New pipeline development and expansions could add 16 Bcf/d ofcapacity to the national transmission network over the next twoyears (1999-2000) at an estimated cost of about $9.5 billion,according to a report by the Energy Information Administration.While all of the proposed projects may not be built, totalexpenditures are expected to far exceed the $5.1 billion investedduring the last major period of pipeline development in 1992-1993.

Since dipping in 1994, investment in additional pipelinecapacity has increased each year and could reach $6 billion in2000. A major portion of the new investment is designed to increaseaccess to Canadian gas, according to the EIA’s analysis, which istitled “Natural Gas Pipeline Network: Changing and Growing.” Thereport is to be included in EIA’s upcoming “Natural Gas 1998:Issues and Trends,” which is expected to be released in February.

While more than 11 Bcf/d of capacity was added to thetransmission network in 1998, total costs were relatively low, at$2.9 billion, compared with projected spending of $3.1 billion in1999 and $6.3 billion in 2000, EIA said. Although the amount of newcapacity slated to be added during each of those years, 8.2 and 7.8Bcf/d, respectively, would be less than the amount added in 1998,the investment will be greater because several major new andexpensive long-distance pipeline systems, such as the Alliance,Independence, Tri-State, and Vector pipeline systems, are scheduledto be constructed during the period. Most of the capacity added in1998 was less expensive expansions and upgrades.

Supporting this expansive pipeline growth, in large part, is thegrowing demand for natural gas to generate electricity, EIA noted.Growing environmental concerns have spurred the construction ofgas-fired generating to replace coal- and oil-fired plants in manysections of the country. Since 1990, gas use for power generationhas grown at an annual rate of 17% in the Midwest and about 9% inthe Southeast. Although natural gas use for electric generationgrew by less than 1% per year in the Southwest, it still accountsfor more than 22% of all gas consumed in the region. That is thelargest regional use of gas for electric generation in the nation.

For copies see EIA’s web site at

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