The Week in Gas: Week of August 27, 2012.

A few interesting items to cover this week, but first a big congratulations to two members of the NWGA Board of Directors, K. Frank Morehouse and Scott Madison, for accepting new roles with MDU Resources.

 “Coal Fired Power Loses to Natural Gas and Renewables in the West” (Denverpost.com)

This week the Federal Energy Regulatory Commission (FERC) hosted a daylong summit in Portland for west coast energy stakeholders to discuss the growing use of natural gas for power generation. Articles like this demonstrate how far along the road we already are when it comes to gas becoming a primary generation fuel in the U.S.

Key Point: Natural-gas accounts for 22 percent of western generation. Still, in the last 15 years natural-gas generation has more than quadrupled to 79.8 million megawatt-hours in 2011, according to the WRA report.

“New Methane Hydrate Research: Investing in our Energy Future” (Energy.gov)

We’ve highlighted methane hydrates in a blog post before, some consider them to be  a huge part of our energy future due to the amount of energy stored in as natural gas in ice under the ocean.  It will be interesting to see what studies like this one come up with.

Key Point: The Energy Department announced today an investment of nearly $5.6 million in 14 research projects designed to help us better understand the impacts of methane hydrates on our future energy supply. The projects will focus on field programs for deepwater hydrate characterization, the response of methane hydrate systems to changing climates, and advances in the understanding of gas-hydrate-bearing sediments.

Finally, here’s a great video giving an overview of an Avista natural gas generation plant, have a look before starting your holiday weekend:

 

“The Week in Gas” is posted each Friday, spotlighting some of the most interesting gas related stories we come across each week.

 

Follow the NWGA on Twitter: @Ben_at_NWGA

NWGA Board Members Morehouse & Madison Accept New Roles Within MDU Resources

BISMARCK, N.D. – Aug. 31, 2012 – The Northwest Gas Association congratulates Board President, K. Frank Morehouse and Board Member Scott Madison on accepting new roles within the MDU Resources Group, Inc. (NYSE: MDU).

MDU announced today that Mr. Morehouse has been named president of the corporation’s utility group, which includes Montana-Dakota Utilities Co., Great Plains Natural Gas Co., and NWGA members Cascade Natural Gas Corp. and Intermountain Gas Co.

Morehouse’s new role will be effective Jan. 4, 2013. He replaces David L. Goodin who earlier this month was named to succeed Terry D. Hildestad as president and CEO of MDU Resources upon Hildestad’s retirement Jan. 3, 2013.

“Frank has consistently performed at a high level throughout his career with our company. I have confidence that our utility companies will be in great hands as we continue to grow to 1 million customers,” Goodin said.

The utility group serves about 976,000 electric and natural gas customers in eight states.

Morehouse, who has 35 years of experience in the energy industry, has been with the company for 12 years, most recently as executive vice president and general manager of Intermountain Gas and Cascade Natural Gas. He also served as vice president of operations for Montana-Dakota Utilities, as well as manager of Montana-Dakota’s Dakota Heartland Region. Morehouse also managed the company’s Great Plains Natural Gas operations in western Minnesota.

Morehouse is a native of Havre, Mont., and earned a bachelor’s degree in business administration. He has held numerous positions with utility, producer, pipeline and marketing companies. He will relocate to Bismarck, N.D.

MDU Resources also announced that Madison will succeed Morehouse on Jan. 4, 2013, as executive vice president and general manager of Intermountain Gas and Cascade Natural Gas. Madison has been with the company since 1997, most recently as vice president, regulatory, chief accounting officer, assistant secretary and assistant treasurer for Intermountain and Cascade.

“This will be a great opportunity for Scott and we look forward to him leading our western region companies with exceptional customer service and safety as his main focus,” Goodin said.

Madison is a native of Mud Lake, Idaho and earned a bachelor’s degree in accounting from the University of Idaho. He spent 10 years with Arthur Andersen before joining the company and is a certified public accountant. He also serves as chairman of the board of directors for the Better Business Bureau of the Snake River Region and as the state treasurer for Idaho Ducks Unlimited. His office will remain in Boise, Idaho.

White House Executive Order Will Increase Competitiveness of U.S. Manufacturing

Washington, D.C. – The American Gas Association (AGA) today applauded the announcement of a White House Executive Order to accelerate industrial energy efficiency.

The Executive Order, “Accelerating Industrial Energy Efficiency,” will direct the U.S. Department of Energy (DOE) and the U.S. Environmental Protection Agency (EPA) to support, coordinate and encourage a national goal of adding 40GW of combined heat and power (CHP) applications by 2022. Combined with what is currently being used, this would increase the total CHP in the market to 122GW.

“This CHP target is not only meaningful, but it’s achievable,” said AGA President and CEO, Dave McCurdy. “Despite its proven track record, CHP remains underutilized and is one of the most compelling sources of energy efficiency that could, with even modest investments, move the nation toward a cleaner environment.

Achieving these targets would mean billions of dollars in new capital investment in American manufacturing and U.S. facilities over the next decade, resulting in savings of at least $100 billion for manufacturers.

McCurdy added: “Natural gas utilities are committed to a continued partnership with our industrial consumers, state policymakers and the Administration to help expand the adoption of these highly efficient technologies and processes, which embrace our domestic supply of natural gas and create jobs here at home.”

CHP technologies, using American energy, labor and knowledge, generate electricity and capture useful heat simultaneously to increase the overall efficiency of an energy system. Using less fuel and emitting lower levels of greenhouse gases such as carbon dioxide, CHP is an established technology that lowers energy costs to businesses and reduces their environmental footprint. The use of natural gas, the preferred fuel choice for CHP applications, allows for new electricity generation to meet current and future demand at costs up to50 percent less than traditional forms of delivered new baseload electricity.

This new target, a 50% increase in existing CHP capacity, would be significant, resulting in an annual savings to energy users of $10 billion compared to current energy use, additional annual energy savings of about one quadrillion btu of energy, and an annual reduction of 150 million metric tons of CO2 annually – equivalent to removing over 25 million cars from the road

Natural Gas Term of the Week: Dig-In

Natural Gas Term of the Week: When buried gas facilities (or other underground utilities) are damaged by excavation.

What it means: Gas transmission and distribution pipes are typically found below ground, this keeps them safe from disturbances related to weather but it’s an issue when someone starts digging without knowing what’s below their feet.

To be informed about the location of utilities before digging it’s important to always Call 811 before you dig.  There’s no charge to have a professional come out and mark the underground utilities where you plan to dig.

What happens if a dig in does occur? Your local gas utility is prepared and works with emergency services to ensure a coordinated response if necessary.  NWGA member companies put plenty of effort into spreading the dig safely message, check out this recent commercial released by Avista Utilities:

A Natural Gas Term of the Week is posted each Monday, check back weekly to boost your natural gas IQ.  Follow the NWGA on Twitter @Ben_at_NWGA

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/.

EPA and USCG facilitate TOTE’s groundbreaking move to convert its vessels to alternative fuels

Tacoma, WA –Totem Ocean Trailer Express (TOTE) has received a permit providing a conditional waiver from the current Emissions Control Area (ECA) fuel sulfur content requirements of MARPOL Annex VI regulation 14.4 while the company pursues conversion of its vessels to alternative fuels. The permit was issued by the United States Coast Guard (USCG) under authority provided in Regulation 3 of Annex VI.

This permit is the product of a public-private partnership among TOTE, the United States Environmental Protection Agency (EPA) and the USCG. It will enable TOTE to develop and convert its two ORCA-class vessels, already the “greenest” ships in the U.S. domestic fleet, to the use of Liquefied Natural Gas (LNG) as their primary fuel source. The conversion will advance technology and accelerate the use of natural gas as a cleaner domestic energy source.

“When the Orca class vessels were delivered in 2003, they were purpose-built to serve the Alaska market and exceeded all regulatory and environmental standards. Post LNG conversion, the Orca vessels will again set a new standard for environmental responsibility. These changes will provide benefits to the residents of Alaska well into the 21st century,” said John Parrott, President of TOTE.

To TOTE’s knowledge, this will be the first conversion in the world of vessels of this type. In addition to exceeding the sulfur reduction goals of ECA by 95 percent, when the TOTE ships are converted, they will achieve significant emissions reductions in all other categories of emissions: particulate matter (PM), nitrogen oxide (NOX) and carbon dioxide (CO2); making these ships among the cleanest in the world. More importantly, these broader benefits will continue to accrue and compound over the next thirty years or longer. The shore side LNG infrastructure that is to accompany TOTE’s plan may help other transportation industries in Puget Sound follow TOTE in converting to LNG. This could result in a significant increase in air quality throughout the Puget Sound region.

“This is the first permit issued under the Annex VI, Regulation 3 program, and it is tangible evidence that when committed organizations join together, innovative solutions can result,” said Phil Morrell, Vice President of Marine and Terminal Operations at TOTE.

The comprehensive project will also lead to the establishment of long-term supplies of LNG for use by other sectors of the transportation industry in the Puget Sound region. The project will extend environmental benefits throughout the region by breaking through supply barriers that have constrained the growth of LNG in the transportation industries.

“We are very pleased that the EPA and Coast Guard share our vision for LNG use aboard our vessels, and were willing to work with us to make it a reality. I would like to particularly recognize the diligent and professional staff of the EPA and USCG for their hard work on this project,” said Parrott.

While TOTE believes that proving the effectiveness of LNG in large commercial operations will have long-lasting benefits for the U.S. maritime industry and for the entire Puget Sound region, it is also focused on the benefits for its customers. Conversion to LNG assures long-term access to lower-cost sources of energy, enabling TOTE to provide economical service to the people of Alaska for many years to come. This project is consistent with TOTE’s core philosophies that reflect a deep commitment to the environment and to the communities it serves. TOTE is proud to once again be seen as a leader in the U.S. maritime industry.

Natural Gas Term of the Week: Odorant

What it means: Any material added to natural or LP gas in small concentrations to impart a distinctive odor. Odorants in common use include various mercaptans and organic sulfides.

See it in action: That rotten egg smell when natural gas is present isn’t actually the gas at all.  Natural gas is odorless, so special additives, typically a naturally occurring substance called mercaptan, are inserted into the gas transmission system to ensure you know when gas is around.

That smell is unpleasant on purpose, if you catch a whiff call your utility, it may indicate a gas leak. NW Natural has a good overview of what steps you should take if that rotten egg smell catches your attention.


Want natural gas that smells a little better?  You won’t find it in your home, since that odor serves an important purpose. However, the Volcano at the Mirage Hotel in Las Vegas strips out the odorants in the gas that powers their nightly shows, and replaces it with something a little more festive…the smell of Pina Coladas.

A Natural Gas Term of the Week is posted each Monday, check back weekly to boost your natural gas IQ.  Follow the NWGA on Twitter @Ben_at_NWGA

NPC Study Emphasizes Significant Opportunities for Natural Gas Vehicles

Washington, D.C. – Developing the market for natural gas vehicles enhances our energy security, our competitiveness, and encourages the expansion of transportation fueling infrastructure and technologic advances. The American Gas Association (AGA) today applauded the release of the National Petroleum Council (NPC) study, Advanced Technology for America’s Transportation Future, which discusses the opportunities and challenges facing future use of natural gas as a transportation fuel. The study’s findings demonstrate a viable spot for both light and heavy-duty natural gas vehicles (NGVs) in both retail and fleet markets.

“NGVs are a proven way to improve air quality, while reducing the United States’ dependence on foreign oil, and we are pleased to see the NPC highlight the many benefits this fuel can bring to the transportation sector,” said AGA President and CEO Dave McCurdy. “The economics are in favor of NGVs, and we should take advantage of the opportunities that exist to help meet America’s transportation needs today.”

In the coming days, the Obama Administration will make a final ruling on fuel economy and greenhouse gas regulations that will guide automakers’ product plans until the middle of the next decade. McCurdy was president and CEO of the Alliance of Automobile Manufacturers and was instrumental in developing the historic agreement to increased mandatory fuel economy to 35.5 miles per gallon for cars and light-duty trucks by model year 2016 and created a blueprint for bringing together government and industry for a common purpose.

The NPC study highlights several factors that demonstrate the positive role natural gas can have in the future. “The potential for a long-term and low-cost domestic supply of natural gas, supported by significant economically recoverable shale gas resources, presents an opportunity for the increased use of natural gas as a transportation fuel, replacing some part of the current requirements for oil in transportation: gasoline in light duty applications and diesel fuel in heavy duty vehicle,” it states.

The study says that conditions already exist that will help ensure that NGVs can be an important part of America’s transportation future. Citing the Energy Information Administration (EIA)’s Annual Energy Outlook 2010, which estimated technically recoverable shale gas resources at 368 trillion cubic feet, it explains, “If this expansion in reserve base evidenced in recent years continues to result in sustainable long term and stable price advantages relative to petroleum fuels, there are economic incentives for increased use of natural gas in the transportation sector. The natural gas fuel price differential advantage over gasoline and diesel is already significant. The EIA suggests that this gap between gasoline/diesel and natural gas may widen further through 2035.”

The low price of natural gas compared to gasoline or diesel can in itself drive greater use of this alternative fuel. With fuel costs making up 40 percent of the total costs of class 8 combination trucks such as tractor trailers and dump trucks, the savings from switching to natural gas are substantial and can offset the initial cost hurdle of a natural gas engine within just a few years of operation.

For more information or to access the study, visit the National Petroleum website.

What Powers a Natural Gas Utility? Avista’s New Commercial Has an Interesting Answer…

While it might be natural gas that’s cooking your food, heating your water and warming up your home, there’s something else that powers a natural gas utility… Avista Utilities began airing new commercials this week highlighting that special fuel, any guesses? It’s people!

Don’t think Soylent Green, think of the hundreds (or thousands) of employees required to make a utility work. Avista and other gas and power utilities are large and complex companies, but unlike certain other utility providers (think cable and phone companies) they are often headquartered right where they operate. Meaning those people on the other side of your gas meter, whether they’re ensuring pipeline safety, answering customer calls or planning the next system expansion, are your neighbors as well.

Have a look at the new commercial below: