Renewable is Doable

 

Renewable is Doable

By Alex Schay

In North America, we rely on natural gas to provide the majority of our space and process heat. It is also safe to assert that, in most cases, the next MegaWatt hour will be generated through the combustion of natural gas. For example, 80% of the heat used for food processing is derived from natural gas.

In order to make meaningful progress toward addressing climate change, gas utilities are taking steps to reduce the carbon footprint of their fuel mix. Gas utilities have five tools that will enable them to reduce the carbon intensity of their fuel, including:

  • Energy efficiency;
  • Reduce gas flaring and fugitive methane emissions;
  • Tighten up pipeline infrastructure to minimize methane leakage;
  • Surplus renewable electricity may be used to convert water into Renewable Hydrogen (RH2); and,
  • Decomposition of organic waste may be used to produce Renewable Natural Gas (RNG), e.g., at landfills, at commercial & municipal wastewater treatment plants, as well as on dairies and confined animal feeding operations.

What is Renewable Natural Gas?

Both Conventional Natural Gas and Renewable Natural Gas (RNG) contain an identical CH4 molecule. RNG is a green fuel that comes from waste material, such as garbage, human waste, and animal manure. As such, RNG uses waste streams that are part of the current lifecycle to create a useful product that burns cleanly and significantly reduces Greenhouse Gas emissions as compared with gasoline or Diesel.

 

GHG reductions accrue when using CNG and RNG as opposed to gasoline or Diesel
Conventional (fossil) Natural Gas (CNG) 5% – 15%
Renewable Natural Gas (RNG) sourced from a landfill 40% – 50%
RNG sourced from a municipal wastewater treatment plant 75% – 85%
RNG generated from animal manure Ø  > than 100%

Food processing plants may offer a special opportunity for the production of RNG. Many food-processing facilities have their own wastewater treatment plant (WWTP). Often times, gas generated at commercial WWTPs is captured in covered lagoons and then sent to a flare. These types of waste-management scenarios offer significant opportunities to improve the gas collection, production, and utilization.

Because the Federal Renewable Fuel Standard classifies biogas generated at food-processing facilities as an “Advanced Biofuel,” RNG generated at such projects will only earn D5 Renewable Identification Numbers (RINs) when used as a transportation fuel. More valuable D3 RINs, however, are generated at landfills, municipal WWTPs, as well, as from animal manure. As such, RNG from food-processing facilities will not deliver as much economic benefit as RNG from landfills or municipal WWTPs when used as a transportation fuel.

To that end, RNG produced at food-processing plants may offer a cost-competitive resource that gas utilities may use to reduce their fuel mix’s carbon footprint. For example, a recent analysis of anthropogenic GHG emissions associated with RNG that will be produced at a dairy-processing plant in Washington State revealed that this fuel will have a carbon footprint that is more than 95% lower than conventional natural gas. In this way, food processors may help gas utilities reduce their fuel mix’s carbon intensity in a cost-effective manner.

At present, 32% of US energy consumption is fueled by natural gas. Unlike electricity, which must be used immediately or lost forever, RNG and RH2 can be stored for use when needed. A diversified decarbonization strategy will embrace all technologies, including cleaning up both the electricity grid and natural gas pipeline network. With this context in mind, we encourage an “All-of-the-Above” strategy as we work to decarbonize our energy future.

 

The Value of Natural Gas in the Pacific Northwest – Electrification: Climate Panacea or Risky Business?

What is the best path forward to achieve meaningful emissions reductions in the Northwest? Some believe that “electrify everything” is the answer. But the electrification pathway to deep decarbonization carries serious economic and reliability risks, as well as environmental consequences. If you rely on one source for all energy, what happens during outages? What happens during peak cold days in the winter, when demand-response systems and utility-scale power storage systems (i.e. large batteries) cannot sufficiently supplement intermittent production by solar and wind sources?

Let’s look at some numbers. FortisBC’s natural gas system is designed to meet the peak demand equivalent of 28.1 GW. In contrast, BC Hydro’s current peak demand is 11.1 GW; when its Site C dam is completed, that will add an additional 1.1 GW of generation at a cost of about $10 billion. Based on the expected cost of the Site C project, electrifying just FortisBC’s natural gas demand would require multiple billion dollars in investments in BC Hydro’s system.

Here’s a real-world example. On January 7, 2017, from 7:00a, to 8:00 am, the electric system delivered about 30 GWh of useful energy to Northwest consumers (energy for space and water heat, lighting, electronics, etc., not including BC). During that same one-hour time frame, the natural gas system delivered the equivalent of 53 GWh, or almost double the amount of end-use energy. Imagine tripling the current power infrastructure to serve one hour of load (serving an average winter hour might only require doubling the power delivery infrastructure) while abandoning more than 100,000 miles of existing safe, reliable, resilient, and affordable energy delivery infrastructure.

A note on affordability and resilience. The current delivered cost of electricity to Northwest consumers is about three times more than the energy equivalent amount of natural gas.[1] Underground natural gas distribution systems serving the Northwest communities devastated by the tragic 2020 Labor Day fires were safely shut down ahead of the inferno are undamaged and available to be placed back into service when homes and businesses are rebuilt.

Ultimately, electrification would require staggering investments in the electric grid (e.g., transmission and distribution infrastructure) along with significant investments in additional power sources – whether energy efficiency, power storage, demand-response, new generation, or potentially costly purchases on the spot market. Electrification would also compel homeowners and businesses to replace appliances and cause significant power bill increases.

According to a 2018 American Gas Association study, aggressive policy-driven residential electrification could reduce GHG emissions across the U.S. by only 1 to 1.5 percent by 2035.[2] In the Northwest, served by gas distribution[3] and transmission systems with lower emissions relative to elsewhere, the reduction achievements would be even smaller.

And no one has yet estimated the environmental costs of the new electric transmission and distribution infrastructure that would have to be built to move the replacement electricity to market, nor the incremental emissions that will result from increased electricity generation in the near-term,[4] nor the waste stream created by renewables,[5] or whether major new transmission lines could be built from renewable projects to cities due to increased opposition and regulatory delays.

Steps towards a Low-Emissions, Diversified Energy Future

It makes considerably more sense to keep our options open in the future by maintaining a mix of energy sources and employing each where it is most efficient and cost-effective. At the same time, we must continue to innovate and reduce emissions from all energy sources.

In the Pacific Northwest, the natural gas industry is committed to supporting GHG abatement targets while also continuing to provide its customers with choices and reliable solutions at a reasonable and predictable cost. NWGA members are exploring how best to reliably and affordably decarbonize their systems and some have made concrete commitments:

    • 30% reduction in emissions by 2030
    • Reduce oil and gas system emissions by 35% by 2030
    • Zero methane emissions from distribution systems by 2022
    • Net-zero carbon by 2050

Furthermore, NWGA members have been and will continue investing in:

    • Energy efficiency and demand-side management programs
    • Replacing higher-carbon fuels for all uses (space and water heating, transportation, electricity generation) with cleaner alternatives such as RNG and hydrogen.
    • Efficient natural gas-fired generation plants to support intermittent renewable energy sources and meet peak demand
    • An ever-tighter natural gas delivery system

These actions will help maintain a healthy and diversified energy system across our region, ensuring system reliability; enabling emissions reductions through innovation, and putting North America’s abundant, low-priced natural gas supply to good use.


[1] U.S. EIA, average annual residential NG Prices; average annual residential electricity prices.

[2] Click here for a summary of the potential implications of residential electrification.

[3] A study conducted by Washington State University found that methane emissions from natural gas local distribution systems throughout the U.S. are also declining.

[4] In BC, this includes investments in liquefied natural gas (LNG) systems to displace marine fuel oil in the international marine segment and to displace coal in Asian economies, with associated emissions reductions.

[5] Decommissioned wind farm turbines are not recyclable, and already posing issues at landfills.  See this NPR story.

Cooking with Gas!

Cooking with natural gas remains the favorite energy choice of those who love to cook. It’s not even close. That’s how the phrase, “Now we’re cooking with gas!” was coined. It expresses enthusiasm, signifying that everything is aligned and working well together; that a plan or a team is producing terrific results. Here are some of the reasons why:

Natural gas generates much more heat than electricity yielding delectable stir fry and perfectly seared meats. Have you ever seen the wok burners in your favorite Asian restaurant? They are remarkable, producing a jet-like flame for fast cooking that yields hot but still crispy vegetables.

Do you want the ability to control your cooking temperature? The precision of cooking with natural gas is unparalleled. The heat can be turned up or down continuously and being able to see the flame and judge how much heat is needed is critical to producing delicate dishes and sauces.

Cooking with gas is safe. Government agencies charged with ensuring public health (e.g. Federal Interagency Committee on Indoor Air Quality; Consumer Products Safety Commission)  haven’t found any health concerns whether cooking with gas or electricity. Of course, all cooking appliances should be properly vented, if possible, regardless of the type of heat used.

A few recent articles, including an opinion piece in The Atlantic, get it all wrong when it comes to cooking with natural gas (click here for technical analysis of The Atlantic article by the American Gas Association). The fact is, natural gas remains a safe, affordable, preferred, and increasingly renewable energy choice for consumers. So let’s get cooking with gas!

The Value of Natural Gas in the Pacific Northwest: Renewable Natural Gas

In today’s blog, we’ll discuss Renewable Natural Gas (RNG).

What is RNG? It is an ultra-clean, ultra low-carbon natural gas alternative. As organic waste decomposes it emits methane gas, called biogas. RNG is sometimes referred to as ‘biomethane,’ a related term. Biomethane or RNG is simply biogas that has been cleaned up to remove impurities and match the quality of pipeline gas such that it may blend with, or substitute for, conventional natural gas.

Regional gas utilities and pipelines continue to work with farmers, developers, and local governments to capture and purify biogas that can be cleaned up to pipeline quality gas and injected into existing natural gas systems. In addition, new policies are being enacted across our region to promote and accelerate further development and adoption of RNG. Here are a few examples from across the region:

In BC, there are five operating biogas projects using agricultural waste, landfill waste, and curbside organic waste to generate about 250,000 Gigajoules (GJ) (equivalent to 237,000 Dth) of RNG annually. FortisBC already purchases and injects RNG into its existing system, as well as investing in and operating biogas upgrading equipment, and is building another RNG-producing facility at the Vancouver Landfill. When the facility begins operation in late 2021, it will double BC’s existing expected RNG supply.

On the customer side, FortisBC was one of North America’s first utilities to introduce a voluntary participation RNG Program in 2011. FortisBC customers can designate between 5 and 100 percent of their natural gas use as RNG and pay a premium on their bill. FortisBC then injects an equivalent amount of RNG into the FortisBC distribution system. Today, more than 10,500 BC homes and businesses are enrolled in the RNG program.

The provincial CleanBC plan, enacted in 2018, set an ambitious target of 15 percent RNG blend by 2030. Though not yet in force, it represents a major shift in how FortisBC needs to look at its gas supply. Ultimately, FortisBC expects to use a number of tools to reach this objective, but if required to fill the gap with RNG, this represents a greater than 30-fold increase in its current supply levels.

In Washington, the state legislature passed a law in 2019 that requires each gas local distribution company (LDC) to offer RNG to its customers and gives those entities the ability to introduce RNG into their standard supply portfolios, provided the cost of RNG does not increase customer costs by more than 5 percent. Washington gas utilities are currently working with Washington Utilities and Transportation Commission (WUTC) staff and other interested parties to develop RNG cost recovery rules, RNG program limitations, and RNG gas quality requirements.

Currently, there are five projects producing or soon-to-begin producing RNG in Washington state – two landfills and one multi-farm dairy-waste digester connected to Williams Northwest Pipeline and two wastewater treatment facilities connected to Puget Sound Energy’s (PSE) distribution system. These facilities are currently all committed to serving the vehicle fuel market, primarily in California. As the vehicle fuel market matures and reaches saturation, however, it is expected that landfill- and wastewater-sourced RNG will be redeployed to serve local utility demand.

PSE has held preliminary discussions with numerous developers seeking to complete RNG projects in western and central Washington and with various municipal and regional wastewater treatment plants and landfills that seek to create additional revenue streams and reduce their own carbon footprint. PSE is engaged in the physical and economic feasibility analyses necessary to interconnect approximately 12 viable RNG projects. PSE recently acquired the RNG produced and upgraded at the large regional Roosevelt landfill in order to serve its gas customers with a clean and renewable resource.

Other Washington utilities are also considering potential supply sources, and some believe they may be able to offer RNG directly to retail customers through opt-in programs by late 2020 or mid-2021. By 2025, as much as 2 percent of Washington gas use could be sourced from renewable sources, with a potential of 5 percent by 2030.

In Oregon, similar to Washington, a law passed in 2019 requires the Public Utility Commission to adopt RNG programs for both large and small gas utilities, enabling them to fully recover costs of integrating RNG into their systems. Up to 5 percent of a utility’s revenue requirement may be used to cover the incremental costs of RNG. The law also outlines goals for adding as much as 30 percent RNG into the state’s pipeline system by 2050. A 2017 study by Oregon’s Department of Energy showed a technical potential of recovering some 48 billion cubic feet (Bcf) of RNG within the state annually, an amount that could supply every home using natural gas in Oregon today with a local, renewable energy source.1

RNG development could reduce U.S. GHG emissions between 101-235 million metric tons (MMT) by 2040 – the equivalent of reducing GHG emissions from average annual residential natural gas use by 95% from levels observed over the last 10 years.2

Oregon’s first gas-grid-connected RNG facility, Threemile Canyon Farms in Boardman, began production in 2019, with a tie into the Williams Pipeline system. Three more projects have announced plans to interconnect to NW Natural’s pipeline distribution system, beginning with the City of Portland’s Columbia Boulevard Wastewater Treatment Plant and Shell New Energies’ Junction City projects in 2020, and the Metropolitan Wastewater Management Commission project in Eugene-Springfield in 2021. Like RNG producers in Washington state, these projects are earmarked to supply the California vehicle market for now, although some of the Portland RNG will power city trucks at a natural gas fueling station to be built at the treatment plant.

Idaho is entering the RNG game too. Intermountain Gas Company has already integrated RNG produced from one dairy farm in Jerome and is looking to bring others online as feasible.

Renewable natural gas is a unique resource. It allows us to capture streams of methane from the decomposition of human and agricultural waste that would otherwise be emitted directly into the atmosphere, clean it up, and put it to beneficial use. RNG significantly reduces greenhouse gas emissions. Furthermore, it allows for optimizing the use of the existing 128,000 miles of energy delivery infrastructure that serves warmth and comfort to about ten million people who live in the Pacific Northwest as well as produce energy for almost 350,000 businesses here.

  1. Biogas and Renewable Natural Gas Inventory SB 337 (2017), 2018. www.oregon.gov/energy
  2. https://www.gasfoundation.org/2019/12/18/renewable-sources-of-natural-gas/

The Value of Natural Gas in the Pacific Northwest: Demand

In today’s blog, we’ll discuss natural demand in the Pacific Northwest.

The overall demand for natural gas in the Pacific Northwest is forecast to grow at nearly the same rate as reported over the last few years: a modest 1.0 percent per year (see forecast demand growth by sector in Table 1). Natural gas as a fuel to generate electricity paces overall expected to increase in regional gas use (see Figure 2), in part due to the retirement of coal generation units in 2021-2022. Meanwhile, residential and commercial customers continue the decades-long trend of using gas more efficiently (see Figure 3), dampening growth in those sectors.

Figure 1 (below) shows how regional demand has fluctuated over the past two decades. Figure 4 shows forecast peak and average day demand. It is important to keep in mind that utilities and pipeline operators must design their systems to deliver energy on “peak” days, which are typically in the winter in the Pacific Northwest.

Unless otherwise noted, the source of charts and tables in this blog is the NWGA.

Figure 1: Historic Regional Demand by Sector (Source: EIA and Statistics Canada Consumption Tables)

NOTES: While regional residential and commercial consumption has remained relatively flat over the past decade, industrial usage has declined considerably, in part due to the “Great Recession” that cost the region more than 20 percent of its industrial gas load between 2007 and 2012. The industrial sector is still the largest regional user; however (see Figure 2).

As noted above, the region is using increasingly more natural gas to generate electricity. However, year-to-year variations occur because gas is typically used when other resources (hydro, nuclear, wind, solar) are unavailable in sufficient quantities. In other words, gas is the last generation fuel on and the first fuel off. In that way, natural gas provides a critical role in ensuring the reliability of the electricity system here as the region transitions to more renewable but intermittent resources.

Table 1: Forecast Annual and Cumulative (through 2028/2029) Demand Changes by Case

NOTES: This demand forecast is a compilation of the planning conducted by NWGA member-companies, including the integrated resource plans each natural gas utility is required to file with their respective state/provincial regulator. Low and high demand cases are driven by various economic and policy factors, including growth, commodity cost, cost of carbon, etc.

Figure 2. Expected Case Forecast by Economic Sector

NOTES: Residential, commercial, and industrial demand for natural gas is expected to grow at a slightly slower pace than forecast in last year’s Outlook, while generation demand is anticipated to grow at a slightly greater rate. The forecast step increase in gas demand for generation shown in 2021-2022 coincides with the retirement of several coal-fired generation units currently serving the region, including Boardman in Oregon (end of 2020), Centralia Boiler 1 in Washington (end of 2020), and Colstrip Units 1 & 2 in Montana (mid-2022). This forecast demonstrates the expectation that natural gas will play an increasingly important role in maintaining system reliability and affordability as policymakers drive the region toward a cleaner energy future.

Figure 3: Declining Per Capita Consumption in Residential and Commercial Sectors

NOTES: While the number of residential and commercial natural gas consumers in our region has grown 124 percent since 1990, per capita usage of natural gas has dropped 32 percent due to energy efficiency efforts, including more efficient gas appliances.

Figure 4: Peak and Average Day Demand Forecast

NOTES: The Pacific Northwest uses the least amount of gas during May. The gas used to generate electricity for air conditioning typically ramps up in June before tailing off during the fall. January is the month during which our region typically uses the most gas to heat space and water for homes and businesses.

Natural gas utilities design their systems to serve demand on the coldest day likely to occur in the territories they serve. Figure 4 illustrates that demand for natural gas on those days can nearly double the demand experienced during an average winter day. While each company approaches its planning standard a little differently, “peak” or “design,” days are typically based on actual 24-hour average temperatures recorded at representative locations.

Click here to review the data table in Appendix A of the 2020 Outlook.

The Value of Natural Gas in the Pacific Northwest: Emissions

In this week’s blog, we focus on natural gas and greenhouse gas emissions.

Gaining a better understanding of greenhouse emissions released from natural gas production and delivery systems helps clarify how the proper deployment of natural gas can deliver significant environmental benefits. Join us in taking a closer look at the numbers.

Industry-wide Natural Gas Emissions are Low and Declining

The U.S. Environmental Protection Agency (EPA) made further updates to its estimates of methane emissions in its Inventory of U.S. Greenhouse Gas (GHG) Emissions and Sinks: 1990–2018 (“Inventory”), released in April 2020. The Inventory incorporates new data available from studies on emissions as well as the EPA’s own Greenhouse Gas Reporting Program (GHGRP).

The Inventory found that industry-wide methane emissions¹ as a rate of natural gas production were 1 percent. The ratio of methane emissions per unit of natural gas produced has declined continuously during the past several decades, dropping 48 percent since 1990.

U.S. Methane Emissions per Mcf of Gas Produced ²

The inventory also confirmed that natural gas distribution systems have a small emissions footprint that continues to decline. Distribution systems emit less than 0.1 percent of produced natural gas annually, a decline of 73 percent from 1990 to 2017 even as U.S. natural gas utility companies added more than 730,000 miles of pipeline to serve 19 million more customers,
increases of 50 and 36 percent respectively, and natural gas production increased by 50 percent.

The bottom line: New control technologies, replacement of old cast iron and bare steel pipes, and better industry practices have contributed to significant emissions reductions, even as annual natural gas production and consumption have hit record highs.

U.S. Methane Emissions from Natural Gas Distribution Systems

Regionally, Emissions are Already Lower and Expected to Decline Even Faster

In the basins from which the Pacific Northwest sources most of its natural gas, policymakers and regulators have taken action to further decrease methane emissions from upstream operations. Effective January 2020 in BC, the source of about two-thirds of our region’s natural gas, the BC Oil and Gas Commission (BC OGC) has committed to reduce methane emissions from upstream oil and gas operations by 45 percent by 2025 relative to 2014 levels, targeting everything from compressor seals to storage tanks. The BC approach is expected to reduce methane emissions by 10.9 megatonnes (10.9 million metric tons) of CO2 equivalent over a 10-year period, the equivalent of taking 390,000 cars off the road each year.³ In addition, BC’s natural gas transmission sector is expected to reduce its emissions by 40 to 45 percent below 2012 levels by 2050 under the Canadian federal Methane Regulation, which also came into force in January 2020. Like the BC OGC, the federal Methane Regulation is focused on reducing emissions from fugitives and venting.

In 2014, Colorado (which provides much of our region’s Rockies’ gas, about one-third of our supply overall) approved the first methane regulations in the U.S. requiring energy companies to reduce methane emissions from oil and natural gas operations by routinely checking their oil and natural gas wells—both new and existing—statewide, and immediately addressing any leaks. The regulations go beyond those of the EPA, which apply only to new or modified operations, according to the Environmental Defense Fund, which helped craft Colorado’s regulations.

Where does the PNW get it’s natural gas?

By 2016, field surveys of oil and gas equipment by the Colorado Department of Public Health and Environment (CDPHE) found a 75 percent drop in the number of sites where methane leaks were detected compared to similar surveys conducted prior to the regulations taking effect, said Will Allison, former director of the department’s Air Pollution Control Division. By 2018, Garry Kaufman, the division’s new director, said, “Colorado’s program has reduced emissions of methane and volatile organic compounds from the oil and gas sector by hundreds of thousands of tons per year, while still allowing for growth in this important economic resource for Colorado.”

As a result, gas pipelines serving the Northwest have the lowest methane emissions on the continent and will continue to improve.

Regional Natural Gas Emissions are Small Relative to Other Sectors

Overall, direct use of natural gas for space and water heating in homes and commercial buildings in the Pacific Northwest accounts for just eight percent of total regional GHG emissions (see pie chart). The transportation sector (trucking, fleets, personal vehicles, public transit, etc.) produces the largest share of regional emissions (42 percent). The “other” category in the chart includes agriculture, forest practices, waste streams (landfills, wastewater treatment), building heat from fuels other than natural gas, oil and gas extraction (BC only), and industrial emissions not related to natural gas combustion.

Sources: BC 2017 Inventory: BC Community Energy Emissions Inventory for Residential/Commercial Combustion of Natural Gas; Oregon 2017 GHG Inventory; Washington 2017 GHG Inventory; U.S. EIA State Carbon Dioxide Emissions Data for 2017 Residential/Commercial combustion of Natural Gas in OR/WA, October 2019.

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¹Industry-wide, or “lifecycle” emissions, as defined by the EPA, include natural gas field production, processing, transmission and storage, and distribution.

²Includes methane emissions from petroleum production based on the natural gas fraction of total energy content produced from oil wells.

³For details from the BC Oil and Gas Commission, see https://www.bcogc.ca/public-zone/reducing-methane-emissions

The Value of Natural Gas in the Pacific Northwest: Prices

In today’s blog, we’ll discuss natural gas pricing.

The commodity cost of natural gas has plummeted with the surge in supply over the last decade (see Figure 1 below), saving Northwest consumers across all economic sectors hundreds of millions of dollars. Commodity prices are expected to remain below $4/Dth through 2050 (see Figure 2). High demand, coupled with infrastructure constraints, may periodically cause short-lived regional price volatility.

Figure 1. Historical Natural Gas Prices

Source: U.S. EIA Natural Gas Wellhead Prices at Henry Hub. (Henry Hub is a trading point in Louisiana that serves as a benchmark for North American natural gas pricing.)

 

Figure 2. Natural Gas Price Forecast Comparisons

NOTES: Price forecasts reflect the existence of and an ongoing expectation for robust natural gas supplies throughout the forecast period (2029) and beyond.

The Northwest Power and Conservation Council (NPCC) forecasts natural gas prices at trading hubs where the Pacific Northwest sources its gas: AECO and Sumas for natural gas originating in Alberta and British Columbia, and Opal for gas produced in the U.S. Rocky Mountain states of Colorado, Utah, and Wyoming.

The price of natural gas coming from the supply areas upon which the Pacific Northwest relies is typically lower than the North American benchmark at Henry Hub in Lousiana.

One of the primary reasons the Pacific Northwest has such an advantage in natural gas pricing relative to other parts of the U.S. is the region’s direct access to multiple production basins. In particular, the Pacific Northwest is the nearest market to the vast supply resources located in western Canada. When combined with an already well-developed and interconnected pipeline grid, gas shippers and utilities can quickly secure gas from the area with the lowest daily price and react quickly to re-route supplies when there have been disruptions.

Figure 3. Location of Natural Gas Trading Hubs in the Pacific Northwest

 

Check back on September 8 for The Value of Natural Gas in the Pacific Northwest: Emissions blog.

Natural Gas’s Reliability Can’t Be Beat

It has turned out to be a hot summer on the West Coast. In California, we’ve seen 3 million people lose power with rolling blackouts because the state didn’t have enough reliable energy available to fill the void when renewable energy production there fell off a cliff.

My heart goes out to those caught up in the blackouts. It’s a reminder to those of us in the Northwest, that we need to maintain a diverse energy system that uses all sources of energy for optimum reliability.

Natural gas is a critical part of that system. It is the cleanest fossil fuel and provides reliable and affordable energy whenever it’s needed. It is uniquely capable of generating electricity to power your air conditioner when the wind isn’t blowing, or the sun isn’t shining. And if the power is out, natural gas can be used to cook or heat water for your shower or laundry.

Not only does natural gas contribute to a clean energy future by supporting intermittent renewable resources like wind and solar energy, but it is becoming increasingly renewable itself.

Renewable natural gas (RNG) is methane produced when materials like wood, food, and other organic waste decompose. Instead of being released directly into the atmosphere the gas is captured and converted into a clean energy source. RNG is being advanced through partnerships with foresters, farmers, and local governments and Northwest utilities are bringing more of it into their energy mix.

For reliability and renewability, natural gas and renewable natural gas are sources of energy that are vital to the future and enjoy broad support. According to a recent poll, more than 70% of Pacific Northwesterners don’t want natural gas to be banned. They understand the need for reliable, affordable energy to address climate change.

We have to work together to achieve a sustainable energy future. Natural gas and renewable natural gas aren’t the only answer, but they are an essential part of the picture. It’s up to all of us to keep the momentum going so that no one has to endure blackouts tomorrow.

The Value of Natural Gas in the Pacific Northwest

The Value of Natural Gas in the Pacific Northwest

Natural gas is a crucial part of the Pacific Northwest’s energy mix providing heat and power to 10 million people and more than 300,000 businesses across the region. The direct use of natural gas for cooking, heating, and producing a variety of goods (e.g. toilet paper, cement, steel, glass, french fries, etc.) helps reduce global and regional emissions paving the way to a cleaner environment for future generations. In order improve the public’s understanding of the vital role of natural gas, the NWGA will produce a series of blogs to help readers understand how the natural gas industry works, how it differs from other energy sources, and how one size fits all policies affect energy choice and affordability for the region’s residents and the businesses many of them work for.

What does natural gas offer to the region?

  • Warmth and comfort to 10 million people
  • Efficient and affordable space heating, water heating, and heat for cooking and laundry (gas heat is about one-third the cost of electric heat in the Northwest)
  • More than half of the total energy consumed in the region – either used directly for space and water heat or in industrial processes or as gas-generated electricity. (Excludes transportation uses.)
  • A low carbon footprint – natural gas used for space and water heat in 3.2 million homes and more than 300,000 non-industrial businesses accounts for less than 10 percent of the region’s total carbon emissions, according to EIA data and state and provincial emissions inventories
  • 128,000 miles of installed pipeline infrastructure that safely and reliably delivers energy, supplemented by underground and above-ground storage facilities capable of delivering up to 40 percent of required energy during the coldest days
  • An invaluable input to some industrial processes for which there is no suitable substitute, including glass recycling and the manufacture of perlite (a common soil additive), steel and aluminum, paper products and food processing, among many others
  • An alternate fuel source for medium and heavy-duty vehicles is both more economical and cleaner than diesel engines.
  • Reliable 24/7 electricity production to replace retired coal plant generation and balance the region’s growing sources of intermittent renewable power, such as wind and solar

And our source of natural gas is increasingly renewable itself – market forces and government policy are driving the development of renewable natural gas, which transforms human and agricultural waste into useful energy. This provides even greater prospects for a cleaner mix of natural gas resources to contribute to our energy and environmental future.

Let’s start with some basics: where do we get our natural gas in the Pacific Northwest?

The Pacific Northwest’s natural gas comes from supply basins in Northern British Columbia and Alberta, Wyoming and Western Colorado, and Northwest New Mexico (the Western Canadian Sedimentary Basin, the Rocky Mountain Basin, and the San Juan Basin respectively). British Columbia and Alberta provide two-thirds of the region’s natural gas and Wyoming, Colorado, and New Mexico supply the remaining one-third. This gas is moved to British Columbia, Washington, Oregon, and Idaho by a network of inter-connected interstate pipelines.

The ability to draw gas supply from three areas provides consumers in the Pacific Northwest stability in pricing and reliability. For instance, a rupture in the Enbridge pipeline in British Columbia in 2018 impacted the ability to move Canadian gas south to the U.S., raising the price of Canadian gas. To compensate, Northwest gas utilities and gas shippers drew more from the San Juan Basin in New Mexico, which is very low-cost gas, thereby reducing the potential price impacts to consumers while the Enbridge pipeline was repaired and returned to service.

The inter-connected gas system in the Pacific Northwest also means the security of supply in the future. While U.S. Rocky Mountain and San Juan production is forecast to remain relatively flat through 2040, production in the Western Canadian Sedimentary Basin is projected to grow. This dynamic will help ensure continued access to a reliable and low-cost energy source.

BC Drives Projected 35% WCSB Production Growth from 2020-2040

Notes: WCSB production is forecast to decline for a few years, before growing to 21 Bcf/day by 2040 to meet expected rising demand for LNG exports. Most of that growth will come from the Montney formation that spans BC and Alberta.

Rocky Mountain Production Predicted to Remain Flat

Notes: As shown, Rockies’ production is generally flat through 2040. The San Juan Basin in northwest New Mexico is located below the Piceance play shown in the map above and is the southern terminus of the Williams NW Pipeline that serves the Pacific Northwest.

Compared to some areas of the United States and many countries, the Pacific Northwest is fortunate to have large nearby supply basins and a developed pipeline infrastructure to deliver gas safely and efficiently, and which can react to supply disruptions.

In our next segment, we’ll examine gas prices.

Grilling on the Fourth of July

According to a Hearth, Patio and Barbecue Association survey, 73 percent of Americans will spend their Fourth of July holiday cooking outdoors. And natural gas is by far the most popular type of grill with 64 percent saying that’s their preference over charcoal or electric. Grilling is simply synonymous with the holiday.

Whether you’re planning a backyard barbeque for two or 20, Americans celebrate our country’s birthday by coming together as family, friends, and neighbors over a deliciously grilled meal and fireworks overhead. After prepping those burgers, hot dogs, chicken, salmon, oysters, and veggies, with the touch of a button, your gas grill is ready, and the clean-burning natural gas means less smoke dampening the mood.

In the beautiful Pacific Northwest, summer is the best time for sitting comfortably with friends or family in the backyard on a cool evening, with a warm fire and dinner sizzling on the grill — it’s pure pleasure.

Please stay safe this Fourth of July and enjoy that natural gas grill all summer long. Here are some helpful grilling tips:

  • Place your grill at least 10 feet away from other objects, including the house, combustibles, and any shrubs or bushes.
  • Always stay by the grill when cooking.
  • Trim excess fat from meat and poultry to reduce grill flare-ups.
  • Use the appropriate temperature to cook food, using lower temperatures for smaller items or larger cuts of meat that will take a long time.
  • Place veggies on the edges of the grill to prevent overcooking.
  • Before lighting the grill, apply non-stick spray on the grates for easy cleanup.

Share your favorite grilling recipes by tagging @pepnorthwest and use the hashtags #GrillingWithGas and #CookingOutdoors.

By Scott Ongley, President of Northwest Hearth, Patio and Barbecue Association

Fueling Our Communities

Americans are seeing firsthand the critical role that energy plays in meeting their daily needs and how the natural gas industry is #FuelingOurCommunities. The industry keeps delivering essential energy to the homes that have become offices, schools, and gyms, and the manufacturing facilities that continue to produce food, supplies, and personal protective equipment. It continues to fuel the frontline facilities where healthcare professionals are fighting COVID-19 every day. Providing affordable energy will boost an economic recovery that we all hope is on the horizon.

DIGGING SAFELY THIS SPRING MORE IMPORTANT THAN EVER

April heralds the advent of spring, including warmer weather and sunshine in the Pacific Northwest. Spring means more construction as well as tending to and planting gardens and other vegetation. Both activities involve digging.

That is why April is National Safe Digging Month. Before digging a hole more than 12 inches deep for any purpose, it is critical to “know what’s below”. Here is a guest blog from NW Natural that includes a terrific checklist to use before digging, whether you are a contractor or a homeowner. Most importantly, always call 811 before you dig.

DIGGING SAFELY THIS SPRING MORE IMPORTANT THAN EVER

News Release from NW Natural
Posted on FlashAlert: April 15th, 2020 9:48 AM

With more people at home doing yard projects, NW Natural reminds customers and contractors to call before digging

PORTLAND, Ore. — April marks National Safe Digging Month, a time to remember to call 811 to have underground utility lines located before digging in your yard, garden and beyond. This spring, that reminder is even more important with so many people in the Northwest staying home to stay healthy and potentially doing more yardwork than normal.

“If you or a contractor will be digging in your yard, make sure you call 811 at least two days ahead of time. Locate crews are still working during this time and abiding by all COVID-19 safety recommendations,” said Scott Gallegos, NW Natural’s damage prevention supervisor. “It’s a free service, and it’s the law.”

Nationally, the most common cause of a natural gas pipeline damage is someone accidentally digging into the pipe. Accidentally hitting an underground utility line can interrupt service to entire neighborhoods and lead to serious injuries, fines and costly repairs.

A helpful checklist to get started:

  • Regardless of digging depth or familiarity with the property, make your request at least two business days before you plan to dig.
  • Call 811 or use the free NW Natural Safety App.
  • When you call 811, the Oregon Utility Notification Center notifies local utility companies of the intent to dig. Then a professional locator visits the site to mark the location of underground utility lines. The OUNC says the contractors who come out to mark buried lines will follow COVID-19 health safety precautions.
  • Confirm with 811 that all lines have been marked.
  • Consider moving your project location if it’s near utility line markings.
  • If working with a contractor, confirm a call to 811 has been made. Don’t allow work to begin if lines aren’t marked.

If while you’re digging, you accidentally hit a gas line, report it immediately by calling 911 or NW Natural’s 24-hour emergency line at 800-882-3377. No damage is too small to report, even a small dent could weaken a natural gas line.

Always remember: Smell. Go. Let us know. If you smell natural gas, leave the area immediately, then call us at 800-882-3377 and we will come over to check things out. During COVID-19, NW Natural’s crews are following Centers for Disease Control (CDC) guidelines regarding social distancing, face covering and sanitizing protocols.

For more information, visit https://www.nwnatural.com/Residential/Safety/811CallBeforeYouDig.

2020 Gas Outlook Released

On April 16, Dan Kirschner will present the 2020 Gas Outlook on a live webinar. Register now by clicking here.

 

The Outlook continues to include current data and narrative on supply and prices, but more as background information because North American natural gas is projected to be an ample, low-priced commodity for the foreseeable future. However, the true value of the Outlook – aggregating and analyzing regional demand and delivery infrastructure data to inform policymakers and other stakeholders throughout the Northwest – remains the report’s core focus. Updated numbers and our forecast are presented in the Demand section and an expanded Capacity section, and in the appendices. We’ve also added two deeper dive articles exploring renewable natural gases and upstream methane emissions. The 2020 Gas Outlook is now available by clicking here.

 

POSTPONED- Annual Energy Conference

The NWGA and AWEC have postponed the 17th Annual Energy Conference to November 4-5, 2020 at the Skamania Lodge in Stevenson, WA. Originally scheduled for June 3-4, we made the difficult decision to postpone the event due to the Coronavirus pandemic. If you previously made a reservation at the Skamania Lodge it has been canceled. We will notify you when you are able to reserve a room in the new room block. *** Note: Skamania Lodge is closed for the next 60 days. ***

We remain grateful to all of our sponsors for their continued support of the Annual Energy Conference, including our dedicated Platinum sponsors BP/IGI Resources and Calpine Energy Solutions; gold sponsor United Energy Trading, LLC; silver sponsors Cost Management Services, Davison Van Cleve, NIPPC, Stoel Rives, and bronze sponsor Cable Huston. If you are interested in joining our sponsors, click here to find out more.

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