1. 2016 Northwest Gas Market Outlook
Northwest Gas Association
Dan Kirschner, Executive Director

2. NWGA Members: 1914 Willamette Falls Dr., #255 West Linn, OR 97068
(503)
NWGA Members:
Avista Corporation
Cascade Natural Gas Co.
FortisBC Energy
Intermountain Gas Co.
NW Natural
Puget Sound Energy
Spectra Energy Transmission
TransCanada GTN System
Williams NW Pipeline

3. …but everything is different
What is “The Outlook”?
A unique look at natural gas in our region.
Not much has changed…
Abundant supply
Low Prices
Modest demand growth
Sufficient Capacity
…but everything is different
Sustained low commodity prices
Slowing global economy
Uncertain policy environment

5. Total Available Resource

8. Sources of NW Gas Supply

9. Northwest Supply Prospects
Source: EIA 2015 AEO, 2016 Canada’s Energy Future

10. Supply Conclusions: Abundant resource; shale gas transformative
Production continues to exceed expectations
Adjacent/connected to two production areas
Variables:
Low oil prices
Environmental concerns/impact
Legislation/regulation
New/improved production techniques

11. Natural Gas Price
Source: EIA Annual Wellhead Price adjusted to $2015 using BLS CPI

12. Projected Natural Gas Spot Price
Source: EIA 2008/2015 AEO
NW Power Council 7th Power Plan Fuel Price Forecast

13. Projected Fuel Price Differentials
Source: EIA 2015 AEO

14. Prices Conclusions: Projections reflect continued production growth
Gas retains advantage in context of low oil prices
Forecasts have softened since advent of shale
Variables:
Economic growth
Pace of adoption gen, ind’l and trans adoption
Infrastructure constraints
New or improved production technologies
Regulatory/statutory impacts
Exports

15. Recent Gas Demand

16. Changing Load Composition

17. 2016 Outlook Forecast (0.8% CAGR)

18. Peak Day Forecast Comparison

19. Demand Conclusions: Modest organic growth Variables:
Magnitude and application of gas for generation
Potential large loads (industrial, exports)
Use as a transportation fuel
Adequacy of infrastructure
Policy/regulatory initiatives

20. Demand Scenarios
Explore impact of plausible potential loads not included in Outlook data set:
Coal retirement
120 MDth/day in three tranches (800 MW)
Heat rate = 7000Btu/kilowatt-hour
75% utilization rate
General Industrial
435 MDth/day in three tranches
Large Load Industrial (e.g. export, methanol)
1,000 MDth/day in four tranches

21. Combined Scenarios

22. Regional Facilities/Capacities
Pipelines
Spectra BCP
Williams NWP
TCPL - GTN
Other TCPL
FortisBC SCP
K-M Ruby
Underground Storage
Jackson Prairie
Mist
LNG Storage
Nampa
Newport
Plymouth
Portland
Tilbury
Mt. Hayes
Station 2
2060
Starr Road
165
Kingsgate
2796
Stanfield
693
Kemmerer
655
154
1196
520
120 60
305
158
495
AECO
Sumas
1306
Malin
Palouse
165
Gorge
551
110
2080
1500

23. Regional Storage Capacities

24. Regional Peak Supply/Demand

25. I-5 Peak Supply/Demand

26. Accelerated S/D Balance

27. Capacity Projects Pipelines Southern Crossing Expansion Palomar
Sunstone
Blue Bridge (N-MAX)
Ruby
Pacific Connector
Pacific Trail
Oregon LNG
Washington Expansion
LNG Terminals
Kitimat LNG
Bradwood Landing
Jordan Cove LNG
Storage Facilities
Mist
Jackson Prairie
Kitimat LNG
Bradwood Landing LNG
Oregon LNG
Jordan Cove LNG

28. Capacity Conclusions: Existing system sufficient for current demand
Recent cold weather reached upstream limits
Additional capacity likely needed to serve design day
Higher than expected gen/ind’l demand accelerates need
Type/timing/location of expansions will depend on new load profiles
Prospective large loads will require new capacity
Will provide for more consistent flows year around
Variables:
Timing/location/nature of required for generation loads
Whether prospective large loads materialize
Timeliness of project permitting/construction

29. Questions ? Northwest Gas Association (503) 344-6637 www.nwga.org