1. Exploring Pipeline Dynamics to Connect New Markets
Damien Gaul
Industry Economist
Office of Oil and Gas
Energy Information Administration
2nd North America Pipelines Conference
Calgary, Alberta
February 19, 2009
Energy Information Administration
Official Energy Statistics from the U.S. Government 1

2. Agenda I. A Look at Supply Development –
Unconventional Supplies Increase
Gas Shales in the United States
Changes in Production
II. Pipeline Developments
How the Regions are Connected
Additions to Capacity and Mileage
III. Future Construction Requirements –
Major Announced Pipeline Expansions
Rocky Mountain Developments
Northeast Developments
IV. Concluding Remarks
Agenda

3. The Natural Gas Industry is Constantly Evolving…..
“A lot of the business is now focused on the physical transportation and trading of gas….People haven’t talked about that in a long time. People had been focused on financial markets, hedging, derivatives. What’s happening now is that people are clearly focused on moving physical molecules from one place to another, about pipeline capacity utilization and basis differentials. It’s classic stuff.”
-- Rusty Braziel, vice president, Bentek Energy, quoted in Gas Daily (September 16, 2008)

4. Regional Natural Gas Consumption (trillion cubic feet)
3.5
3.6
3.8
2.5
2.3
2.7
3.0
2.8
2.9
1.3
1.5
1.6
1.5
2.0
0.8
2.4
2.3
5.0
4.9
1.2
1.4
2007
2015
2030
Source: Energy Information Administration, Annual Energy Outlook 2009

5. U.S. Natural Gas Consumption by Sector, 1990-2030 (trillion cubic feet)
History
Projections
Industrial*
Electric Generators
Residential
Commercial
Transportation**
* Includes lease and plant fuel
** Includes pipeline fuel
Source: Energy Information Administration, Annual Energy Outlook 2009

6. Natural Gas Supply by source, 1990-2030 (trillion cubic feet)
History
Projection
Unconventional
Alaska
Net imports
Non-associated offshore
Associated-dissolved
Non-associated conventional
Source: Energy Information Administration, Annual Energy Outlook 2009

7. Gas Shales in the United States
Shale Gas Play
Basins
Marcellus Shale
Source: Energy Information Administration, Office of Oil and Gas

8. Cumulative Unconventional Production, 2007-2030 (trillion cubic feet)84
West Coast 36 19 14 11 13 3 3 3
Mid-continent
Northeast
Rocky
Mountain 32 6 43
Gulf Coast
Southwest
Gas Shales
Tight Gas 5 3
Coalbed Methane
Source: Energy Information Administration, Annual Energy Outlook 2009

9. Rockies Express Pipeline (REX)
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

10. Natural Gas Pipeline Capacity Between Regions, 2008 (million cubic feet per day)
Western
Central
2,643
11,980
4,451 81
3,594
Midwest
Northeast
3,016
4,018
3,755 51
4,799
1,495
1,028
268
2,100
4,897
569
897
298
8,898
5,998
5,875
9,267
23,515
614
1,090
Southwest
405
2,491
Southeast
865
Note: Aspect and size relationships among regions are not to scale.
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database, as of January 2009.

11. Additions to Pipeline Mileage, 1998-2011
Actual
Potential
Miles
Note: Only projects under construction or approved that were judged to have the most likelihood
of being completed in 2009 were included in 2009.
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System,
Natural Gas Pipeline Projects Database, as of January 2009.

12. Natural Gas Pipeline Capacity Additions, 1998-2011
Actual
Potential
Million Cubic Feet per Day
Note: Only projects under construction or approved that were judged to have the most likelihood of being
completed in 2009 were included in 2009.
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System,
Natural Gas Pipeline Projects Database, as of January 2009.

13. Major Potential Natural Gas Pipeline Expansions, 2009-2011
2,400 MMcf/d– Wyoming to Oregon
(2 New Pipelines – 2011)
2,300 MMcf/d– Wyoming to Iowa
(2 New Pipelines Pipeline – )
750 MMcf/d import expansions
(2 Projects – 2010)
1,200 MMcf/d– Wyoming to North Dakota
(2 New Pipelines – )
1,800 MMcf/d– Missouri to Ohio
(KM Rockies Express – 2009)
225 MMcf/d capacity expansion to/from Canada (Vector Pipeline )
700 MMcf/d LNG imports
(1 Import Pipeline – 2011)
4,700 MMcf/d expansions
and new pipelines
(7 Projects )
1,900 MMcf/d Expansions
5 Projects – 2010)
1,400 MMcf/d Local Expansions
(6 Projects – )
1,632 MMcf/d LNG imports
(2 Import Pipelines – )
3,740 MMcf/d from Oklahoma,
Arkansas & Texas to Louisiana
( 5 Projects )
3,690 MMcf/d LNG Import Pipelines
(7 projects – )
8,740 MMcf/d from
Southwest to Southeast
(12 Projects )
1,000 MMcf/d Export Pipelines
(2 projects – 2010)
MMcf/d = million cubic feet per day. LNG = liquefied natural gas.
Source: Energy Information Administration, GasTran Gas Transportation Information System, Natural Gas Pipeline Projects Database.

14. Rocky Mountain Interstate Pipelines
Wyoming Interstate
Pathfinder (1.2 Bcf )
Northwest Pipeline
Ruby Pipeline (1.5 Bcf)
Chicago Express (1.5 Bcf)
Rockies Alliance (1.2 Bcf)
Rockies Express
Questar
Colorado Interstate
Kern River Gas Transmission
TransColorado Gas
Northwest Pipeline
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

15. Rocky Mountain Prices and Basis
REX-West
Cheyenne Plains
HurricaneKatrina
Recession
Kern River Expansion
Source: Natural Gas Intelligence, NGI’s Daily Gas Price Index.

16. Northeast Interstate Pipelines
NFG West to East (0.7 Bcf)
National Fuel (NFG)
Tennessee Gas (TGP)
TGP 300 (0.3 Bcf)
Transcontinental (Transco)
Dominion (DTI)
DTI Keystone (1.0 Bcf)
REX (1.8 Bcf)
Columbia Gas (TCO)
Texas Eastern (TETCO)
TETCO TEAM (0.3) Bcf)
Texas Eastern (TETCO)
Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

17. Northeast Prices and Basis
Source: Natural Gas Intelligence, NGI’s Daily Gas Price Index.

18. I. Shale and other unconventional resource development will drive pipeline expansions for the foreseeable future
II. As a result, the pipeline “Renaissance” will continue, although the peak in actual completions might have been reached in 2008
III. Not all pipelines proposals will lead to actual infrastructure –the current economic downturn will have an impact on production and pipeline. Also, many LNG projects are expected to be cancelled in the future.
IV. In the Northeast, expansions of existing pipelines will likely address transportation requirements; however, another large infrastructure project may be needed in the Rockies.
Concluding Remarks

19. GasTran - related Publications:
Distribution of Natural Gas: The Final Step in the Transmission Process (Released, 6/27/2008, pdf format)
This special report analyzes the role of local distribution companies (LDCs) and transmission pipelines in delivering natural gas supplies to end-use customers, focusing upon the years 1996 through 2006.
Natural Gas Compressor Stations On the Interstate Pipeline Network: Developments Since 1996 (Released, 11/02/2007, pdf format)
This report examines the compression facilities added over the past 10 years and how the expansions have supported pipeline capacity growth intended to meet the increasing demand for natural gas.
About U.S. Natural Gas Pipelines (Released, 6/1/2007, html format)
This information product provides the reader with a broad and non-technical overview of how the U.S. natural gas pipeline network operates, along with some insights into the many individual pipeline systems that make up the network.