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AGA report signals new era for natural gas

LNG Industry,

According to a report released by the American Gas Association (AGA), the natural gas delivery system in the US achieved historic levels of performance over the winter.

More natural gas was delivered through more pipelines to more customers than ever before, and customer bills remained affordable. The AGA study, Promise Delivered, details the planning, preparation and performance of the natural gas system during the 2013-14 Winter Heating Season.

Prepare for extreme temperatures

Commenting on the achievement, AGA Chairman, Gregg Kantor, stated: “America’s natural gas utilities prepare every year, knowing that the eventuality of an extraordinary winter may be just around the corner. That event clearly materialised during the 2013-14 winter heating season.

“Utilities plan all year for the possibility of extreme temperatures and employ a portfolio approach to gas purchasing and storage utilisation, with the idea of meeting customer requirements affordably even on the coldest days of the year. Before last year’s extraordinary winter concluded, LDCs were already preparing for the next winter cycle. Reliable performance is what our customers have come to expect from us, and you can’t get there without this level of planning and preparation.”

The US faced extreme temperatures and record-setting natural gas consumption during the 2013-2014 winter heating season (November 2013 through March 2014). This past winter also saw the top five days for natural gas consumption for the country as a whole.

Record natural gas consumption

On 7 January 2014, the US set the single day record for natural gas consumption at 139 billion ft3 - almost double the daily average. Families used more natural gas in heating, and power generators utilised unprecedented volumes of gas to maintain electric system reliability. In addition, industrial demand of natural gas surged, as well as exports to Mexico were consistent.

Despite these record conditions, residential customer bills increased only 10% on average from the prior winter, an increase mostly due to higher consumption. AGA expects relatively warmer temperatures this coming winter based on information from the climate Prediction Center, which may lead to a reduction in demand. Natural gas prices are likely to be slightly higher, resulting in an increase in customer bills of about seven percent this winter.

‘New bar has been set’

AGA President and CEO, Dave McCurdy added: “A new bar has been set. Our nation has an incredible abundance of natural gas and a pipeline network that is the safest energy delivery system in the nation. As more homes and businesses continue to rely on natural gas, and we see increased and strategic use of American natural gas across all sectors, we are confident that utilities will continue their record of reliability, delivering clean and affordable energy.”

The United States now produces approximately 14 billion ft3 more today on a daily basis than in 2002-03, a similarly cold winter in the US, and natural gas reserves have also grown by almost 63% in the past ten years. In addition, natural gas working storage capacity has increased by more than 18% in the same period, as utilities and others have added storage capacity by building, or have contracted for sufficient volumes in order to assure storage was available when it was needed most. This growth has been accompanied by increased efficiency as residential and commercial sector use per customer has declined by 25% from 2003 levels. More than 177 million Americans use natural gas, and the nation’s pipeline network has expanded more than 11% compared to ten years ago.

Storage inventories remain solid

Further examination of critical storage inventories shows that working gas injections have remained solid with national inventories at 2.9 trillion ft3 for the week ending September 12, according to the Energy Information Administration (EIA).

McCurdy concluded: “This winter was not only a validation of years of efforts by utilities, pipelines, producers and regulators, it was a signal that continued investments, planning and analyses are prudent and necessary as we begin to understand this era of resource abundance and accompanying opportunities for our economy.

“We expect the trend of greater demand to continue, and it will be accompanied by substantial growth in domestic natural gas supplies and increased infrastructure development to deliver this gas to more customers. This supply-demand balance lends itself to continued market stability, thereby creating more opportunities for natural gas in our nation.”

Adapted from press release by Katie Woodward

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