It's going to take more than colder-than-normal temperatures and record-setting demand days to knock out the U.S. natural gas industry, the Natural Gas Council (NGC) said Thursday.
NGC found that despite the never-ending winter of 2013-2014, the gas industry proved reliable. NGC is made of up members of the American Gas Association (AGA), America's Natural Gas Alliance (ANGA), the Independent Petroleum Association of America (IPAA), the Interstate Natural Gas Association of America (INGAA) and the Natural Gas Supply Association (NGSA).
"One lesson we learned from this record-breaking cold winter is that the resource is there to meet growing demand if the investment is there to get it to market," ANGA CEO Marty Durbin said. "Natural gas prices on the Henry Hub stayed relatively low in comparison to past extreme weather events because we now have so much natural gas from geographically diverse regions of the country."
The National Climatic Data Center reported that continental U.S. energy demand for this past winter was 27% higher on average. Seven states in the Midwest experienced a "top 10" cold winter. Weather-driven residential and commercial demand exceeded 65 Bcf/d for eight days in January alone.
Because freezing temperatures frequently covered large portions of the United States at one time, the cold weather placed "exponentially greater pressure on peak-day demand for natural gas, with little recovery time between cold spells," NGC said.
"The shale technology revolution has made record amounts of natural gas available to the domestic market," said IPAA CEO Barry Russell. "For the first time in 25 years, we are producing more than 94% of the nation's natural gas from resources here at home. Even during one of the nation’s coldest winters, this abundance has created a dependable, domestic supply of fuel for American households, electric power generation, as well as growing industrial and transportation markets."
The gas industry "was put to the test and rallied to ensure supply for firm pipeline customers and help non-firm customers make last-minute arrangements for supply to the extent possible," NGSA CEO Dena Wiggins said. "Although citygate prices increased in the coldest regions, where pipeline capacity constraint is prevalent, wholesale price increases at Henry Hub were muted compared with pre-shale gas cold spells.
"And a glance at the forward price strip shows natural gas priced below $5.00 as far out as 2017, reflecting the market's confidence in the ability of the industry to meet future demand."
The interstate natural gas pipeline system performed even under "extraordinarily challenging conditions," said INGAA CEO Don Santa. "However, this winter highlighted the costs to natural gas and electric consumers that can result from pipeline capacity constraints and the need for additional pipeline infrastructure in certain regions, such as New England."
The U.S. gas network's ability to tough it out on the coldest and highest-demand days has demonstrated its "readiness and resiliency," said AGA CEO Dave McCurdy.
"Natural gas utilities work all year to prepare for these types of cold temperatures and employ a portfolio approach to help ensure they can meet the needs of their customers at affordable prices. Providing this kind of safe and reliable service has been not just the core business, but the mission of natural gas utilities for decades."