With a Pacific Northwest native and current FERC commissioner, Philip Moeller, endorsing the need for a liquefied natural gas (LNG) facility, two other regional gas advocates made the case for bringing added gas supplies into the region, while pointing out that current depressed wholesale prices in North America, not the global financial crisis, are the current impediment to new supplies from both pipelines and LNG imports.

The officials spoke Friday in Seattle at the second day of the Law Seminars International conference on “Buying and Selling Electric Power in the West.”

With its limited options for gas supplies, consumers in the Northwest pay a premium of close to $1/Mcf, according to TransCanada’s Leslie Ferron-Jones and Energy Action Northwest’s Ed Finklea. “Even if we hit all of our renewable targets for the short and longer term, natural gas is critical here,” said Ferron-Jones, who is based in Portland, OR, as is gas industry advocate, Finklea. “There is plenty of gas out there. We’re flush with gas worldwide.

“Producers are not laying down wells because they can’t get the money to drill, they are doing it because the price is too low and there’s too much gas on the market,” Ferron-Jones said. “There is a glut. Things can change very quickly, and ultimately there are a lot of resources in the ground, but a ton of resources in the world. It is a question of a what pace [rate of production] and at what price it comes out of the ground.”

Noting that on a proved basis, North America has about a six-year supply of natural gas, and on an unproven basis about 44 years, Ferron-Jones said worldwide on a proved and unproven basis there is about 80 years supply, assuming about a 1% annual demand increase. “There is quite a lot of the resource, it is just a question of what is the infrastructure that is going to tap into it.”

In the Northwest, where there has been a steady increase in the amount of gas used for electric generation in the past decade, the gas industry doesn’t want to be an alternative to renewables, it wants to be “married to renewables,” said Finklea, whose group last year was renamed from the Northwest Gas Association to Energy Action Northwest. “Wind with gas backup is the perfect marriage.”

The quick-start and stop capability of gas-fired generators make gas the “perfect partner” for wind, said Finklea, who is an unabashed advocate for at least one LNG receiving terminal in the region. He was very pleased by the Federal Energy Regulatory Commission (FERC) action Thursday reaffirming its conditioned approval of the Bradwood Landing LNG project along the Columbia River in Oregon (see Daily GPI, Jan. 16).

LNG imports will help in the long-term the Northwest’s efforts at carbon mitigation and eliminating the competitive disadvantage the region now has by paying a premium for its gas supplies.

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