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 yesterday 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 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.

Prices for energy commodities are projected to be much higher than normal, however, 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.

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