1. Is New England Over-Reliant On Natural Gas?
May 21, 2013
Groton, CT
Is New England Over-Reliant
On Natural Gas?
Presentation to:
Northeast Energy & Commerce
Association Annual Energy Conference
Thomas M. Kiley
Northeast Gas Association

2. NO
…but let me elaborate further.

3. Continued on NGA web site…

4. Extensive Resource Base
Strong Production,
Extensive Resource Base
Source: U.S. EIA,
Source: Potential Gas Committee,

5. BENTEK: Northeast Production Continues Growth
Chart: BENTEK Energy. Presented at NGA Market Forum, April 30, 2013.

6. Shale Gas Basins, U.S. and Canada
Map: International Energy Agency (IEA)
25.

7. Henry Hub Average Monthly Price, 2002-2012
Lower Commodity Price
Henry Hub Average Monthly Price,
Source:
FERC
Source: U.S. EIA

8. Projected Commodity Price
Source:
FERC
Source: U.S. EIA, “2013 Annual Energy Outlook”

9. Lower Air Emissions
Source:
U.S. EIA

10. Continued Investments in Gas Efficiency
Source: Consortium for Energy Efficiency

11. Over-Reliant in What Sector?
Potential growth sectors…
Home Heating
Transportation
Power Gen
37% of New England homes heat with gas
With price difference from oil, everyone wants gas
Alternative fuels are a fraction of the regional transport market
CNG and LNG offer price (and emissions) savings, esp. for heavy-duty fleets
Gas remains leading
choice along with
Renewables.
If not gas, what?

12. What Decade is This Anyway?

13. New England Annual Gas Consumption by Sector
Billion cubic feet
Source: U.S. Energy Information Administration

14. Gas Power Plants in Region: Firm vs. Non-Firm
Source:
Repsol

15. 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 will 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

16. Constraint Points
Source: U.S. EIA,

17. Percent Days Restricted (Nov – Mar)
TGP: Restrictions of Various Interruptible Services: Winter Period Northeast
Locations
Percent Days Restricted (Nov – Mar)
Description
2009/2010
2010/2011
2011/2012
Comp. Station #245
W. Winfield NY flowing all points east
41.72%
96.03%
99.34%
Comp. Station #315
Wellsboro, PA flowing west, south
0.00%
25.17%
90.79%
Comp. Station #321
Eastern PA flowing east
37.75%
47.68%
9.21% *
Comp. Station #325
NW NJ east to NJ,NYC, SW CT
86.75%
6.58% *
* TGP footnote: Dramatic reduction in restrictions post 300 Line Expansion placed in service Nov. 2011
Source: Tennessee Gas Pipeline/Kinder Morgan

18. 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, 12-12

19. Where Do We Go From Here?
The power market in New England is over-reliant on non-firm gas transportation.
Other questions that seem directly relevant:
Where would the power market in New England be, today, and for next decade and more, without natural gas as the major fuel input?
Is it not long past time to re-evaluate the power market design in New England and implement real changes, to ensure reliability, and to access more fully the opportunities presented by natural gas to the region?