NGI The Weekly Gas Market Report / NGI All News Access

NE Gas Distributors Confident About Supply this Winter

NE Gas Distributors Confident About Supply this Winter

The coming winter season should have little effect on the natural gas supplies in New England, which, according to one official, now has the "best supply portfolio" ever.

Thomas M. Kiley, president of the New England Gas Association, said there were no warnings of gas shortages this winter at the forum held last week in Boston among federal and state and regional officials. Natural gas prices will be high as expected, he said, but there will be "plenty" of supply.

"The gas industry is allied and aligned," said Kiley, who reported that both his association and the American Gas Association expect a reliable supply of natural gas in New England through the winter months, regardless of the temperature. He said that oil supplies may be somewhat constrained, however.

New England's natural gas supply, which represents about 18% of the primary energy consumption source in the region, is larger and more diverse than ever. The natural gas infrastructure system serving the region has grown by 25% since early 1999, with two new pipelines from Canada (Maritimes & Northeast and Portland Natural Gas Transmission) and a significant new supply of liquefied natural gas from the Caribbean (Trinidad), bringing additional capacity and supply sources. In addition, the local utilities say they are on target to meet their storage requirement levels in advance of the winter heating season.

The telltale signs of adequate supply are in place: most of New England's natural gas supplies come from U.S. supply regions, according to the New England Gas Association. Imports are playing an increasing role, though, rising from 11% of regional supply in 1988 to about 45% 10 years later. The main trading partner is Canada, which provided 39% of the region's gas supply then.

New England now has more than 33,000 miles of pipeline and main: transmission accounts for 1,777 miles and distribution accounts for 31,410 miles. Daily pipeline capacity at the end of 1999 totaled 3,152 MMcf/d, an increase of 13.5% from a year earlier. The capacity reflected expansions by existing systems --- Algonquin, Tennessee, Iroquois, Vermont --- and the new pipeline systems.

Despite the strong infrastructure, the region is still expected to be in the same position as the rest of the country, with prices for energy commodities projected to be much higher than normal, reflecting what Kiley referred to as "national energy commodity market volatility." For customers using natural gas in their homes in New England, the higher price is estimated to result in an increase of 10%-20% in their bills on average this winter.

The forum, which included speakers from regional and national associations, was presented by the New England Council and the New England Governors' Conference. A full report is expected soon.

The conference was called in response to a recent prediction by the U.S. Department of Energy that with a "normal" heating season, natural gas prices likely will increase by as much as 50% this winter. Similar predictions have been made about the cost of heating oil.

Carolyn Davis, Houston

©Copyright 2000 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus