric

Distribution Companies

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There are two major proposed gas pipeline projects proposed designed to

improve transport capacity from the Marcellus region to New England.

Kinder Morgan’s Northeast

Energy Direct Project

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Source: http://www.kindermorgan.com/content/docs/NED_Power_Generation_Facts.pdf

Spectra’s Access

Northeast Project

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• Access Northeast proposes expanding

Spectra Energy's Algonquin and Maritimes &

Northeast systems, pipelines which already

connect to 60% of New England’s gas-fired

generation.

• Through an alliance with Iroquois Gas

Transmission, Access Northeast is connected

to more than 70% of the region’s gas

generation.

• The pipeline expansions will provide up to 0.9

billion cf/day

• In service as early as November 2018

• Expansions can occur on Spectra’s existing

footprint to minimize environmental impact

and stakeholder disruption.

Source: http://www.spectraenergy.com/Operations/New-Projects-and-Our-Process/New-Projects-in-US/Access-Northeast/

Greater Reliance on Imported

LNG is Not the Solution

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National Grid’s New England

Energy Strategy

New England’s economic and environmental well being depends on

affordable, cleaner sources of energy delivered safely and reliably.

National Grid believes a portfolio of energy resources including large-scale

renewables, increased natural gas capacity and enhanced demand

reduction and conservation programs is the key to securing New

England’s long-term energy future.

Action is needed now in order to allow adequate time to plan, site and

develop the infrastructure that is critically needed in order to stabilize

regional electricity prices, ensure continued reliable energy supply and

delivery and meet regional clean energy policy requirements.

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Aging Pipeline Infrastructure

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In 2011, following major natural gas pipeline

incidents, DOT/PHMSA issued a Call to Action to

accelerate the repair, rehabilitation, and

replacement of the highest-risk pipeline

infrastructure

Northeast Pipe Material

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Data Source - AGA 2014

2014 National Grid Main Inventory

Effective integrity

management can

counterbalance the

impacts of ageing and

pipe material

National Grid US alone

will replace more than

30% of our gas

distribution lines over

the next 20 years (11k

miles)

LPP Program Progress

383

303

369

314 322

398 426

461

492

521 546

-

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Leak Prone Pipe Replaced - National GridMiles replaced from 2010 to 2015 Projection

Pipeline Law 2015: The Year Of

Living Uncertainly

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• New regulations for pipeline construction , safety and

transportation were issued in 2015 and some due in

2016

• Operator Qualifications

• Excess Flow Valves

• Plastic Pipe

• Safety of Gas Transmission and Gathering Lines

• Rupture Detection and Valves

• National Pipeline Mapping System

• Clarity: The Pipeline Safety Act will be reauthorized

in 2016, updating the 2011 rules currently in place

A Bull Market in the Northeast

Growth is significant in the Northeast for all Local Distribution

and Pipeline companies

Gasification of the electric grid

Dash to Gas – oil to gas conversions

Infrastructure replacement

PHMSA 2015 regulations due in 2016

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Questions?

Have more question? Email us:

webcastquestions@energycentral.com

Additional Resource:

EnergyBiz Magazine, Winter 2016 edition, Page 40

Article: Natural Gas Opportunity in the Northeast

http://www.energybiz.com/magazine

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