northeast natural gas opportunity
TRANSCRIPT
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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:
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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