NITROGEN-OXIDE EMISSION LIMITS. Denying an appeal by electric utilities and industry groups against rules proposed by the U.S. Environmental Protection Agency for emission limits...
Mexico. Mexico has a sizeable natural gas resource base. Yet, exports to Mexico, while not large, have increased significantly from 100 Bcf in 2000 to an annualized rate of 250 Bcf today. Increased goodwill between Mexico and the United States and cooperation between energy agencies in both countries could result in a changed picture for export/import markets between the United States, Canada and Mexico. Yet, the Federal Energy Regulatory Commission has approved 729 MMcf/day of additional export pipe capacity to Mexico for installation in 2003. Despite tight supplies in the United States, exports to Mexico in 2003 are likely to grow from their level in 2002.
LNG: Not Yet a Contender
Canadian imports currently amount to between 10 to 11 Bcf/day. In contrast, LNG is contributing about 700 MMcf/day to our domestic markets and is expected to contribute several hundred cubic feet more this year. 5
There are now four active import marine terminals in the United States. They all have plans for expansions of capacity and deliverability by 2005. There are also proposals for about 20 new LNG import facilities that could serve the United States.
The largest existing facility is the Lake Charles terminal in the heart of the natural gas-producing area of the United States. It has a capacity of 6.3 Bcf, with additional capacity of 3 Bcf planned by 2005 and peak sendout deliverability of 1 Bcf/day. Additional deliverability of 570 MMcf/day is planned by 2005.
Yet, despite impressive import facilities, LNG capability is difficult to estimate. For the major marine terminal facilities, full capability involves the coordination of the choice between spot or fixed-price forward contracts, the arrangement of international transport by ship, regasification, and delivery by pipe on domestic shores. Deutsche Bank estimated in its May 2, 2003, report on LNG that full-year baseload capacity for LNG by 2002 represented potentially 4.4 percent of U.S. gas demand.
If existing capacity is more fully utilized and additional shipments of LNG are possible, this may put some downward pressure on price this year. Going forward, LNG's contribution to domestic supplies bears watching.
Rockies: Late to the Game
According to Energy Information Administration statistics, Wyoming dry natural gas proved reserves were 10.88 trillion cubic feet (Tcf) at the end of 1994 and 18.4 Tcf at the end of 2001, the most recent data available. 6 Moreover, a recent study by the Department of Interior found that 63 percent of the natural gas resource base in the major basins of the Rockies is accessible under current lease arrangements. 7
The price of natural gas in the Rockies is often several dollars less than the cost of natural gas in Louisiana and Texas, the major sources of domestic natural gas supplies. In short, robust supplies in that part of the country are seeking a market.
Although pipeline expansions out of the Rockies continue to be announced, the time from filing to completion is several years. Additional Rockies gas will not be available this year to reduce any tightness of supplies east of the Rockies. It appears that the industry or the