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WA Citizens Committee on Pipeline Safety
March 13, 2014
Natural Gas Market Outlook
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1914 Willamette Falls Dr., #255
West Linn, OR 97068
(503) 344-6637
www.nwga.org
NWGA Members:
Avista Corporation
Cascade Natural Gas Co.
FortisBC Energy
Intermountain Gas Co.
NW Natural
Puget Sound Energy
Kinder Morgan Ruby Pipeline
Spectra Energy Transmission
TransCanada GTN System
Williams NW Pipeline
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Conventional vs. Horizontal Drilling
Traditional Wells
Horizontal Drilling
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Gas From Shale Has Profound Impact
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Total Resource Estimates Increase
856 854 881 921 897 936 958 950 955 1,057 1,052
1,153
147 147 147 146 141 155 169 169 166 163 159
158
616 687
1,073
0
500
1,000
1,500
2,000
2,500
3,000
Trill
ion
Cu
bic
Fe
et
Traditional Coalbed Shale
Shale resource not assessed separately
2,384
1,119 1,003 ~200
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Shale Dominates North American
Production
Source: Navigant Consulting, Fall 2012 Gas Market Outlook
-10
10
30
50
70
90
110
130
Bcfd
Shale Non-Shale Net LNG Imports
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Price Not Quantity is the Issue
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How Much Is 900 Tcf?
0
200
400
600
800
1000
1200
1400
1600
1800
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
20
36
20
38
20
40
20
42
20
44
20
46
20
48
20
50
20
52
Cu
mu
lati
ve G
as C
on
sum
pti
on
, Tc
f
North America Supply and Demand
With LNG Exports*
Canada Cumulative Consumption
US Cumulative Consumption
Supply Available at $5.00 or less
Supply Available at $4.00 or less
Source: US Energy Information Administration, Canada National Energy Board
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“The Learning Curve”(source: EIA Annual Energy
Outlook)
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Price Effect
$0
$2
$4
$6
$8
$10
$12
$14
Jan
-20
08
Ap
r-2
00
8
Jul-
20
08
Oct
-20
08
Jan
-20
09
Ap
r-2
00
9
Jul-
20
09
Oct
-20
09
Jan
-20
10
Ap
r-2
01
0
Jul-
20
10
Oct
-20
10
Jan
-20
11
Ap
r-2
01
1
Jul-
20
11
Oct
-20
11
Jan
-20
12
Ap
r-2
01
2
Jul-
20
12
Oct
-20
12
Jan
-20
13
Ap
r-2
01
3
Jul-
20
13
Oct
-20
13
Jan
-20
14
Ap
r-2
01
4
Jul-
20
14
Oct
-20
14
Jan
-20
15
Ap
r-2
01
5
Jul-
20
15
Oct
-20
15
Jan
-20
16
Ap
r-2
01
6
Jul-
20
16
Oct
-20
16
$/D
th
Historic HH Spot NYMEX Futures
Source: U.S. EIA, NYMEX
NYMEX: 03/10/2014
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Price Forecasts
Source: EIA 2014 Annual Energy Outlook Early Release –
December 2013
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
12
$/D
th
Historic HH Spot Price
EIA 2014 AEO (ER) HH Forecast
NW Power & Conservation Council HH Forecast
NWPCC AECO Forecast
NWPCC Sumas Forecast
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Recent Gas Demand
0
100
200
300
400
500
600
700
800
900
1,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014*
Mil
lio
n D
th
PNW Gas Deliveries (source: US EIA, StatCan)
Residential Commercial Industrial Generation
* 2014 Outlook Year 1 Forecast
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2014 Outlook Forecast
120
140
160
180
200
220
240
260
280M
illio
n D
th/y
ear
Residential Commercial Industrial Power Generation
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Replace Existing Resources
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Support Renewable Resources
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Natural Gas Use Is Versatile
Plastics
Panty hose
Paints
Photographic film
Beer
Safety glass laminate
Adhesives
Solvents
Carpeting
Insulation
Refrigerants
Windshield washer fluid
Particle board
Pigments and dyes
Frozen french fries
Pool liners
Food Packaging
Metals and recycling
Glass and recycling
Bricks
Lumber
Paper
Cardboard
Fertilizer
Antifreeze
Medicines
Aircraft parts
Chewing gum
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US Natural Gas and Crude Oil Prices
Source: EIA Monthly Spot Prices through October, 2013
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Natural Gas Transportation
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Accelerated Demand Scenarios
500
550
600
650
700
750
800
850
900
950
1,000
1,050
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23
Mill
ion
De
cath
erm
s
Annual Demand - Expected Case Accelerated Industrial Accelerated Generation
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Capacity
Projects
20
Pipelines • Southern Crossing Expansion
• Palomar
• Sunstone
• Blue Bridge (N-MAX)
• Ruby
• Pacific Connector
• Pacific Trail
• Oregon LNG
• Washington Expansion
LNG Terminals
Kitimat LNG
Bradwood Landing
Oregon LNG
Jordan Cove LNG
Storage Facilities
Mist
Jackson Prairie
Oregon LNG Bradwood Landing LNG
Jordan Cove LNG
Kitimat LNG
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Questions?
Dan Kirschner, Executive Director
Northwest Gas Association
(503) 344-6637