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9.26.03 Natural gas demand and supply report Demand for natural gas will increase significantly during the next two decades -- to nearly 30 trillion cubic feet (Tcf) by 2025 -- but the price customers pay will depend largely on whether policy-makers act to increase supply and expand infrastructure, according to a major report issued in Washington, D.C., yesterday (September 25) by the National Petroleum Council. The NPC is an independent advisory group to the U.S. Secretary of Energy. In a statement issued after the report's release, AGA President and CEO Dave Parker said, "Five words can be used to summarize AGA's reaction to the NPC's latest report on natural gas supply and demand: 'act now, or pay later'." Key findings Natural gas prices can be more affordable if policy-makers act to increase supply significantly, to expand pipelines and storage and promote energy efficiency and conservation (the NPC terms this a "balanced" approach). Conventional natural gas production cannot keep pace with growing demand, especially for electric power generation and manufacturers' needs, the report found. Therefore, developing nonconventional resources and adding new supplies of natural gas from the arctic or LNG must be promoted. If politicians simply maintain the status quo, the NPC says natural gas prices will continue rising -- costing natural gas customers an estimated $1 trillion extra during the next 20 years. This new emphasis on price and the harmful consequences of politicians' inaction is striking, and new for the NPC. Recommendations The 17 pages of recommendations can be boiled down to four key themes. Here are the key recommendations, with AGA's viewpoint in italics. 1. Improve demand flexibility and efficiency.
2. Diversify supplies to meet U.S. natural gas needs. By 2025, 75 percent of future U.S. demand will likely come from traditional North American supply sources (as compared with 99 percent now), with most of the remainder from non-traditional liquefied natural gas imports and natural gas from the Arctic region (Alaska and Canada's Mackenzie delta). 3. Sustain and enhance the natural gas infrastructure. Promote major investment in natural gas infrastructure, including estimated $3 billion/year (or $70 billion total by 2025) for natural gas distribution facilities, plus expansion of interstate pipelines and underground storage. Encourage state Public Utility Commissions to recognize value of long-term contracts for price stability. 4. Promote more efficient natural gas markets. AGA's website features a convenient link to the NPC executive summary, webcast and the AGA Statement. Go to: http://www.aga.org For more information, contact: American Gas Association, 400 North Capitol St, NW, Washington, DC 20001; phone: 202/824-7211; fax: 202/824-7216; website: http://www.aga.org |
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