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Natural Gas For Industrial Users in 2004 “The Tipping Point?”

Natural Gas For Industrial Users in 2004 “The Tipping Point?”. Alexander E. Strawn, Jr. Chairman Process Gas Consumers Group October 27, 2004. Process Gas Consumers Group. Broad Cross Section of U.S Industrial Companies Using Gas in Operations

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Natural Gas For Industrial Users in 2004 “The Tipping Point?”

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  1. Natural Gas For Industrial Users in 2004“The Tipping Point?” Alexander E. Strawn, Jr. Chairman Process Gas Consumers Group October 27, 2004

  2. Process Gas Consumers Group • Broad Cross Section of U.S Industrial Companies Using Gas in Operations • Works to Promote Coordinated, Rational and Consistent Federal & State Policies Relating to Natural Gas & Its Transport

  3. PGC Advocacy • Natural Gas Policies That Promote: -Competition and free market principles -Open Access to Pipeline Transport -Equitable Responsible / Regulation -Unbundled Rates -Rapid Approval of Interstate Projects

  4. PGC Focus Issues:F.E.R.C. / Regulatory • Interchangeability / Gas Quality • Surcharge Evaluation / Intervention • Pipeline Rate Case Activity • Shipper Creditworthiness • Access To Gas Supply

  5. Where are Industrials today? • Prices at record levels--yet again • Industrial Demand seems to be returning…but slowly • No real substitutes for natural gas • Global demand ruling the markets • Gas infrastructure needs are critical • Weather effects are highly influential

  6. Industrial Reaction To Gas Price Spiral • New Project / Expansion Delays • Energy Substitution • Hedging Strategies • Energy Conservation / Efficiency • Renewable Energy Options • Unconventional Sourcing • Offshore Production Options • Price Increases

  7. Fuel Substitution Capability • Public information presents optimistic view on fuel switching capability • Fuel switching inhibited by local siting restrictions and State/Federal air standards, multiple examples cited by range of industries 26%* Natural Gas and Oil-Based Industrial Consumption 5-10% 1995 Today *EIA/Dept. of Commerce MECS Survey

  8. Natural Gas Future:Over the Edge or Near The Horizon? • Oil Tankers Booked To Capacity • East China Sea Gas Field Dispute • Seasoned Coal Workers Retiring • Demand For LNG Spot Cargo • Asian Energy Demand • Quebec City- LNG Safety Concerns

  9. The “New Rules” of the Gas Market • $7.00 / MMBTU is a great price!!!! (?) • LNG is no longer marginal supply • Full storage is a given….who cares? • China is now on the table!!! • Global Warming is NOT a Strategy!!!!

  10. Direction For Success • Increase The Total Supply of Gas !!!!!! • Advocacy For LNG Expansion • Responsible Access To New Areas • Conservation of Existing Resources • Alternative Energy Development • Pipeline Infrastructure Focus

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