Category Archives: technology

Richard Meyer Natural Gas Market Indicators: April 15, 2015

A new study from Washington State University shows that methane emissions from U.S. natural gas distribution systems are 70 percent below current Environmental Protection Agency (EPA) estimates of those emissions. Based on data collected from pipeline leaks, meter and regulator stations, and city gates within 13 utility systems across the country, the study’s authors found that emissions from local distribution companies (LDCs) have decreased over the past 20 years due to upgrades, changes in pipeline materials, and better leak detection and survey methods.

As we often report here in the “Market Indicators” blog articles, industry experience and performance exists on a spectrum – one that is often improving in terms of practices and technologies, as well as the regulatory precepts that oversee these activities. This study demonstrates improvements to gas utility system safety and environmental performance, but it is also part of a larger industry trend of better overall performance.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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Christina Nyquist New Report Shows Growing Natural Gas Resources: Four Things You Need to Know

On Wednesday, April 8, AGA announced the findings of a new report detailing the nation’s supply of domestic natural gas. Compiled by the Potential Gas Committee, the year-end 2014 report Potential Supply of Natural Gas in the United States, shows that future U.S. gas supplies are at their highest level ever and continue to grow. This means the nation’s domestic abundance of natural gas can continue to support customer savings, economic growth, energy security and increased efficiency and environmental solutions.

AGA_3110-Potential-Gas-Committee-Map-V-3-WEB

Here are four things you need to know about the latest natural gas numbers.

Record Supply

  •  According to the Potential Gas Committee, U.S. technically recoverable natural gas resources are estimated to be 2,515 trillion cubic feet (Tcf) as of year-end 2014 – a five percent increase since the year-end 2012 report.
  • The U.S. Energy Information Administration (EIA) estimates that domestic dry proved natural gas reserves have doubled since 1993, and are now estimated at 338 Tcf. Proved reserves are volumes of natural gas known to exist that have been proven by exploration and development operations.
  • When combined with EIA proved reserves estimates, the U.S. future supply of natural gas now exceeds 2,850 Tcfthe highest combined future supply of natural gas ever.

Savings for Consumers

  •  Households that use natural gas for heating, water heating, cooking and clothes drying save an average of $693 per year compared to homes using electricity for those applications.
  • Strong supply fundamentals and robust delivery infrastructure suggest that natural gas prices will remain competitive and stable at a level well below the peak market prices of the preceding decade.
  • Low domestic natural gas prices have led to savings of almost $30 billion for residential natural gas customers over the past five years.
  • In 2013, the average commercial customer saved more than $2,000 on their annual bill due to low natural gas prices compared to 2008.

Direct Use of Natural Gas is the Efficient Choice

  •  Natural gas is 92 percent efficient when used directly in homes and businesses.
  • Customers can unlock greater savings by working with their local utility to make efficient energy choices.
  • In 2013, local utility efficiency programs helped customers reduce their annual natural gas usage by an average 18 percent and save $137 in annual energy costs, while offsetting 7.9 million metric tons of carbon dioxide emissions.

Expanding Access, Enhancing Safety

  •  To ensure that more Americans can safely enjoy the benefits of domestic natural gas, local utilities are working with governors, legislators and state regulators around the country to upgrade, enhance and expand the nation’s more than 2.4 million miles of natural gas infrastructure.
  • By investing in our energy future and advancing smart policy to enhance safety and expand infrastructure, customers can look forward to continued market stability, reliable service and affordable prices.

For more information, visit www.aga.org/PGCReport.

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Richard Meyer New DOE Rules Impose New Costs on Consumers for Little Benefit

AGA_2995 Furnace Standard Infographic_web_FINAL_Page_1On March 12, the U.S. Department of Energy (DOE) proposed a new rule that would raise minimum efficiency standard for natural gas fired furnaces. The rule, if finalized in its current form, would mandate the manufacture of furnaces that meet a 92 percent or higher specification for energy efficiency.

On the surface, the rule appears to be a positive step toward achieving greater energy efficiency. However, a closer examination reveals many problems that conflict with DOE’s stated goal of improved efficiency and reduced emissions. These counterproductive and unintended consequences include:

  • An economic burden on consumers required to bear the prohibitive costs of the expensive equipment and installation.
  • The undermining of efficiency programs and the financial incentives that enable consumers to purchase high-efficiency furnaces.
  • Wasted energy and higher emissions because customers are induced to switch to cheaper equipment, such as electric furnaces, which have a much higher full-fuel-cycle energy and emissions footprint.

Natural gas utilities have a demonstrated track record of supporting efficiency and reducing energy consumption, a fact validated by years of improvements in household natural gas use. This rule would impose new costs on consumers but add little in terms of energy or emissions benefits. Here we explore in more detail some of the consequences of DOE’s action.

AGA_2995 Furnace Standard Infographic_web_FINAL_Page_2Billions of Dollars in New Costs Imposed on Consumers

DOE’s proposed rule would lead to monthly bill reductions – for some homes and businesses. Under the rule customers would bear between $6 and $12 billion dollars in new costs associated with higher efficiency furnaces (a dollar amount that AGA believes DOE is underestimating). And these costs are distributed unevenly. According to DOE’s proposal, one out of every four households that currently have a furnace would pay more over the life of a new furnace, an inequity that can have a disproportionate effect on many low- and fixed-income households.

Despite the high costs of implementation, the rule would generate only modest energy and emissions savings. According to data in the proposal, the furnace standard would lead to only 1.1 percent in energy reduction relative to no action. In turn, the rule will achieve only 0.2 percent in carbon dioxide emissions reductions compared to a case without amended standards. For billions in upfront consumer costs, DOE’s proposed energy and emissions savings are scant.

By contrast, natural gas efficiency programs today already achieve 60 percent more annual emissions reductions at far lower cost than DOE’s proposed rule would accomplish after three decades of implementation. And these savings will only continue to grow as utilities continue to invest in their efficiency programs.

Furnace Standard Undermines Efficiency Program Gains and Emissions Targets

Why are DOE’s proposed energy reductions this small? Any declines come on top of a decades-long trend of energy efficiency that has already substantially reduced natural gas use in homes and businesses. The typical American household uses 50 percent less gas than it did in 1970, meaning the US uses the same amount of natural gas to serve 30 million additional residences. This is due in large part to natural gas utilities that promote energy efficiency in homes and businesses. Ignoring this track record of successful energy efficient approaches, DOE has proposed a costly mandate that achieves only modest savings.

Natural gas utilities across the country promote energy conservation measures, including efficient natural gas furnaces. Through 112 established programs in 39 states, the vast majority of utility efficiency programs offer homeowners financial incentives to purchase and install a high-efficiency gas furnace. These incentives include cash rebates, low-interest loans, and low or no-cost upgrades for low income customers. This proven, comprehensive, customer-focused, and cost-effective approach could be threatened by the proposed DOE rule.

State utility regulators evaluate efficiency programs based on the ratio of its costs to its benefit, such as energy savings. A higher minimum efficiency standard for furnaces would elevate the baseline from which all energy savings are calculated, thus reducing the savings that qualify as a direct benefit of the program. This, coupled with the higher costs of purchasing and installing a 92 percent efficient furnace, may disqualify many furnace replacement programs should they fail the cost-effectiveness threshold that state regulators require.

As mentioned, the energy savings from natural gas utility programs are already achieving more than the savings DOE is projecting in its proposed rule. In 2013 alone (based on the most recent AGA data), utility efficiency programs reduced gas usage in participating homes by 18 percent—the equivalence of twelve days of residential gas consumption.

Furnace Standard Will Cause Higher Emissions and Lower Efficiency for Many Households

What would the effect of the rule be on a typical household? Let’s say a home has a furnace at the end of its usable life, and it fails irreparably. A homeowner will be faced with one of two options:

  • Option 1: Purchase a new gas furnace, at DOE’s stricter efficiency standard, and pay the additional costs of the appliance and installation.
  • Option 2: Switch to less costly equipment such as an electric furnace or heat pump, resulting in increased energy use, higher emissions, and larger monthly energy bills in many areas of the country.

Some consumers that choose Option 1 will see lower overall costs, but not all homeowners or businesses will share in this benefit. Even DOE acknowledges that one in four consumers that replace their furnace will pay more over the life of the equipment because of higher installation costs. The energy savings are just too modest to counterbalance the costs.

In other words, homeowners that today could not justify the purchase of a 92 percent efficient furnace (at least not without gas utility and other incentives) would be forced under DOE’s proposal to make the purchase and eat the costs.

Looking at Option 2, DOE says that 10 percent of consumers will instead switch to an electric furnace or heat pump, which increases emissions and energy use due to the inefficiencies of electricity generation and transmission.  To boot, AGA collected data from contractors that suggests that DOE’s estimate is likely too low – even more customers than DOE expects would be compelled to pull out their furnaces and install an inefficient though less expensive electric appliance. The furnace proposal ostensibly lowers energy use and emissions. This unintended outcome, fully acknowledged by DOE, runs counter to that intent.

Ultimately, DOE’s new standard will impose additional costs on consumers, induce some customers to increase their energy use and grow emissions, and negatively impact efficiency programs that already achieve greater savings than DOE’s proposed rule.

It’s time to re-examine this prescriptive approach and apply a comprehensive vision for furnace efficiency, which recognizes the proven gains from local utility efficiency programs and product choices.

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Lisa O'Leary The International Builders’ Show 2015

Nearly 125,000 home builders, remodelers, architects, designers and suppliers packed the aisles of the second annual Design & Construction Week at the Las Vegas Convention Center, helping the city achieve record-setting attendance for the month of January. The National Association of Home Builders’ (NAHB) International Builders’ Show and the National Kitchen and Bath Association’s Kitchen and Bath Industry Show (KBIS) co-located to offer an exhibition and educational program for all facets of the residential construction industry.

booth day 2

In its 69th year at the show, the American Gas Association (AGA) partnered with nearly a dozen natural gas appliance manufacturers to feature the latest industry technology in our 2,500 sq. ft. exhibit booth, powered entirely by an EcoPower micro CHP unit. Other manufacturers included Rinnai, Navien, Bradford White, Lennox, FiveStar, BSH Home Appliance, Marathon, Bevolo Gas and Electric Lighting and Dettson West. Booth newcomers included BlueStar and Earth’s Flame.

BlueStar attracted a lot of media attention, including HGTV who stopped by on the first day of the show to film their new range in the Pantone Color or the Year, Marsala. Their product was a great tie-in of both shows and attracted builders and designers alike.

BlueStar08

AGA booth attendees had the opportunity to register to win a natural gas lantern by RH Peterson. Since photos just didn’t do it justice, we put together a quick, 15 second video to share to help showcase the natural gas lantern which was used on AGA’s social media platforms. Congratulations to our lantern winner Randy Stovall, of Wichita, KS!

At the start of the second day of the show, AGA had the pleasure of hosting the NAHB Women in Professional Building Council breakfast at our booth. This is a long-standing tradition and we enjoy having this lively group with us each year.

women

This year’s celebrity sighting at the AGA booth was comedian and host of “Catch a Contractor,” Adam Carolla (right). He stopped by to learn about FireMagic Grills from RH Peterson Vice President Mike Waller (left).

Mike

On the third and final day, AGA took a tour of the sophisticated 2015 New American Home. AGA was a sponsor of the home and worked closely with Southwest Gas, who delivered natural gas to the home, while Questar Gas provided a bi-fuel Chevrolet pickup for display in the driveway.

Image Courtesy of www.tnah.com

Image Courtesy of www.tnah.com

AGA looks forward to returning to Vegas on January 19-21, 2016 when IBS and KBIS will join forces for the third year in a row. Last week, the two shows announced that they will continue to co-locate through 2020. For more information about next year’s show and beyond, contact Tracy Burleson at tburleson@aga.org.

For more photos of the Builders’ Show, check out AGA on Twitter, Facebook and Instagram.

Posted in appliances, CHP, International Builders' Show, Natural Gas, Natural Gas Market Indicators, technology | Leave a comment