New England’sNatural Gas Market
New Hampshire Energy PlanningAdvisory Board
Stakeholder Forum
Tom Kiley, President & CEONortheast Gas Association
June 23, 2006Concord, NH
NGA Members
Non-profit trade associationLocal gas utilities (LDCs) serving New England, New York, and part of New JerseySeveral interstate pipeline companies LNG importer (Distrigas) and LNG trucking companiesOver 250 “associate member” companies, from industry suppliers and contractors to electric grid operatorswww.northeastgas.org
RIMA
CT
NJ
NY
VTNH
ME
Overview of national and regional gas systemsNational and regional projectionsSupply projects for regionEfficiencyRecommendations
Topics
Recommendations
New England needs to continue to diversify its sources of natural gas supplies.
New England needs to continue to increase its natural gas supply capacity and add new infrastructure – pipeline and LNG.
New England needs to continue to invest in natural gas efficiency programs.
The electric market needs to provide sufficient incentives to its gas-fired power generators to ensure supply security; gas is likely to remain a key part of future electric generation and the connection between contracts and infrastructure needs to be addressed. Generators need to step up and pay for pipeline delivery reliability!
National and RegionalSystems
Main Industry Sectors
Source: NGSA
AlbertaAlberta
Supply Systems forthe NortheastSupply Systems forthe Northeast
Map shows interstate pipelines serving Northeast U.S., as well as TransCanada system; not all lines shown
Western CanadaProductionArea
Gulf ProductionArea
LNG Imports
SableOffshore
Columbia (NiSource)DominionDuke EnergyEl PasoIroquoisNational FuelPNGTSTransCanadaWilliams
Mid-ContinentProductionArea
Expanded Gas Supply Routes into Region
Iroquois
Tennessee
Algonquin
Maritimes &Northeast
PNGTS
19911999
2000
DOMAC 2003
New England Gas Utility Companiesand Service Areas
NSTAR Gas
Bangor Gas CompanyBay State Gas CompanyBerkshire Gas CompanyBlackstone Gas CompanyHolyoke Gas & ElectricNorwich Public UtilitiesConnecticut Natural Gas Corp.KeySpanMaine Natural GasMiddleboro Gas & ElectricNew England Gas CompanyNew Hampshire Gas CompanyNorthern UtilitiesNSTAR GasSouthern Connecticut Gas Co. Unitil (Fitchburg Gas & Electric)Vermont Gas SystemsWakefield Municipal Gas & LightWestfield Gas & Electric LightYankee Gas Services Co.
New England Gas Market Snapshot:1980 to 2005
1980 2005
Gas Customers 1.7 million 2.4 millionAnnual Consumption (Billion cubic feet)
295 750
Interstate pipelines 2 5Pipeline capacity (Bcf/day)
1.5 3.6
LNG imports (Bcf/yr)
30 172
Gas as %, home heating fuels
24% 34%
Gas as %, electric power generation
<1% 40%
Sources: NGA, AGA, EIA, U.S. Census, ISO-NE
Projections
U.S. Natural Gas Production, Consumption, and Net Imports,1960-2030 (trillion cubic feet)
0
5
10
15
20
25
30
1960 1970 1980 1990 2000 2010 2020 2030
15%
21%Net ImportsConsumption
Production
Natural Gas Net Imports, 2004, 2025,and 2030 (trillion cubic feet)
2.8
0.6
2.3
1.2 1.2
4.4
6.4
4.1
0
1
2
3
4
5
6
7
Pipeline Liquefied Natural Gas
2004AEO2005AEO2006 - 2025AEO2006 - 2030
Source: US Annual Energy Outlook 2005 and 2006
History Projections
Major Sources of Incremental U.S. Natural Gas Supply,2004-2030 (trillion cubic feet)
16
18
20
22
24
26
28
2005 2010 2015 2020 2025 2030
Growth in Alaskan Production
Growth inNon-Associated Unconventional
Growth in LNG Imports
Base Production (all sources)
U.S. EIA, Annual Energy Outlook 2006
-1
0
1
2
3
4
5
1960 1970 1980 1990 2000 2010 2020 2030
Canada
Liquefied Natural Gas
Mexico
U.S. Net Imports of Natural Gas, 1960-2030 (trillion cubic feet)
U.S. EIA, Annual Energy Outlook 2006
History Projections
0
1
2
3
4
5
6
7
8
1970 1980 1990 2000 2010 2020 2030
HistoryAEO2005AEO2006
U.S. Natural Gas Wellhead Price, 1970-2030 (2004 dollars per thousand cubic feet)
U.S. EIA, Annual Energy Outlook 2005 and 2006
History Projections
0
10
20
30
40
50
60
1960 1970 1980 1990 2000 2010 2020 2030
U.S. Primary Energy Consumption by Fuel, 1960-2030(quadrillion Btu)
History Projections Petroleum
Natural Gas
Coal
Nuclear
Renewables
Source: U.S. EIA, Annual Energy Outlook 2006
Source: U.S. Energy Information Administration, “2006 Annual Energy Outlook,” 1/06
Projected Demand Growth by Sector, New England
Power generation remains the leading projected growth sector. Possible constraint: Will price volatility/supply concerns dampen market growth? Possible spur: If not gas in the next few years, what significant generating source will emerge?
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2005 2010 2015 2020 2025
Qua
drill
ion
Btu Residential
CommercialIndustrialElectric Gen.
A Changing Fuel Mix: New England’s Electric Generation, 1980-2005
Source: ISO New England
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Perc
enta
ge
Gas/Oil
Other
NaturalGasPurchases
Hydro
Oil
Nuclear
Coal
2005: Gas was 28% of mix, with Gas/Oil another 12%
ME
NHVT
MA
CT RI
Androscoggin Energy, Jay,
38 MWs Maine Independence,
Veazie, 470 MWs
Bucksport Energy, 33 MWs
Rumford Power,
266 MWs
Berkshire Power,
Agawam, 276 MWs
Tiverton, 500 MWs
Bridgeport, 465 MWs
Calpine, Dighton, 144 MWs
Millennium, Charlton, 331 MWs
Westbrook Power, 520
MWs
Wallingford Power, 250
MWs
Gas Power Plants Added toNew England Grid Since 1998
Hope Energy, Johnston, 500 MWs
AES Granite Ridge,
678 MWs
ANP Bellingham,
576 MWs
Lake Road, 810 MWs
West Springfield,
80 MWsExelon
Mystic 8 &9, 1600 MWs
Kendall Repowering,
172 MWs
Newington, 520 MWs
ANP, Blackstone,
570 MWs
Exelon, Weymouth,
800 MWs
Milford,272 MWs
Proposed Supply Projects
Proposed Terminals1. Rabaska, Levis-Beaumont, QU: 0.5 Bcf/d (Gaz Métro, Gaz de France,
Enbridge)2. Gros Cacouna Energy, QU: 0.5 Bcf/d (TransCanada, Petro-Canada)3. Canaport LNG, St. John, NB: 0.75 to 1 Bcf/d (Irving Oil, Repsol)4. Bear Head LNG, Point Tupper, NS: 0.75 to 1 Bcf/d (Anadarko)5. Maple LNG, Goldboro, NS: 1.0 to 2.0 Bcf/d (Keltic Petrochemicals,
4Gas, Suntera)6. Downeast LNG, Robbinston, ME: 0.5 Bcf/d (Kestrel Energy Partners)7. Quoddy LNG, Pleasant Point, ME: 0.5 Bcf/d (Quoddy Bay LLC)8. BP Consulting LNG, near Calais, ME: (BP Consulting LLC)9. Northeast Gateway Project, Off Cape Ann, MA: 0.4 Bcf/d (Excelerate
Energy)10. Neptune LNG, Off Cape Ann, MA: 0.4 Bcf/d (SUEZ Energy Resources)11. AES Battery Rock, Outer Brewster Island, Boston Harbor: (AES Corp.)12. Weaver’s Cove LNG, Fall River, MA: 0.4 to 0.8 Bcf/d (Hess LNG)13. KeySpan LNG, Providence, RI: 0.5 Bcf/d (KeySpan & BG LNG)14. Broadwater Energy, offshore Long Island, NY: 1 Bcf/d (TransCanada
and Shell US Gas & Power)15. Safe Harbor Energy, off south shore, Long Island, NY: 1 Bcf/d (Atlantic
Sea Island Group)16. Crown Landing LNG, Logan Township, NJ: 1.2 Bcf/d (BP)
3 57
2
9
1213
16
Existing & Proposed LNG Import Terminals, Northeast
NEWFOUNDLAND
QUEBEC
Map source: U.S. FERC; Updated by NGA based on public information as of 6-06. Locations approximate. Not all pipeline systems shown.
MARYLAND
Blue = In-service [Distrigas]Yellow = Approved by FERCOrange = Approved by Canadian regulatorsGreen = Proposed
4
1
14
10
68
11
15
QUEBEC
ONTARIO
Prepared by NGA, 6-06, based on publicly available information. Project locations approximate.
Proposed Northeast Pipeline Projects
Williams, “Sentinel Expansion Project”
M&NE, “Phase IV
Expansion”
Duke/KeySpan, “Islander East”
Tennessee, “Atlantic Supply Expansion”
Columbia, DTE Energy,
KeySpan, “Millennium”
National Fuel Gas, “Empire
Connector Project”
Tennessee, “Northeast ConneXion
NE”
Tennessee, “Northeast ConneXion
NY/NJ”
PNGTS, “Recent Open
Season”
Iroquois, “MarketAccess
Expansion”
Tennessee, “Essex –Middlesex Project”
VERMONT
Williams, “Leidy toLong Island”
Algonquin, “Ramapo Expansion”
Iroquois, “Brookhaven
Lateral”
Duke/Algonquin, “Cape Cod Lateral”
Efficiency
NPC: “Continued Energy Efficiencyis Critical: Innovation, Technology, Markets”
2003 2010 2020 202520150
5
10
15
20
25
30
35TCF
U.S. Demand Outlook, Reactive Path
Projected Demand without Efficiency Gains
5-6 TCF
• Efficiency gains key to NPC outlooks
– industrial boiler and process technology
– power generation technology, including cogeneration
– demand response in power markets
– commercial/residential demand responses
• Public policy can facilitate greater efficiency gains
Source: National Petroleum Council
GasNetworks® is a nationally-recognized and award-winning collaborative consisting of local natural gas companies serving residential and commercial & industrial customers throughout New England. It has been promoting energy efficiency and the use of high efficiency natural gas technologies since 1997. Through its contractor training and education programs, GasNetworks has provided expert training to over 4,000 contractors and publishes GasNetworks News®, a quarterly newsletter distributed to over 20,000 subscribers.
Current Members:Bay State GasBerkshire GasKeySpan Energy Delivery (New England)New England Gas (MA)Northern Utilities (NH and ME)NSTAR GasUnitil (MA)
Example:GasNetworks®
Concluding Points
Natural gas demand continues to grow…– But are all market participants stepping forward to support system
growth and infrastructure investment?– Infrastructure requires long-term commitments, but power
generators face short-term financial pressures– Who pays for reliability?
Natural gas infrastructure projects are timed to meet market need…– But will siting issues continue delays that add to consumer cost and
impact system reliability?
A balanced portfolio remains the best policy…– Fuel diversity, yes, but also supply source diversity– New England’s done well in diversifying its gas sources, and 2005
Gulf hurricanes remind us of need for greater diversity of infrastructure system locations – closer to market centers
– Efficiency needs to play an increasing role
Recommendations
New England needs to continue to diversify its sources of natural gas supplies.
New England needs to continue to increase its natural gas supply capacity and add new infrastructure – pipeline and LNG.
New England needs to continue to invest in natural gas efficiency programs.
The electric market needs to provide sufficient incentives to its gas-fired power generators to ensure supply security; gas is likely to remain a key part of future electric generation and the connection between contracts and infrastructure needs to be addressed. Generators need to step up and pay for pipeline delivery reliability!