2016 State and Provincial Fact Sheet

The NWGA state and provincial fact sheets are updated and ready for 2016.  We find the the Fact Sheets extremely useful as we are out and about.  We typically leave them behind to highlight the natural gas industry within the Pacific Northwest region. We hope you will make use of them as much as we do. They are available on our website for downloading and printing at http://www.nwga.org/fact-sheets/.

2015 Outlook Spotlight: Clean and Efficient- Benefits of Direct Use of Natural Gas

We’re highlighting some of the guest posts featured in our 2015 Outlook here on the blog. The following excerpt discusses the opportunity to reduce emissions via the direct use of natural gas. To access the full Outlook study please click here.

For many years, energy agencies have alerted Americans to the importance of energy efficiency.  A variety of tags and certifications, backed by financial incentives, encourage us to understand our equipment buying options.  We know that it makes sense to spend a little more on a product so that we can save money and energy throughout its useful life.

These efforts continue to reduce per capita energy use for both natural gas and electric customers. And the more energy we save, the lower our impact on the environment.

But focusing on product efficiency only reveals half the story. To get the whole picture, it’s important to look at what’s called the full fuel cycle. That means understanding how much energy is retained — or lost — from the energy’s source until its final use in your water heater, oven or home heating system.

And with the full fuel cycle in mind, direct use of natural gas comes out a winner in the energy efficiency race.

For instance, by the time you turn on your electric appliance, up to 62 of the energy value from the original fuel has been lost. So the full fuel cycle efficiency is about 38 percent.  The full fuel cycle efficiency of a natural gas appliance is about 92 percent — a substantial difference.

Here’s how it works.

Even with advances in renewable power, most electricity in the U.S. is generated by either coal or natural gas.

  • We lose about 5 percent of the energy benefits of those fuels during the transportation process — before they arrive at the power plant.
  • The major energy loss occurs during generation.  Burning a fuel to create electricity wastes about 62 percent of its energy. That lost energy turns into heat, rather than useful power.
  • Finally, we lose another 6 percent of the energy over the electric transmission lines.

So for every 100 MMBtu of fuel that leaves the mine or the well, only 32 MMBtu reaches our appliances.  The rest is lost.

These fuel choices have important environmental implications.  On average, the house fueled by natural gas is responsible for about 37 percent fewer greenhouse gas emissions than a comparable all-electric home.  Furthermore, the more fuel we waste, the more we need to produce and transport — processes that also affect the environment.

We are approaching a future when a combination of wind, solar, wave energy and usable storage will reduce our reliance on fossil fuels. Until then, one of the most effective ways we have to save energy and reduce carbon emissions today is to use natural gas directly in our homes and businesses wherever gas is available.

Lower Gas Prices Mean Savings For Region’s Natural Gas Customers:

We’ve seen consistently affordable natural gas prices for a number of years now as unprecedented growth in the production of natural gas from shale has more than doubled available North American supply.

What does this mean for ratepayers in the Pacific Northwest? Lower bills!

Over the past year every NWGA member utility has adjusted rates downward as a reflection of continued falling prices. Whether it’s in Washington, Oregon, Idaho, or BC the average Pacific Northwest natural gas ratepayer could save hundreds of dollars a year.

Natural gas utilities use a mechanism called a Purchased Gas Adjustment (PGA) to pass the savings from lower prices on to ratepayers, here’s how the Washington Utilities & Transportation Commission defines a PGA:

 A PGA is a regulatory tool used by the Utilities and Transportation Commission (UTC) to adjust the price of natural gas to reflect the changing cost of gas in the wholesale market. The single largest cost of operating a gas company is purchasing gas to sell to customers.

 Companies buy gas from producers in Canada and the United States, and the price fluctuates over time. The PGA allows gas companies to periodically adjust their prices to reflect the increasing or decreasing cost of gas.

While the way natural gas rates are implemented can vary by state or province, here’s a video by FortisBC that identifies many of the key components that make up your natural gas bill:

Catch Up With Our September Webinar

We hosted the September edition of our monthly webinar series yesterday. Kevin Harris, Senior Production Cost Engineer for ColumbiaGrid, provided an overview of their recent study on coal retirements in our region. If you missed the presentation you can view a recording below, or download a .pdf version of Kevin’s PowerPoint by clicking here.

About the Presenter:

Kevin Harris has over 28 years of experiences of analyzing the wholesale power market. He has extensive background in modeling the US wholesale market (ISO/RTO): which includes generation fleet, load forecasting, commodity prices and transmission system. Before joining ColumbiaGrid, he spent 11 years at Reliant Energy (GenOn) a merchant generator in Houston, Texas.  During his tenure at GenOn, his work involved, project development, fuel budgeting, economic impact on merchant fleet due to changes in supply, transmission or market rules.

Since coming to ColumbiaGrid Kevin has been active in production cost modeling tasks at ColumbiaGrid and WECC.  Currently, he leads the Economic Planning Studies Team at ColumbiaGrid, is the chair of the Hydro modeling work groups at WECC, vice-chair of the Data Work Group, and represents ColumbiaGrid at the WECC Technical Advisory Subcommittee.

Kevin received his BS in Mechanical Engineering from California State University, Chico.

 

About ColumbiaGrid: 

ColumbiaGrid is a non-profit membership corporation formed in 2006 to improve the operational efficiency, reliability, and planned expansion of the Pacific Northwest transmission grid. The corporation itself does not own transmission, but its members and the parties to its agreements own and operate an extensive network of transmission facilities.

ColumbiaGrid has substantive responsibilities for transmission planning, reliability, and other development services. These tasks are defined and funded through a series of “Functional Agreements” with members and other participants. Development of these agreements is carried out in a public process with broad participation.

2015 Outlook Spotlight: Oil Price Volatility

We’re highlighting some of the guest posts featured in our 2015 Outlook here on the blog. The following excerpt discusses some of the factors driving oil price volatility this year and beyond. To access the full Outlook study please click here.

Oil Price Volatility

Currently, world oil supply is outpacing world demand for a number of reasons, many of which are well-known and include the significant U.S. production increases associated with hydraulic fracturing.

Oil supplies began to overtake demand sometime around Q1 of 2012 and have remained firmly above demand since late 2013, largely because of economic stagnation in Europe and economic slowing in China. Demand for oil is still increasing but not as fast as was once forecasted. In short, when demand does not keep up with growing supply, prices decline.

Supply has reached historic levels, in part, spurred by recent $100 oil prices and the use of hydraulic fracturing to tap oil resources that were previously uneconomical to recover. In the past, large oil producing countries would cut back on supplies to offset declines in demand, but the Organization of Petroleum Export Countries (OPEC) has been unwilling or unable to limit production by its members. Furthermore, much of the recent growth in supply is outside of OPEC’s control.

There are also a variety of geopolitical factors that some analysts believe are influencing the price of oil (e.g., some believe the Saudi’s are trying to drive smaller oil producing countries and U.S. shale producers with higher costs out of the market). This analysis will leave those matters aside except to agree that world events and concerns over the stability of some oil producing countries will always play a key role in the volatility of oil supplies and pricing.

Over the long-term, oil demand is likely to increase
as economic growth returns to more normal levels and economic activity picks up. As has been the case in recent years, the developing countries led by China and India will likely lead the way in driving oil demand. The developed countries, including the U.S., are not expected to experience much growth in overall levels of petroleum use.

Boom and bust in the oil industry is nothing new. In fact, since 2009, the oil markets have been fairly volatile. While it may not be possible to predict where prices will settle in the short-term, some analysts believe that the current levels could put a temporary halt on new production as producers find it difficult to justify going after new supplies with oil below $60 a barrel. There
is also the likelihood that today’s prices and reduced revenues will lead to consolidation in the oil industry, which could further drive down future production.

According to the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), oil markets may turn the corner sometime in late 2015, as that is when these agencies are predicting that oil demand and supply will cross back over.

Source: NGVAmerica, Oil Price Volatility, January 2015

What We’ve Been Reading This Month

Each month numerous natural gas related stories cross our desks, here are a few that piqued our interest:

  • In late July Colorado State University rolled out a study measuring methane emissions from the natural gas transportation and storage sector, part of a series being performed in partnership with the Environmental Defense Fund. The study found nationwide emissions from this sector to be 27% lower than EPA estimates. Don Santa, President of the Interstate Natural Gas Association of America, explains what that means for the industry going forward.

 

  • Dr. Michael Levi, a top energy thinker for the Council on Foreign Relations, authored an interesting long-read, “Fracking and the Climate Debate.” The article delves into the history of shale gas in the climate conversation: from partnerships between producers and the Sierra Club’s “Beyond Coal” campaign, to the role of natural gas in climate policy, and concluding with the potential for increased producer regulation.

 

Key Takeaways from the CSU Methane Emissions Study

Last week Colorado State University released the results of an in-depth study of methane emissions from natural gas transmission and storage facilities. The study is another in a series performed by academic institutions and the Environmental Defense Fund (EDF) seeking to gain a better idea of the scale of methane emissions from natural gas infrastructure.

Some of you may remember our discussion of the LDC edition of this study, performed by Washington State University researchers, on our May webinar.

Much like previous studies Colorado State’s research indicated that actual methane emissions from pipelines and storage facilities are far lower than EPA estimates, 27% lower on average across the nation. Why does this matter? Don Santa, President of the Interstate Natural Gas Association of America (INGAA) broke it down in a recent blog:

 “This finding is important. It underscores why the EPA needs to update the emissions factors it uses to estimate its inventory to reflect more accurately how the transmission and storage sector operates today.  EPA largely relies on data from a nearly 20-year-old study to calculate its greenhouse gas inventory. While EPA has appropriately updated emission factors and estimation methods in select cases for other industry sources, including wells in the exploration and production sector, it has not for transmission and storage sector sources.”

Click here to read Don Santa’s blog, where he breaks down some of the other key takeaways from the study.

Outlook Spotlight: Elements of Responsible Natural Gas Production

We’re highlighting some of the sidebars featured in our 2015 Outlook here on the blog. The following is a discussion on the elements of responsible natural gas production. To access the full Outlook study please click here.

The arrival of new and abundant natural gas supplies has changed the nation’s energy picture. It also has brought new attention to gas production methods. Fracking – an abbreviation for hydraulic fracturing – is now a common term in our country’s energy debate.

In fact, hydraulic fracturing isn’t new: oil and gas developers have been using it for more than 60 years. Hydraulic fracturing uses water, sand and small amounts of chemicals to break open solid rock, releasing trapped fuels. According to the U.S. Department of Energy (DOE), more than 2 million wells have been hydraulically fractured to date and about 95 percent of new wells drilled today are fractured.

So, why are we only hearing about it now?

In the last 10 years, engineers learned how to combine hydraulic fracturing with another time-tested construction practice: horizontal drilling. Conventional drilling uses fracturing along the length of a vertical well. Now it’s possible to send fracturing equipment horizontally along a shale deposit, releasing natural gas in larger volumes than ever before.

The combination of these technologies has helped the U.S. become the world’s largest natural gas producer.

As with any industrial process, gas producers experienced a learning curve in terms of environmental protection. But as the industry and regulators have learned more about these processes, drillers are continually improving their operations. Some areas of interest are:

Water use. Increasingly, gas producers are recycling the water they use to fracture rock. Some are starting with non-potable water, and the industry is studying ways to eliminate water entirely from the fracturing process.

Groundwater. Groundwater protection is one of the highest priorities of drilling engineers. Without proper well casings, drilling fluids and natural gas can leak into the groundwater. That’s why the American Petroleum Institute has established detailed standards for well casings, and state regulators closely inspect well construction. It’s important to note that hydraulic fracturing itself has not been associated with groundwater contamination.

Disposal. The industry and regulators have established practices to prevent spills from water emerging from wells and to protect municipal water treatment facilities.

Methane. The industry has been working hard to reduce methane emissions from gas production. A recent U.S. Environmental Protection Agency (EPA) study found that total methane emissions from gas production are 38 percent lower than they were in 2005 – although gas production grew by 26 percent during that time.

Earthquakes. Increased gas production has been associated with new earthquake activity. Scientists have determined that injection wells used to dispose of water from drilling sites have caused earthquakes in some locations. Most of these earthquakes are so mild they can’t be felt on the earth’s surface.

The technology exists to help well developers avoid earthquakes. Additionally, the industry already has backed new regulations in gas-producing states to reduce earthquake potential, and a new working group through the Interstate Oil & Gas Compact Commission and the Ground Water Protection Council is now focusing on this evolving issue.

The rapid growth of gas production has spurred regulators and academics to learn more about the environmental impact of gas development. NWGA looks forward to emerging information and continued cooperation between the natural gas industry and state and federal regulators.

Sources: FracFocus, Energy In Depth, U.S. Department of Energy

Released annually, the Gas Outlook provides a detailed 10-year overview of expected natural gas demand, supply availability, infrastructure development and prices in the Northwest. The Outlook represents a consensus view of the regional natural gas market developed by industry participants that directly serve natural gas consumers in Washington, Oregon, Idaho and British Columbia. 

To access the full 2015 Outlook study along with a recording of our recent webinar with NWGA Executive Director, Dan Kirschner, please click here.

Revisiting the Recent WSU/EDF Methane Emissions Study

The American Gas Association has a great infographic highlighting some of the key takeaways from the recently published study on methane emissions and local distribution companies (LDCs). We’re excited to see the results of a study performed in part by the Northwest’s own Washington State University getting so much traction.

Click on the image below to access the AGA methane emissions landing page or read on for more information on our May webinar with Dr. Brian Lamb of WSU, who headed up the research effort.

wsu_study_emissions_infographic_final

Source: American Gas Association, click on the image to be directed to the AGA methane emissions homepage with more information.

Click below to watch a recording of our May webinar with Dr. Brian Lamb of Washington State University for more information on the study’s methodology and findings:


You can access a copy of the study on LDC methane emissions, performed by the Environmental Defense Fund and Washington State University by clicking here.

About the Presenter:
Brian Lamb is a Regents Professor and the Boeing Distinguished Professor of Environmental Engineering in the Laboratory for Atmospheric Research and the Department of Civil and Environmental Engineering. He has been at Washington State University since 1979 where he has directed a wide range of atmospheric chemistry, pollutant transport, and air quality field programs. Dr. Lamb has a special interest in biosphere-atmosphere interactions and in regional air quality modeling, particular at the intersection of global change and atmospheric chemistry. Under his direction, WSU has completed several research projects focused on the impacts of global change on regional air quality. Dr. Lamb has also been involved in national field programs to measure methane emissions from natural gas systems and landfills, and he pioneered the use of tracer ratio methods for these measurements. Dr. Lamb received his Ph.D. in 1978 from the California Institute of Technology and his B.S. in Chemistry in 1973 from Idaho State University.

Where’s the Economy Heading? The 2015 Outlook Has Some Hints

We’re highlighting some of the guest posts featured in our 2015 Outlook here on the blog. The following is an economic outlook sidebar by Avista Corp. Chief Economist, Dr. Grant Forsyth. To access the full Outlook study please click here.

GDP growth in the U.S. and Canada over the last several years can be called many things, but nothing that can be printed in a family friendly economic outlook.

Looking across forecasters, 2015 is still predicted to be the high water mark for U.S. GDP growth, which is expected to be around 3%.  The sharp drop in oil and natural gas prices is expected to have a net negative impact on Canada’s GDP growth—in recent months average GDP forecasts for 2015 have fallen from around 2.5% to 2%.  Inflation forecasts for 2015 are averaging below the 2% central target of the Federal Reserve (the Fed) and the Bank of Canada (BOC).

After 2015, a majority of forecasters expect U.S. GDP growth to slowly decelerate, largely reflecting a reversal of the Fed’s low short-term interest policy.  At the time of this writing, futures contracts for the Federal Funds interest rate predict a policy change in the mid- to latter-half of 2015.  Given the expected timing of the Fed’s move, which is predicted to come before any BOC tightening, a growing number of forecasters (including U.S. futures markets as of April 2015) expect a continued depreciation of the loonie against the dollar in 2015.  Given an improving U.S. economy, this should boost Canada’s non-oil export growth.

In the Pacific Northwest (PNW), Idaho, Oregon, Washington, and British Columbia (B.C.) will largely follow the fortunes of the U.S. and Canadian economies in 2015.  On the U.S. side, although the majority of growth will occur in the Puget Sound, Portland, and Boise metro areas, employment growth is expected to pick-up in smaller MSAs.  In 2015, U.S. PNW employment growth will likely exceed U.S. growth, which forecasters expected to be in the low 2% range.  Similarly, Canadian forecasters see B.C.’s employment growth in same range as Canada’s growth, which is expected to be 1% or less.

The primary external risks to North American growth include slowing growth in China, recessionary growth in Japan, and near-recessionary growth in Europe.  Ongoing political instability in Greece, the Ukraine, and the Middle East also offer potential drags to growth.  Risks internal to North America include larger than expected declines in U.S. consumer and business spending caused by Fed interest rate increases and Canada’s historically high household debt levels.

Sources: Bank of Canada, Bank of Montreal, B.C. Stats, Bloomberg.com, CIBC, Canada Department of Finance, Canada Mortgage and Housing Corporation, Scotiabank, Statistics Canada, RBC, T.D. Economics, The Economist, U.S. Bureau of Labor Statistics, U.S. Federal Reserve. 

Released annually, the Gas Outlook provides a detailed 10-year overview of expected natural gas demand, supply availability, infrastructure development and prices in the Northwest. The Outlook represents a consensus view of the regional natural gas market developed by industry participants that directly serve natural gas consumers in Washington, Oregon, Idaho and British Columbia. 

To access the full 2015 Outlook study along with a recording of our recent webinar with NWGA Executive Director, Dan Kirschner, please click here.