Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
Natural Gas Market Conditions in New England
Presentation to:
New Hampshire Business & Industry AssociationAnnual Energy Seminar
Stephen LeahyNortheast Gas Association
December 11, 2013Manchester, NH
About NGA
Non-profit trade association
Local gas utilities (LDCs) serving New England, New York, and New Jersey
Several interstate pipeline companies
LNG importers (Distrigas, Repsol) and LNG trucking companies
Over 200 “associate member” companies, from industry suppliers and contractors to electric grid operators
www.northeastgas.org
Changing Northeast (and New England) Supply Dynamic
Traditionally, “end of the pipeline”; long-haul transportation from Gulf Coast, western Canada
Changes: Marcellus Shale volumes increasing, displacing
Gulf and other long-haul supplies Lower imports from Canada and LNG Exports from the Northeast U.S. to Canada Off-system “virtual pipeline” developments Higher pipeline utilization and more frequent
“capacity constraints” at “western points”
Source: U.S. EIA, 10-3-13
U.S. Production Levels Remain Robust
Source: Potential Gas Committee, 4-9-13
• 100 years of potential supply• EIA: U.S. in 2013 is largest producer of
natural gas in the world• U.S. monthly production in lower 48-
states hit new record in mid-2013
Home Heating Expenditures
0
500
1,000
1,500
2,000
2,500
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14Source: U.S. EIA, Oct. 8, 2013. Natural gas data is for Northeast states of CT, ME, MA, NH, NJ, NY,
PA, RI, VT. Heating oil is U.S. average.
Average Consumer Expenditures for Heating Fuels, $, 2007-2013
Natural Gas
Heating Oil
(Forecast)
Imports from LNG and Canada are Lowering
Source: Distrigas, 12-3-12
*Brunswick Pipeline Flows
LNG IMPORTS, 2009-12
0
10000000
20000000
30000000
40000000
200420052006200720082009201020112012
103m
3
Source: National Energy Board of Canada
Canadian Natural Gas Exportsto Eastern U.S., 2004‐12
Copyright: Northeast Gas AssociationPrepared by: Coler & Colantonio, Inc.February 2012
M&NEPNGTS
Iroquois
Tennessee
Algonquin
5 InterstatePipelinesServe New England
Growing Regional Interest in System Expansion CT Comprehensive Energy Strategy enacted, utility
expansion plans just approved by regulatory agency
Maine Natural Gas Task Force and June 2013 legislation
MA Department of Energy is conducting study on natural gas expansion
New York City is phasing out #4 and #6 oil in buildings over coming years –natural gas as key alternative option
NYS DPS looking at existing natural gas franchise expansion policy statewide
VT Gas expansion project.
Projects In-Service This Year (all outside New England)
Tennessee’s “Northeast Upgrade”: 636 MMcf/d Tennessee’s “MPP Project”: 240 MMcf/d Millennium’s “Minisink Compressor”: 150 MMcf/d National Fuel Gas’s “Line N”: 30 MMcf/d Transco’s “Northeast Supply Link”: 250 MMcf/d Spectra’s “NJ-NY Expansion”: 800 MMcf/d
Photos courtesy of Spectra Energy.
Prepared by NGA, based on publicly available information. Project locations approximate. As of 11-13.
VERMONT
Spectra/Texas Eastern, “TEAM 2014”
Proposed Pipeline Projects
Empire, “Tioga
County II”
Tennessee, “Rose Lake”
Millennium, “Hancock
Compression Project”
Spectra, “AIM”
National Fuel / Empire,
“Tuscarora Lateral”
Williams, “Rockaway
Lateral/Northeast Connector”Williams &
Cabot, “Constitution
Pipeline”
Tennessee, “NortheastExpansion”
Iroquois, “Wright
Interconnect”
Iroquois, “Eastern Long
Island”
Millennium, North -South Upstate Connector Project”
Columbia, “East Side Expansion
Project”
PNGTS, “C2C”
Spectra, “Expansion to
Maritimes”
Tennessee, “ConnecticutExpansion”
Iroquois, “SoNo
Project”
This Winter?
In October, staff of the Federal Energy Regulatory Commission (FERC) released the “Winter 2013-14 Energy Market Assessment.” Among its observations: “Natural gas and power futures prices for the winter are comparable to last year, except in New England.”
“Natural gas storage is more than adequate for a normal winter, and gas production continues to grow, particularly in the Northeast. We anticipate localized price spikes in New England during periods of high demand, due to ongoing constraints.”
Gas utility customers are basically protected from spot market price fluctuations as utilities have in place long-term supply and storage arrangements.
Securing Pipeline Capacity
The pipelines operate as they are designed on peak days– Facilities are designed to support primary firm obligations
Most generators in region do not have firm contracts back to a liquid supply point– On peak days, only firm services will be assured flow– Absent firm commitments, generators may not have gas supplies to meet electric generation needs
Generators indicate that the regional electric market does not provide incentives for them to enter into firm contract arrangements, or to utilize alternate fuel back-up
Infrastructure counts…– Pipeline investments would ease regional gas constraint points and lower
prices… pending customer commitments