It was the strongest winter in decades. The polar vortex, a new term to most of us last winter, brought a mass of freezing air from its usual home in the artic and dropped it over North America where it settled and stayed. As the bitter cold persisted, families turned up thermostats and power consumption jumped. Across the country, more natural gas was being used than ever before.
In fact, the top five days for natural gas consumption in history took place last winter. For the industry, it was the most exceptional heating season ever. But it was more than just records and high demand for natural gas. It was a test, the industry’s first during the shale era.
In recent years, abundant supplies have awakened broader recognition of new and greater use for natural gas and an expectation of performance. It’s in this context that the industry faced consumers’ unprecedented requirements this winter. How did the industry do?
Simply put, local gas companies rose to the occasion and customers were served. When presented with a real-world test of stability, capability, and reliability under exceptional conditions, gas utilities delivered. This outcome was the result of the planning, preparation and performance of the industry, and of gas utilities in particular.
This week, AGA released a new report entitled Promise Delivered, providing an examination of the past winter heating season from the perspective of natural gas utilities.
Here are the top seven observations and conclusions to take away from the 2013-2014 polar vortex:
- The 2013-2014 winter set new records for the largest volume of natural gas ever consumed.
- Natural gas utilities employ numerous flexible approaches to supply planning and operations. Across the country, resources were available when needed, which suggests that existing processes, regulatory oversight and planning procedures are working.
- Underground storage played its largest role ever to meet consumer demand, a result of investment and contracting to assure supply storage when needed.
- Constraints on systems that feed into distribution company networks can affect gas utility operations and customers. These considerations are often recognized in system and regional infrastructure planning as appropriate.
- Flowing natural gas was available and generally affordable for local gas utilities that needed it. Supplies were bolstered by strong and steadily increasing domestic production, incremental pipeline volumes from Canada, and short-term bursts of liquefied natural gas imports.
- Customers that contract for interruptible service are a crucial component of gas utility supply planning and system operations management during peak days. Due to the exceptional winter, the frequency and duration of interruptions increased in some cases.
- Stable and affordable natural gas prices and the cumulative contributions of energy efficiency helped to moderate customer bills this winter. Continued encouragement of policies to maintain affordable prices and spur greater efficiency will help further mitigate bills during future winter events.
In many ways, these tangible experiences of this past winter pave the way for future development of natural gas applications in homes and businesses. The study’s observations reinforce a vision of a stable US natural gas market shaped by the following broader developments:
- Growth across the natural gas industry – production, transmission, storage and distribution – has laid the foundation for today’s market. Future infrastructure development will be key to further growth and stability.
- Demand signals have facilitated the substantial increase in domestic natural gas supplies. Future increases in demand are expected to continue this trend.
- Policies and regulatory precepts evolve with time, and the natural gas industry will face new challenges in the future. However, the iterative process of aligning industry opportunity with regulatory principles has been most successful when it manifests sustainable value for utilities and consumers.
- The future of the natural gas industry is one of efficiency at its core—in production, transportation, and direct-use.
Bottom line: a new bar has been set. Our vision of a stable natural gas market is predicated on today’s realities of abundant domestic supplies, diverse sources, flexible options and affordable prices, and this past winter’s experience substantiates that vision. Ultimately, it underscores the industry’s ability to deliver and serves as a proof point for new investments in the nation’s natural gas infrastructure.