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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.

Key Takeaways From The WSU Emissions Study

Important news in the natural gas utility world last week with the release of a study published in the journal, Environmental Science and Technology, detailing a dramatic decrease in methane emissions from US local distribution systems when compared to prior estimates.

The study was led by the Northwest’s own Washington State University, with the support of the Environmental Defense Fund (EDF), Conestoga-Rovers and Associates, an engineering and environmental consulting firm, and major natural gas utilities from across the US.

Check out the video below for a review of study’s justification and methodology:

Three key takeaways from the study (you can access the entire study by clicking here):

“The researchers found that upgrades in metering and regulating stations, changes in pipeline materials, better instruments for detecting pipeline leaks as well as regulatory changes have led to methane emissions that are from 36% to 70% lower than current Environmental Protection Agency estimates when the data gathered for this study is combined with current pipeline miles and the numbers of facilities.”

  • When returning to sites identified as large methane emitters in a study performed by the Gas Research Institute (GRI) in 1992, the researchers found significant emissions reductions in facilities that had been upgraded or replaced with newer equipment:

“To understand the large reductions found in this work relative to the GRI/EPA results, we identified nine facilities from among the larger emitting sites measured during the GRI/ EPA 1992 program to resample with our high-flow and tracer- ratio techniques. These results show substantial reductions in emissions from each individual station (factors of 2 to 50) from 1992 to the present, with one exception. In two cases, the local operator indicated that significant equipment changes had occurred at the site; while at a third site, the local operator indicated that there had been no equipment upgrades at the site in the past 20 years. This particular site was the only site without a significant reduction in emissions.”

  • While emissions nationwide were lower than prior estimates, utilities located in the Western US were responsible for emissions rates even lower than the national average:

“We also examined how emissions from pipeline leaks varied on a regional basis in the U.S. due to differences in pipeline type and miles by region (see SI Section S4.3; there was no statistical difference in EFs by region). The eastern region accounts for 34% of the total U.S. CH4 from pipeline leaks, while the western region contributes less than 20% (Figure 1). In the eastern region, emissions are dominated by leaks from cast iron and unprotected steel characteristic of older systems. As such, leaks from cast iron and unprotected steel pipe account for 70% of the eastern emissions and almost half of total U.S. emissions. In the western region, systems are newer with more miles of plastic and protected steel pipe, and leaks from these systems contribute less than 5% of the total U.S. emissions. These regional variations and the low emissions associated with plastic pipes are significant as the U.S. moves toward replacement of older pipelines with plastic and uses plastic for new distribution expansion.”

This study was the third in a series reviewing methane emissions from throughout the natural gas supply chain. In each case the research was performed with the cooperation of the EDF, an academic institution, and relevant natural gas facility owners and operators.

Stay tuned for a blog in the coming weeks where we’ll discuss some of the parallels between each of the three studies.

Comprehensive Study Shows Decreasing Emissions from Local Natural Gas Distribution Systems

Washington, D.C. – A study published today in Environmental Science & Technology led by a team from Washington State University (WSU) found that emissions from local natural gas distribution systems in cities and towns throughout the U.S. have decreased in the past 20 years, to levels 36 to 70 percent lower than current estimates. This reduction reflects significant upgrades at metering and regulating stations, improvements in leak detection and maintenance activities and replacement of older pipeline materials.

“A concerted effort by natural gas utilities to upgrade our nation’s pipeline network in order to enhance safety has contributed significantly to a declining trend in emissions from the natural gas distribution system,” said AGA President and CEO Dave McCurdy. “Natural gas utilities are leading a fact-based dialogue about our nation’s energy future. Better data informs that conversation and help us to continually improve the delivery of natural gas to homes and businesses safely and reliably.”

Led by Regents Professor Brian Lamb in WSU’s Laboratory for Atmospheric Research with assistance from Conestoga-Rovers and Associates, an engineering and environmental consulting firm, the study provides the most comprehensive set yet of direct measurements of emissions from the distribution system. They estimate that emissions from the distribution system range from approximately 393 to 854 gigagrams per year, which is between 0.1 and 0.2 percent of the natural gas delivered nationwide.

The U.S. Environmental Protection Agency’s annual Inventory of U.S. Greenhouse Gas Emissions and Sinks currently uses data collected in the 1990s in a study sponsored by the Gas Research Institute and the EPA. The WSU researchers found dramatically lower emissions, particularly, at metering and regulating (M&R) stations. In fact, because of the significant differences they saw from data from the early 1990s, the researchers revisited nine sites from the previous study and found an average of one-twelfth fewer emissions than 20 years ago from those M&R stations. The researchers also measured reductions in emissions from individual pipeline leaks as compared to earlier studies.

“Because of its abundance and inherent efficiency, natural gas is a foundation fuel for our nation’s clean and secure energy future. Safety is our top priority and as we strive to make our systems safer by upgrading and modernizing our infrastructure we are also making them cleaner,” said McCurdy.

Results from the study by WSU suggest that the number of pipeline leaks have decreased 25 percent for mains and 16 percent for services due to the use of better pipe materials, efforts to seal cast iron joints, and enhanced leak detection and repair procedures.

Since 1990, natural gas utilities have installed modern plastic pipes at a rate of 30,000 miles per year and installed cathodically protected coated steel mains at 1,500 miles per year, both connecting new customers and upgrading existing pipeline infrastructure. They have also added nearly 600,000 miles of distribution mains and service lines to serve 17.5 million additional customers. Pipes that may no longer be fit for service are being replaced with ones made from more modern materials.

Decisions to replace pipe are rooted in enhanced risk-based integrity management programs. America’s natural gas utilities work with their state regulators, legislators and other key stakeholders to advance important safety policies that both enhance system integrity and support increased access to natural gas service for homes and businesses.

AGA and many of its member companies were involved in the development of, and have been partners in the EPA’s Natural Gas STAR program since its inception in 1993, and the industry is working with EPA to develop a new voluntary Gold STAR certification for the natural gas distribution sector. In May 2014, the AGA Board of Directors also approved a set of voluntary guidelines for the purpose of further emissions reductions.

Dr. Lamb’s project is part of a group of ongoing studies that are looking at the entire natural gas supply chain, from the production wells to the transmission pipeline system to local distribution systems. The study was done in coordination with major natural gas utilities and the Environmental Defense Fund.

As part of the study, the research team carefully measured numerous sites selected from lists of known leaks provided by the twelve participating utilities in various regions around the country that met specific criteria to ensure a comprehensive and representative dataset. The researchers took direct emissions measurements of 230 randomly selected, representative leaks from underground pipelines as well as at 229 metering and regulating stations where natural gas is measured and regulated from higher pressure pipelines to lower pressure distribution pipelines.

The group also used different methods than in the previous study, which Lamb believes results in a more accurate assessment of the actual emissions. The researchers made twice as many measurements as in the previous study and carefully checked their results with back-up methods.

8/11 Serves as Reminder to Call 811 Before Digging

PORTLAND, Ore. — NW Natural (NYSE:NWN) hopes this date, 8/11, will serve as a reminder to call 811 before digging to have underground utility lines marked. Every six minutes a line is damaged because someone decided to dig without first calling 811.

“On Aug. 11 and throughout the year, we remind homeowners and contractors to call 811 before digging to eliminate the risk of striking an underground utility line,” said Scott Gallegos, compliance supervisor for NW Natural. “It really is the only way to know which lines are buried in your area.”

Striking a gas pipeline can cause injury, repair costs, fines and inconvenient outages. That’s why it is a federal law to call 811 at least two business days before digging.

When the call is made, the homeowner or contractor is connected to the local one-call center, which notifies the appropriate utilities of their intent to dig. Professional locators are then sent to the requested site to mark the locations of underground lines with flags, spray paint or both.

Northwest Gas Association’s 2014 Natural Gas Outlook Highlights Potential for Increased Regional Demand

PORTLAND, OR – This week the Northwest Gas Association (NWGA) released the 2014 edition of the annual Natural Gas Outlook Study, a regional look at natural gas supply, demand and infrastructure in the Pacific Northwest.

Released annually, the Gas Outlook provides a detailed ten-year overview of expected natural gas demand, supply availability, infrastructure development and prices in the Northwest. The Outlook offers unique insight, representing a consensus view of the regional natural gas market developed by industry participants directly serving Washington, Oregon, Idaho and British Columbia.

“The Natural Gas Outlook serves as an important point of reference for energy stakeholders in the Pacific Northwest,” said Ed Brewer, NWGA Board President and Vice President and General Manager of Williams Northwest Pipeline. “These stakeholders are navigating decisions concerning abundant North American natural gas supply options, existing and potential new markets and the infrastructure needed to bring the supply and demand together,” he added.

The 2014 release continues the trend of regional growth in natural gas demand, projecting an annual growth rate of 1.5%, up from 1.2% last year. Two scenarios, discussing the potential for accelerated growth in the power generation and industrial sectors, are new in this year’s report. Looming coal plant retirements and manufacturers seeking access to affordable North American gas supply led to these additions as a means of analyzing potential large changes in demand that do not show up in the regular Outlook data set.

“The 2014 Outlook demonstrates that our region remains in a period of steady growth in demand for natural gas,” said Dan Kirschner, NWGA Executive Director. “However, a number of indicators point toward the potential for significant expansion in the coming years, particularly for industrial uses, as a fuel for generating electricity and for export. Historically, our study hasn’t addressed prospective market developments until they’re reflected in the resource plans of regional utilities. However, the potential for increased natural gas loads due to the need to replace existing coal-fired generation and new opportunities in the industrial sector led to the inclusion of these developments as alternative scenarios in our analysis.”

The 2014 Outlook continues to indicate a potential need for new or expanded natural gas delivery infrastructure by the end of the decade. While the current delivery system operates efficiently and reliably, the study notes: “Industrial and generation demand above the expected case will amplify and accelerate the need for incremental capacity.”

The full 2014 Natural Gas Outlook Study is available to view or download at:

http://www.nwga.org/wp-content/uploads/2014/03/2014OutlookWeb.pdf

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ABOUT THE NORTHWEST GAS ASSOCIATION: The NWGA works to foster understanding among opinion leaders and informed decision- making by governing officials on issues related to natural gas in the Pacific Northwest. Its members include six natural gas utilities serving communities throughout Idaho, Oregon, Washington and British Columbia, and three transmission pipelines that transport natural gas from supply basins into and through the region.

More than Half a Million Northeast Homes Switched to Natural Gas Heat from 2000-2010

Washington, D.C. – The American Gas Association (AGA) estimates that more than half a million housing units in the Northeast switched from oil to natural gas for their primary heating fuel from 2000-2010. This estimate comes from AGA’s report, Residential Space Heating Changes in the Northeast, 2000-2010, which was compiled using data from the U.S. Census Bureau’s American Community Survey. AGA examined 217 U.S. northeastern counties for changes in home heating fuel between 2000 and 2010 and found that natural gas conversions topped those of all other fuels combined during that decade.

“Over 177 million Americans throughout the nation rely on clean natural gas to meet the daily needs of modern life, whether it’s to heat their homes, provide a hot shower or cook a meal,” said AGA president and CEO Dave McCurdy. “Our domestic abundance of natural gas has led to an era of market stability that translates to a difference our customers can see in their pockets. This report shows that customers recognize the value of natural gas as an affordable, efficient, safe and reliable energy choice.”

America’s natural gas delivery system is extraordinarily efficient, with 92 percent of the natural gas produced at the wellhead being delivered to customers as usable energy. Combined with comparatively low prices and a lower emissions profile, this means that direct use of natural gas results in substantial savings in dollars and greenhouse gas emissions. Nationwide, customers who heated their homes with natural gas during the 2011-2012 winter heating season saw average savings of 70 percent compared to those using heating oil, and more than 32 percent compared to homes heated with electricity, according to the Energy Information Administration. Natural gas utilities also make significant investments in energy efficiency programs to help customers reduce energy use, thereby saving their customers across the United States more than $300 million in 2011 – about $107 per household.

Homes heated with natural gas also made up the largest share of new single family housing unit construction from 2000-2012. Much of the increase in natural gas-heated homes can be attributed to infrastructure growth of utility gas systems in the Northeast. Greater infrastructure investment in this region and the expansion of natural gas lines to potential customers could further facilitate the conversion of the more than six million housing units in the area that are not yet heated by natural gas.

America’s natural gas utilities operate over two million miles of pipeline throughout the United States – the safest, most reliable energy delivery system in the country. Utilities invest more than $7 billion annually to help enhance safety, upgrade systems and expand service so that more Americans can access this foundation fuel. Further expansion will create greater opportunity for leveraging the economic and environmental benefits of natural gas and achieving our nation’s goal of a more secure energy future.

“America’s natural gas utilities want all Americans to have access to the benefits of natural gas,” said McCurdy. “We are committed to making investments and encouraging policies that boost the growth of the natural gas delivery system to service new homes and businesses, and to help spur economic development in every state.”

U.S. Domestic Natural Gas Resources at Record Levels

Washington, DC – The American Gas Association (AGA), in coordination with the Potential Gas Committee (PGC), today released the PGC’s year-end 2012 biennial report: Potential Supply of Natural Gas in the United States. The new assessment finds that the United States possesses a technically recoverable natural gas resource potential of 2,384 trillion cubic feet (Tcf). This is the highest resource evaluation in the PGC’s 48 year history—exceeding by 486 Tcf the previous record-high assessment from year-end 2010.

“This ground up, science-based assessment emphasizes our nation’s robust supply of natural gas, and confirms that we can continue to rely on abundant, clean natural gas for our future energy needs,” said Dave McCurdy, president and CEO of AGA. “By investing in our energy future and harnessing the promises of this resource, we can look forward to decades of market stability – and that’s great news for our customers.”

The future supply of domestic natural gas continues to grow due to the emergence and advancement of key technologies that are able to unlock gas production from reservoirs such as shale formations. For the next decade and beyond, domestic natural gas supplies are expected to be high enough to support an increase in demand across all sectors – unlocking the door for expansion in residential, business, transportation and commercial and industrial applications.

When the PGC’s results are combined with the U.S. Department of Energy’s latest available determination of proved dry-gas reserves — 304.6 Tcf as of year-end 2010 — the United States has a total available future supply of 2,688.5 Tcf, an increase of 486.1 Tcf over the previous evaluation.

The PGC’s year-end 2012 assessment of 2,384 Tcf includes 2,226 Tcf of gas attributable to “traditional” reservoirs (conventional, tight sands and carbonates, and shales) and 158 Tcf in coalbed reservoirs.

“The PGC’s year-end 2012 assessment reaffirms the committee’s conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, and in all types of reservoirs—from conventional, ‘tight’ and shales, to coals,” said Dr. John B. Curtis, professor of Geology and Geological Engineering at the Colorado School of Mines and Director of its Potential Gas Agency, which provides guidance and technical assistance to the Potential Gas Committee.

“Every day, America’s natural gas utilities deliver clean, domestic natural gas to more than 65 million residential, commercial and industrial natural gas customers,” said McCurdy. “Natural gas can help improve our economy, national security and the environment – and this assessment shows we have the necessary resource abundance to help make those goals a reality for our nation. We appreciate and welcome the fact-based, time-tested objective work that the PGC and its members have put into developing this valuable report.”

Spectra’s Doug Bloom Talks Natgas in the Vancouver Sun

Stories about the potential economic benefits of natural gas sourced from within North America have become increasingly common in the past year.  Last week the Vancouver Sun got in on the act with a story highlighting the perspectives of a couple of key leaders from NWGA member companies, Doug Bloom from Spectra Energy and John Walker of FortisBC.

We’ll cover the FortisBC section of the article in our next blog post; today I want to highlight some of the great insights provided by Doug Bloom, President Western Pipelines, for NWGA Member Company Spectra Energy.

In a talk given to the Vancouver board of trade Mr. Bloom hit on the growth in British Columbia natural gas supply, a development that has led to more greater supply diversity not only in Western Canada but throughout the Pacific Northwest, saying B.C. has truly huge natural gas resources. We’ve got over 100 years of supply at current production rate.”

Bloom continued by highlighting some key environmental benefits provided by switching to natural gas:

“By shifting 25 per cent of current energy use from coal to natural gas, Canada and the U.S. could meet their national emissions (reduction) targets. 

“Gas in transportation is also an important opportunity. A company called PIRA, Petroleum Industry Research Associates, a prominent consultant, said that gas demand in large trucks and fleet applications in the United States could reach 14 (billion cubic feet) a day by 2030. 

“That could reduce diesel demand by up to two million barrels per day or more through a mix of LNG and compressed natural gas applications.”

Click here for the entire article.

DOE Report Affirms Role of Natural Gas as Foundation Fuel

Washington, D.C. – A recent report commissioned by the U.S. Department of Energy (DOE) entitled “Macroeconomic Impacts of LNG Exports from the United States” affirms the position of natural gas as a foundation fuel for the United States and the nation’s energy future. The American Gas Association (AGA) is encouraged to see DOE examining the important role that natural gas will serve in our nation’s energy and economic future. 

“The Department of Energy study acknowledges the tremendous impact our domestic abundance of natural gas is having on energy markets at home and abroad. Natural gas already provides one-fourth of our nation’s energy. With natural gas as a foundation fuel for a clean and secure energy portfolio, we can meet our national goals of boosting our economy, improving our environment and increasing our energy security,” said AGA President and CEO Dave McCurdy.

“The report states that our nation’s natural gas resource base is able to satisfy existing and new markets at very competitive prices. DOE analysis indicates that U.S. exports of natural gas would allow for continued stable pricing for the 177 million Americans who depend on the safe and reliable delivery of natural gas every day.”

“We envision a future where natural gas not only provides energy for homes and businesses, but runs a significant number of our vehicles, generates power and supports other forms of renewable energy. America’s natural gas utilities will continue to provide safe and reliable service to our customers today while building the 21st century infrastructure necessary to serve the nation’s energy needs tomorrow. ”

EIA: Record Increases in U.S. Crude Oil and Natural Gas Reserves in 2010

U.S. proved crude oil and natural gas reserves achieved record annual volumetric increases in 2010 according to U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Proved Reserves, 2010, released today by the U.S. Energy Information Administration (EIA).

“The use of horizontal drilling and hydraulic fracturing in shale and other tight rock formations played an important role in the increase of oil and natural gas reserves,” said EIA Administrator Adam Sieminski. “For both oil and natural gas, these reserves increases underscore the potential of a growing role for domestically-produced hydrocarbons in meeting current and projected U.S. energy demand.”

Proved oil reserves, which include crude oil and lease condensate, increased by 13 percent in 2010 to 25.2 billion barrels, marking the second consecutive annual increase and the highest volume of proved reserves since 1991.

Texas recorded the largest volumetric increase in proved oil reserves among individual states, largely because of ongoing development in the Permian and Western Gulf Basins, while North Dakota had the second largest increase, driven by development activity in the Bakken formation in the Williston Basin.

Natural gas proved reserves, estimated as “wet” gas that includes natural gas plant liquids, increased by 12 percent in 2010 to 317.6 trillion cubic feet (Tcf), the twelfth consecutive annual increase and the first year U.S. reserves surpassed 300 Tcf.

Texas also led the nation in additions of natural gas proved reserves, primarily because of continued development of the Barnett and Haynesville/Bossier shale formations. Louisiana had the second largest volumetric increase, largely the result of ongoing development activity in the Haynesville shale formation. In Pennsylvania, accelerated drilling programs in the Marcellus shale formation more than doubled the state’s year-end 2009 volumes.

Contributing to the increases for both oil and natural gas proved reserves was the expanding application of horizontal drilling and hydraulic fracturing in shale and other “tight” (very low permeability) formations. Another important factor for each fuel – particularly oil – was a higher price used to assess economic viability relative to the prices used for the 2009 reporting year.

Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. EIA’s estimates of proved reserves are based on an annual survey of about 1,200 domestic oil and gas well operators.

Publication of 2010 reserves data was delayed because of budgetary restrictions that limited EIA’s survey data collection efforts. U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Proved Reserves, 2010 is available on the EIA Internet site at: http://www.eia.gov/naturalgas/crudeoilreserves/.