Top officials at several U.S. retail gas companies reveal how they are rethinking their business models and developing new approaches to serve customers in the face of supply concerns and price...
Clear Skies for Gas
Unconventional sources brighten the U.S. supply outlook.
311 GW of coal-fired steam-electric capacity to natural-gas-fired combined-cycle capacity at a 70 percent annual operating factor would require 11.7 Tcf/year of natural gas. Adding the increase in gas requirements for the projected gas-fired combined-cycle power generation of 4.6 Tcf/year to the 11.7 Tcf/year for conversion of coal-fired steam-electric capacity, less the already projected increase in gas-fired power generation of 3.0 Tcf/year, would add 13.3 Tcf to 2025 projected gas requirements of 31.33 Tcf, or a total of 44.6 Tcf, an unrealizable level at the current outlook. This is based on the 2004 reference case of the Annual Energy Outlook . Using similar calculations for the 2005 and 2006 Annual Energy Outlook gives values of gas requirements of 41.8 Tcf in 2025 and 39.3 Tcf in 2030, respectively, again not realizable at current projections for gas supply. In these projections it is puzzling why the EIA in its 2004, 2005, 2006, 2007 and 2008 Annual Energy Outlooks projects no significant increases in dry natural gas production levels by 2025 (and 2030 for the 2007 and 2008 Outlooks ) in spite of all recent evidence that unconventional natural gas supply prospects are likely to result in substantial increases. Thus, top priorities for U.S. energy policy should be to improve EIA’s forecasting techniques, to provide incentives for increasing domestic natural gas production to at least 25 Tcf/year by 2025-2030, to reduce the many barriers to increasing the importation of pipeline gas from Canada and Mexico and of LNG, and to accelerate the construction of the Alaska pipeline to the lower 48 States.
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4. U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2006 Annual Report, Advance Summary , Energy Information Administration, Office of Oil and Gas, U.S. Department of Energy.
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6. “SPE: Industry cites unconventional resources potential,” Oil and Gas Journal , Oct. 6, 2008, pp. 34-35.
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8. “Natural Gas Vehicles Gaining on Diesel in the Well-to Wheels Test,” Natural Gas Week , Aug. 11, 2008, pp. 1, 14-15.
9. “NGVs Pick Up Bi-Partisan Support in Congress; Bills Before Committee,” Natural Gas Week , Aug. 18, 2008, pp. 1,14-15.
10. Annual Energy Outlook 2008 With Projections to 2030