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Trends in the North American Natural Gas Market

Trends in the North American Natural Gas Market. GCAGS Annual Meeting November 1, 2002. Donald A. Juckett Office of Fossil Energy U.S. Department of Energy. North American Trends in Natural Gas. Background – Historical demand and consuming sectors Scope – Forecast for demand increase

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Trends in the North American Natural Gas Market

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  1. Trends in the North American Natural Gas Market GCAGS Annual Meeting November 1, 2002 Donald A. Juckett Office of Fossil Energy U.S. Department of Energy

  2. North American Trends in Natural Gas • Background – • Historical demand and consuming sectors • Scope – • Forecast for demand increase • Sector growth • Future supply • Issues and opportunities • Technology impacts

  3. U.S. Gas Consumption & Past Drivers Effect of wellhead price caps (Phillips ’54) Natural Gas Act ’38 (Great Depression) Post-war pipelines: Large fields+welding+ econ. growth NGPA ’78 (& gas bubble) FERC 436,636 (econ growth)

  4. Natural Gas Has an Increasing Role in the U.S. Fuel Mix (EIA Annual Energy Outlook 2002)

  5. Gas-Fired Powergen – Recent Additions

  6. Powergen Is Driving Rising U.S. Gas Use More than half of the increased gas demand in 2020 is for the power sector (EIA Annual Energy Outlook 2002)

  7. Future Supply • Historical Production Areas • Deep Offshore • Alaska • Canadian Imports • Liquefied Natural Gas (LNG)

  8. Historical Producing Areas • Access issues • Increased depletion rates • Pace of technology • Deep water • Infrastructure • Security • Reserve additions remain strong – • 2001 Reserves rose to 183.5 TCF

  9. ALASKA NATURAL GAS INTERAGENCY TEAM

  10. Alaska • Proved resources – 30-35 TCF Prudhoe Bay • Prospective • 70 – 100 TCF - Prudhoe Bay • 59.7 TCF - NPRA (39 –83 TCF) USGS • ANWR • Energy Legislation – Pipeline - Status • Canadian response • Cost analysis – Company team

  11. Japan Natural Gas Imports & Exports, 2001 (Billion Cubic Feet) Australia Algeria 65 2 Nigeria LNG 66 38 158 Qatar Oman 3763 23 12 LNG 10 Trinidad and Tobago 238 140 98

  12. Canada • Western Basin/McKenzie (inc. CBM) • OCS Maritimes • Canada “first” • Trade related concerns • Resource Assessment uncertainties

  13. U.S. LNG imports have grown rapidly in recent years, even when compared to growing global trade.

  14. LNG Is a Growing Part of U.S. Imports • LNG imports more than doubled between 1998 and 2000 (from 85 Bcf to 224 Bcf) and are expected to continue growing. • LNG imports can play a significant role on a regional basis. Source: EIA, www.eia.doe.gov

  15. Existing and Proposed New Terminals Boston, MA United States Cove Point, MD United States Savannah, GA United States Lake Charles, LA United States Proposed Terminal Existing Terminal

  16. So What? • NPC update – 1992 and 1999 Natural Gas Study • EIA about to issue new Long Term Outlook • FERC engaging on series of regulatory issues • Federal Agencies – MOU on expediting pipeline permits • Alaska Task Force • Federal role in technology development • EPCA – Federal Lands Resource Assessment

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