Regional Gas Market Outlook:Growth vs. Constraints
Maine Natural Gas Seminar -“Natural Gas: Where Do We Go From Here?”
Tom KileyNortheast Gas Association
October 6, 2016Falmouth, ME
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Continued on NGA web site…
http://www.northeastgas.org/about-nga/antitrust-guidelines 2.
About NGA
Non-profit trade association
Local gas utilities (LDCs) serving New England, New York, New Jersey, Pennsylvania
Several interstate pipeline companies
LNG importers (Distrigas, Repsol) and LNG trucking companies
Over 250 “associate member” companies, from industry suppliers and contractors to electric grid operators
www.northeastgas.org 3.
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Two Trends…
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Growth Constraints
• Extensive U.S. resource base
• System expansion potential
• Continuing power generation demand
• Siting, and environmental opposition
• Power market conundrum
Context for Growth
6.
Sour
ce:
U.S
. EIA
, 7-1
4
Strong, “Nearby” Production
7.
U.S. natural gas production in 2015 set new all-time record: 79 Bcf/d.
Marcellus Shale producing ~18 Bcf/d.
PA is now 2nd largest gas producing state in U.S.7.
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Gas Projected to be a Leading Fuel in Coming Decades in U.S.
Source: U.S. EIA, “2016 Annual Energy Outlook,” 5-16
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Gas Customer Base in Region Continues to Grow
Natural Gas = +840,000 Heating Oil = -1.4 Million
Continued Growth in Regional Design Day, and New Peaks
• New England’s gas utilities set a new collective peak in Feb. 2015, and set 2 new peaks on 2 consecutive days in Feb. 2016.
• Gas LDC design day for this recent winter was 4.5 Bcf, reflecting system growth
• 2013/14 winter design day collectively was 4 Bcf
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Projected Power Sector Additions by Fuel Type
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Natural Gas, 53
Other, 7
Wind, 40
GENERATOR PROPOSALS IN THEISO NEW ENGLAND QUEUE
Percentage, Sept. 2016
0
1,000
2,000
3,000
4,000
5,000
6,000
Natural Gas Dual Fuel Wind Other
NEW YORK ISO SYSTEM, 2016Proposed Power Projects by Fuel Type
Megawatts
PJM, 2015Queued Capacity by Fuel Type,Percentage
Gas = approx. 65%
Key reason: natural gas replacing coal in U.S. electric power plants.
12.
Carbon Emissions are Down in U.S. Energy Systems
Source: U.S. EIA, 5-16
Northeast States Lead U.S. in Gas Efficiency Investments
9 Northeast states = $544 million investment in 2015
Equal to 39% of U.S. total of $1.4 billion
Source: ACEEE, “2016 State Energy Efficiency Scorecard”, released Sept. 201613.
Gas LDCs are committing to infrastructure investments
Gas utilities in the Northeast are investing in proposed pipeline projects – to meet gas utility demand. State regulatory and legislative support exists for gas system expansion in several states.
But supply access, and infrastructure development, still needed in region.
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Constraints
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Changing Differential,Gas vs. Oil
16.Source: Federal Reserve Bank of Dallas, July 2016
Growing Opposition to Gas Infrastructure
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Meanwhile… Projects are Advancing… Elsewhere
Source: U.S. EIA, 2-16 18.
Two Views
Strong market potential:– Robust, secure gas resource base– Growth potential & customer interest from homeowners,
businesses, power sector– Improving environmental performance
Headwinds:– Gas still has good price position with oil, but narrower than in
recent years – Siting, and increasing opposition to infrastructure– Market and regulatory uncertainty
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View from Here: New England’s Projected Future Energy Mix
20.
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
1.60020
1420
1520
1620
1720
1820
1920
2020
2120
2220
2320
2420
2520
2620
2720
2820
2920
3020
3120
3220
3320
3420
3520
3620
3720
3820
3920
40
Qua
drill
ion
Btu Natural Gas
Petroleum
Coal
Nuclear
Renewables
Projected Growth in Consumption by Fuel Type, New England, 2014- 2040
Source: U.S. EIA, “2016 Annual Energy Outlook,” 5-16
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For Further Information
Tom KileyPresident & CEO
Northeast Gas AssociationTel. 781-455-6800, x. [email protected]