LNG

The American Gas Association said the state of Nebraska’s state legislature became the 26th state to pass fuel choice legislation in a unanimous and bipartisan vote, securing the protection of energy choice for consumers in a majority of states across the country.

The AGA explained that consumer energy choice preserves access to safe, clean and affordable energy resources including natural gas that offer a sustainable pathway to the shared goal of reducing emissions while maintaining affordability, reliability and quality of life for Americans.

“Thanks to the bipartisan action of now 26 state governments, more than 157 million Americans and 58 million households have a protected choice when it comes to how to fuel their homes and businesses,” said AGA President and CEO Karen Harbert.

Natural gas usage

“The average home using natural gas for space heating, water heating, cooking and clothes drying has about 18 percent lower carbon dioxide emissions than those attributable to an all-electric home, and the average family using natural gas for those purposes saves an average of $1,132 per year,” explained Harbert.

“Over the past 10 years, American families have saved a total of $125 billion thanks to natural gas,” she stated.

“Those are numbers we can be proud of. They also highlight how harmful natural gas bans would be for American families,” Harbert stated.

The AGA represents more than 200 local energy companies that deliver natural gas throughout the US.

There are more than 77 million residential, commercial and industrial natural gas customers in the US, of which 95 percent, or around 73M customers, receive their gas from AGA members.

Fuel choice legislation preserves access to natural gas in homes and businesses in states that have enacted them across America.

Nebraska became the 26th state to pass such a law, joining Idaho, Montana, North Dakota, South Dakota, Wyoming, Utah, Arizona, Kansas, Oklahoma, Texas, Iowa, Missouri, Arkansas, Louisiana, Indiana, Ohio, West Virginia, New Hampshire, Kentucky, Tennessee, North Carolina, Mississippi, Alabama, Georgia and Florida.

Bipartisan moves

“Every state to pass fuel choice legislation has done so in a bipartisan manner,” said the AGA.

“Since 1990, emissions from the natural gas distribution system have declined by 70 percent, even as demand for and usage of natural gas has increased with natural gas served to 23.4 million more consumers and the number of miles of distribution pipeline increasing by 59 percent,” the AGA noted.

US Natural gas is currently 3.3 times more affordable than electricity and expected to remain substantially more cost-efficient through at least to 2050.

“The affordability of natural gas is a critical reason why more than 500,000 families signed up for natural gas space heating, rather than electric heat pumps, over the past five years,” the AGA said.

Kinder Morgan Inc., the US pipeline giant transporting natural gas to LNG plants and to customers around America, said it now provided 50 percent of the feed-gas used by US LNG export plants and was planning more pipeline expansions to serve liquefaction facilities.

The US Government is expanding federal oversight of natural gas pipelines nationwide affecting gas gatherings systems supplying feed gas to LNG export facilities and to domestic pipeline customers.

The American Gas Association, the industry group representing over 200 utility companies delivering natural gas throughout the US, said its members had recently invested $3.8 million per day on energy efficiency programs.

The American shale basins of Marcellus and Utica that underpin rising US LNG exports and domestic gas use contain geological indicators of huge volumes of undiscovered technically recoverable resources of natural gas.

The US Potential Gas Committee (PGC), a body made up of more than 800 experienced volunteer geoscientists and engineers and the American Gas Association (AGA), have announced that the nation has a 3,374 trillion cubic feet (Tcf) natural gas resource base, boosted by expanding shale-gas reserves in key basins.

The American Gas Association has welcomed the balanced perspective taken in the draft guidance released by the White House Council on Environmental Quality in relation to the greenhouse-gas emissions of major energy, pipeline and liquefied natural gas projects.

The new draft guidance is aimed at helping to clarify how federal agencies should consider the greenhouse-gas impacts of major project permitting decisions when conducting environmental reviews under the US National Environmental Policy Act.

“The draft guidance from the White House Council on Environmental Quality will help facilitate the environmentally-responsible construction of natural gas pipelines and other infrastructure that our customers want and need,” said AGA President and Chief executive Karen Harbert.

“Streamlining and clarifying the permitting process helps the natural gas industry provide timely, safe, reliable and affordable service to the 178 million Americans who enjoy the benefits of natural gas and the millions more that want it, but do not yet have access,” added Harbert.

In particular, the draft guidance would help focus agency resources on evaluating the reasonably foreseeable greenhouse-gas impacts of agency permitting decisions, rather than “expending resources on evaluating remote or speculative matters” that do not have a sufficiently close causal relationship with an agency’s permitting decision.

The guidance directs agencies to consider greenhouse-gas emissions when “substantial enough to warrant quantification.”

Agencies do not have to consider how a project might impact greenhouse emissions if doing so would be “overly speculative.”

It reverses a 2016 rule from the same Council under the previous presidency that directed agencies to analyze how the projects they approve will contribute to climate change.

President Donald Trump withdrew the previous guidance in April 2017.

Environmental groups have said the proposal would reduce environmental protection.

The US Congress has been divided along party lines on the proposal, with Republicans praising the Trump Administration for removing hurdles for energy development as the nation embarks on boosting domestic natural gas use in power generation and LNG exports.

“This proposed guidance will help ensure that major energy projects in Wyoming and across the country can move forward without needless delays and litigation,” said John Barrasso, Republican Senator for Wyoming and head of the Environment and Public Works Committee.

The American Petroleum Institute also approved, saying it would “streamline” the National Environmental Policy Act (NEPA).

“NEPA, which is a procedural statute only, increasingly has been misused to delay and prevent development, which negatively affects jobs, tax revenue and investment in communities across the country,” said Howard Feldman, senior director of regulatory and scientific affairs for the American Petroleum Institute.

The US is in the midst of an LNG export build-out focused mostly on the Gulf Coast to earn billions of dollars for the American economy from the shale-gas glut by providing foreign countries with cleaner natural gas to replace coal.

At present four LNG export plants are on stream, Sabine Pass and Cameron LNG in Louisiana, Corpus Christi in Texas and Cove Point in Maryland.

The Elba Island LNG plant in Georgia and the Freeport facility in Texas are also scheduled for start-up to give the US six exporting plants. 

At least a dozen more liquefaction and export plants and feed-gas pipelines are making progress along the regulatory route.

US liquefied natural gas exports decreased in the past week after foggy conditions closed the Sabine Pass waterway on the Gulf Coast to larger ships, while on the domestic natural gas market prices dropped as warmer weather arrived along with milder forecasts and smaller-than-expected withdrawals from the nationwide gas storage system.

US pipeline company Williams said its Transcontinental Gas Pipe Line (Transco) interstate system delivered a record amount of natural gas in January to distribution companies, power generators and LNG exporters because of successful expansions and the trend will continue in 2019 and 2020.

Transco delivered a record 15.68 million dekatherms (MMdt) on January 21 and the new peak-day mark surpassed the previous high that was set on January 5 last year.

In addition to being a major supplier to the growing LNG export industry, Transco provides natural gas to markets in 12 Southeast and Atlantic Seaboard states, including America’s biggest metropolitan areas.

The pipeline system, extending almost 1,800 miles from South Texas to New York City, also established a new three-day market area delivery record, averaging 15.30 MMdt from January 30 to February 1, 2019.

Williams, based in Tulsa, Oklahoma, said the natural gas delivery records were the result of additional firm transportation capacity created by multiple fully-contracted Transco expansions completed in 2018 and early 2019.

The abundant US natural gas supplies are being delivered into domestic markets when required as well as to liquefaction and LNG export plants. The LNG plants are set to double in number from three operational facilities to six by the end of 2019.

Williams said its pipeline expansions included the Gulf Connector, Atlantic Sunrise and the Garden State Phase II projects.

The company said that together, these expansions added more than 2.3 MMdt of firm transportation capacity to the existing pipeline system.

Construction is expected to commence on five additional Transco projects in 2019.

These are for the Rivervale South to Market system, Hillabee Phase 2, the Northeast Supply Enhancement and the Gateway and Southeastern Trail projects, collectively creating approximately 1.15 MMdt of additional pipeline capacity in 2019 and 2020.

“The recent frigid conditions across the country are an important reminder of the vital role transmission pipelines play in delivering the natural gas necessary to keep millions of Americans safe and secure, especially during winter periods of peak demand,” said Alan Armstrong, President and Chief Executive of Williams.

“The incremental capacity from the fully-contracted Transco expansion projects placed into service in 2018 and early 2019 reflects an increase of about 16 percent in Transco’s design capacity,” he added.

“This has helped position us to meet the growing demand needs of our customers,” stated Armstrong.

US liquefied natural gas exports rose in the past week even as feed-gas levels were lower and freezing weather in the Midwest and elsewhere increased domestic demand and led to a rise in pipeline imports from Canada.

LNG exports rose to seven shipments, six from Sabine Pass in Louisiana and one from Cove Point in Maryland, compared with six the previous week, while one vessel was lifting a cargo at Sabine Pass through January 31.

“Natural gas feedstock deliveries to US liquefaction facilities have decreased during the past two weeks and averaged 3.9 billion cubic feet per day compared with an average 4.9 Bcf/d from January 1 to January 15,” according to the weekly report from the Energy Information Administration.

“The Corpus Christi terminal has not had any feedstock deliveries since January 20, when the facility exported its first five commissioning cargoes,” noted the EIA.

Domestic natural gas demand surged, driven by the residential and commercial sectors amid the freezing weather.

“In the residential and commercial sectors, consumption increased by 11 percent, reaching a near-record high of 70.9 Bcf per day on January 30, the second-highest value ever recorded (the highest was 71.6 Bcf per day in January 2014),” stated the report.

The EIA said that supply remained flat. “The average total supply of natural gas remained the same as in the previous report week, averaging 94.0 Bcf per day,” said the report.

It noted that average net imports from Canada increased by 7 percent from the previous week because of the cold weather.

On the regional price front, there were rises in the Midwest and Chicago regions because of the historically cold weather.

Northeast prices were also higher, while the benchmark Henry Hub price declined 14 cents on the week to $2.96 per million British thermal units.

“A polar vortex blanketed the Midwest and Northeast at the end of the report week,” said the EIA.

“At the Chicago Citygate, the most heavily affected major trading hub, prices increased $1.88 per MMBtu from $3.11 per MMBtu to $4.99 per MMBtu with a weekly high of $7.46 per MMBtu on January 29,” added the report.

Prices rise sharply in Northeast cities during the polar vortex. At the Algonquin Citygate, which serves Boston, prices went up $5.57 from $3.53 per MMBtu to $9.10 per MMBtu after reaching a weekly high of $10.04 per MMBtu.

“At the Transcontinental Pipeline (Transco) Zone 6 trading point for New York City, prices increased $9.53 from $2.98 per MMBtu to their weekly high of $12.51 per MMBtu,” said the report.

Shale-gas prices in the Appalachian region also rose though at a slower pace. Tennessee Zone 4 Marcellus spot prices increased 16 cents on the week to $2.92 per MMBtu.

“Prices at Dominion South in southwest Pennsylvania rose 22 cents to $2.94 per MMBTU,” said the EIA.

In the storage report, net withdrawals from storage totaled 173 Bcf for the week ending January 25, compared with the five-year (2014-2018) average net withdrawals of 150 Bcf and last year's net withdrawals of 126 Bcf during the same week.

“Working gas stocks totaled 2,197 Bcf, which is 328 Bcf lower than the five-year average and 14 Bcf lower than last year at this time,” added the report.