# Presentation: 190466

## Exploring Pipeline Dynamics to Connect New Markets

**Damien Gaul**
**Industry Economist**
**Office of Oil and Gas**
**Energy Information Administration**
**Damien.Gaul@eia.doe.gov**
**2****nd**** North America Pipelines Conference**
**Calgary, Alberta**
**February 19, 2009**

- Energy Information Administration

*Official Energy Statistics from the U.S. Government*

## Agenda

**I. A Look at Supply Development –**
**Unconventional Supplies Increase**
**Gas Shales in the United States**
**Changes in Production**
**II. Pipeline Developments**
**	****How the Regions are Connected **
**	****Additions to Capacity and Mileage**
**III. Future Construction Requirements – **
**	****Major Announced Pipeline Expansions**
**	****Rocky Mountain Developments**
**	****Northeast Developments**
**IV. Concluding Remarks **

**Agenda**

## The Natural Gas Industry is Constantly Evolving.....

***“******A lot of the business is now focused on the physical transportation and trading of gas....People haven’t talked about that in a long time. People had been focused on financial markets, hedging, derivatives. What’s happening now is that people are clearly focused on moving physical molecules from one place to another, about pipeline capacity utilization and basis differentials. It’s classic stuff.”***
- 			-- Rusty Braziel, vice president, Bentek Energy, 			quoted in *Gas Daily* (September 16, 2008)

**The Natural Gas Industry is Constantly Evolving.....**

## Regional Natural Gas Consumption (trillion cubic feet)

**2007**

**2015**

**2030**

- Source: Energy Information Administration, *Annual Energy Outlook 2009*

**Regional Natural Gas Consumption ****(trillion cubic feet)**

## U.S. Natural Gas Consumption by Sector, 1990-2030(trillion cubic feet)

**History**

**Industrial***

**Electric Generators**

**Residential**

**Commercial**

**Transportation****

**Projections**

-  * Includes lease and plant fuel

- ** Includes pipeline fuel

- Source: Energy Information Administration, *Annual Energy Outlook 2009*

## Natural Gas Supply by source, 1990-2030 (trillion cubic feet)

- Source: Energy Information Administration, *Annual Energy Outlook 2009*

**Unconventional**

**Alaska**

**Net imports**

**Associated-dissolved**

**Non-associated offshore**

**Non-associated conventional**

**History**

**Projection**

## Gas Shales in the United States

- Source: Energy Information Administration, Office of Oil and Gas

## Cumulative Unconventional Production, 2007-2030 (trillion cubic feet)

***Northeast***

***Gulf Coast***

***West Coast***

***Rocky ***
***Mountain***

***Southwest***

***Mid-continent***

- 19

**14**

**3**

**5**

**43**

**3**

**11**

**13**

**3**

**32**

**6**

**0**

**3**

- 84

**36**

**Gas Shales**

**Tight Gas**

**Coalbed Methane**

- Source: Energy Information Administration, *Annual Energy Outlook 2009*

**Cumulative Unconventional Production, ****2007-2030 (trillion cubic feet)**

## Rockies Express Pipeline (REX)

- Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

## Natural Gas Pipeline Capacity Between Regions, 2008  (million cubic feet per day)

- _Southwest_

- _Midwest_

- _Southeast_

- _Northeast_

**Note:**** ****Aspect and size relationships among regions are not to scale.**
**Source: **Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database, as of January 2009.

**5,875**

**8,898**

**23,515**

** ****1,090**

**298**

**4,799**

**  ****51**

**3,016**

**4,018**

**3,755**

**9,267**

**2,491**

**4,897**
** **

**5,998**

** ****897**

**2,100**

**1,028**

**405**

** ****865**
** **

**  ****268**

**1,495**

** ****614**
**  **
** **

**   ****569**

** **

** **

** **

** **

** **

** **

** **

** **

**Natural Gas Pipeline Capacity Between Regions,**** ****2008**  **(million cubic feet per day)**

## Additions to Pipeline Mileage, 1998-2011

**Miles**

_**Actual**_

_**Potential**_

- Note: Only projects under construction or approved that were judged to have the most likelihood
- of being completed in 2009 were included in 2009.
- Source: Energy Information Administration, GasTran Natural Gas Transportation Information System,
- Natural Gas Pipeline Projects Database, as of January 2009.

**Additions to Pipeline Mileage, 1998-2011**

## Natural Gas Pipeline Capacity Additions, 1998-2011

_**Actual**_

_**Potential**_

**Million Cubic Feet per Day**

- Note: Only projects under construction or approved that were judged to have the most likelihood of being
- completed in 2009 were included in 2009.
- Source: Energy Information Administration, GasTran Natural Gas Transportation Information System,
- Natural Gas Pipeline Projects Database, as of January 2009.

**Natural Gas Pipeline Capacity Additions, 1998-2011**

## Major Potential Natural Gas Pipeline Expansions, 2009-2011

**Source: Energy Information Administration, GasTran Gas Transportation Information System, Natural Gas Pipeline Projects Database.**

**1,200 MMcf/d– Wyoming to North Dakota**
**        ****(2 New Pipelines – 2010 - 2011)**

**3,690 MMcf/d LNG Import Pipelines**
**      ****(7 projects – 2009- 2011)**

**225 MMcf/d capacity expansion to/from Canada**** (Vector Pipeline 2009-2010)**

**750 MMcf/d import expansions**
**           ****(2 Projects – 2010)**

**4,700 MMcf/d expansions **
**and new pipelines**
**  ****(7 Projects - 2009-2011)**

**1,632 MMcf/d LNG imports**
**(2 Import Pipelines – 2010-2011)**

**1,800 MMcf/d– Missouri to Ohio**
**        ****(KM Rockies Express – 2009)**

**8,740 MMcf/d from **
**Southwest  to Southeast**
**(12 Projects - 2009-2011)**

**2,300 MMcf/d– Wyoming to Iowa**
**(2 New Pipelines Pipeline – 2010 - 2011)**

**2,400 MMcf/d– Wyoming to Oregon**
**         ****(2 New Pipelines – 2011)**

**  ****700 MMcf/d LNG imports**
**(1 Import Pipeline – 2011)**

**3,740 MMcf/d from Oklahoma,**
**Arkansas & Texas to Louisiana**
**( 5 Projects - 2009-2011)**

**1,000 MMcf/d Export Pipelines**
**      ****(2 projects – 2010)**

**1,900 MMcf/d Expansions**
**       ****5 Projects – 2010)**

**1,400 MMcf/d Local Expansions**
**        ****(6 Projects – 2009 - 2011)**

**Major Potential Natural Gas Pipeline Expansions, 2009-2011**

## Rocky Mountain Interstate Pipelines

- Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

*** ******Chicago Express (1.5 Bcf)***

***   ******Ruby Pipeline (1.5 Bcf)***

**Kern River Gas Transmission**

**Wyoming Interstate**

**Northwest Pipeline**

**Northwest Pipeline**

**Colorado Interstate**

**TransColorado Gas**

**Rockies Express**

**Questar**

***Pathfinder (1.2 Bcf )***

*** ******Rockies Alliance (1.2 Bcf)***

**Rocky Mountain Interstate Pipelines**

## Rocky Mountain Prices and Basis

- Source: Natural Gas Intelligence, *NGI’s Daily Gas Price Index*.

**Cheyenne Plains**

**Kern River Expansion**

**REX-West**

**HurricaneKatrina**

**Recession**

## Northeast Interstate Pipelines

**Columbia Gas (TCO)**

**Transcontinental (Transco)**

- Source: Energy Information Administration, GasTran Natural Gas Transportation Information System, Natural Gas Pipeline Projects Database.

**Texas Eastern (TETCO)**

**Texas Eastern (TETCO)**

**Tennessee Gas (TGP)**

**Dominion (DTI)**

**National Fuel (NFG)**

*** ******REX (1.8 Bcf)***

*** ******DTI Keystone (1.0 Bcf)***

*** ******TETCO TEAM (0.3) Bcf)***

*** ******TGP 300 (0.3 Bcf)***

*** ******NFG West to East (0.7 Bcf)***

**Northeast Interstate Pipelines**

## Northeast Prices and Basis

- Source: Natural Gas Intelligence, *NGI’s Daily Gas Price Index*.

## Concluding Remarks

**I.  Shale and other unconventional resource development will drive pipeline expansions for the foreseeable future**
**II. As a result, the pipeline “Renaissance” will continue, although the peak in actual completions might have been reached in 2008 **
**III. Not all pipelines proposals will lead to actual infrastructure –the current economic downturn will have an impact on production and pipeline. Also, many LNG projects are expected to be cancelled in the future.**
**IV. In the Northeast, expansions of existing pipelines will likely address transportation requirements; however, another large infrastructure project may be needed in the Rockies.**

**Concluding Remarks**

## GasTran - related Publications:

***Distribution of Natural Gas: The Final Step in the Transmission Process (Released, 6/27/2008, pdf format)****** ***
**This special report analyzes the role of local distribution companies (LDCs) and transmission pipelines in delivering natural gas supplies to end-use customers, focusing**** upon the years 1996 through 2006. **
***Natural Gas Compressor Stations On the Interstate Pipeline Network: Developments Since 1996 (Released, 11/02/2007, pdf format)***
**This report examines the compression facilities added over the past 10 years and how the expansions have supported pipeline capacity growth intended to meet the increasing demand for natural gas. **
***About U.S. Natural Gas Pipelines (Released, 6/1/2007, html format) ***
**This information product provides the reader with a broad and non-technical overview of how the U.S. natural gas pipeline network operates, along with some insights into the many individual pipeline systems that make up the network.**** **

**GasTran - related Publications:**