True Blue Natural Gas - An Energy Blog from the American Gas Association AGA

Safety of Compressed Natural Gas

Dan Gibson — Thu, 02 Feb 2012 21:48:49 +0000

Check out this great new video on CNG with Stephe Yborra from NGV America

Natural gas utilities are a sound return on investment

Jake Rubin — Tue, 31 Jan 2012 21:24:28 +0000

On Wednesday, Larry Borgard told the New York Society of Security Analysts that natural gas utilities are a sound return on investment. Borgard is chairman of the American Gas Association (AGA) and president and chief operating officer, Utilities, of Integrys Energy Group, Inc. He met with the investment community on Wednesday to outline the role of America’s natural gas utilities in creating our clean energy future.

“The recent low prices for natural gas that we have seen are good news for our customers, residential, as well as in commercial and industrial markets,” Borgard said. “Natural gas is an abundant, domestic and clean energy source. Our industry creates millions of jobs. There are exciting opportunities to expand the applications of natural gas, including greater direct use in homes and businesses, as well as in the transportation sector with natural gas vehicles. Natural gas is the future of the energy industry, and by extension our economic future.”

During this continued period of stagnant economic growth, shareholders of natural gas utilities have seen consistent and strong dividends. Most natural gas utilities have paid dividends continuously for more than 50 years. Over the past year, the AGA Index (an index consisting of member companies of the American Gas Association) performed strongly in comparison with the Dow Jones Utility Index.

Photos below. You can also view them on Facebook or the full album over on Flickr.

Natural gas is the right fuel in the right place at the right time

Jake Rubin — Mon, 30 Jan 2012 21:21:49 +0000

In his most recent state of the union address, President Obama said:

This country needs an all-out, all-of-the-above strategy that develops every available source of American energy a strategy that’s cleaner, cheaper, and full of new jobs.

We have a supply of natural gas that can last America nearly 100 years. And my administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use, because America will develop this resource without putting the health and safety of our citizens at risk.

The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.

This is the first time in recent memory that a President of the United States has mentioned natural gas so prominently in such a public forum. Natural gas is the right fuel in the right place at the right time.

We are pleased by President Obama’s strong support for America’s foundation fuel, and hope the he will incite action following his State of the Union remarks by putting in place policies that expand the use of natural gas, so that every American and our nation as a whole can benefit from this clean, abundant, domestic resource.

Natural Gas Market Indicators

Chris McGill — Fri, 27 Jan 2012 15:17:37 +0000

This shouldn’t take too long. Natural gas acquisition prices are low. Storage inventories are bursting at the seams for this time of year and “must turn” requirements for some volumes of storage may put additional downward pressure on prices.

Warm weather for the country as a whole has completely trumped any market pressure on pricing that may have developed this winter given reductions in gas-directed drilling.

More natural gas may displace coal in power generation in the short-term and market changes will come, eventually. However, little is expected to change for the balance of the winter heating season unless there is an extraordinary cold weather event.

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

EIA – Natural gas production and use helps reduce emissions and increase energy security

Richard Meyer — Tue, 24 Jan 2012 19:00:07 +0000

The U.S. Energy Information Administration has released its yearly long-term outlook of energy markets. EIA, the federal agency in charge of energy statistics and forecasts, uses its Annual Energy Outlook to present its view of energy consumption and production in the United States from now until 2035. They unveiled the 2012 Early Release yesterday, and a few high-level points are worth mentioning:

1. Natural gas production rises over projection period and shale comes to represent half of all dry gas production.

EIA sees shale as a growing and increasingly important resource of natural gas for the county; that there is a lot of gas, and it will be produced. In EIA’s view, shale gas is expected to grow to nearly half of all natural gas production by 2035, spurred by new technology, and a greater push toward more liquids-rich plays due to higher oil prices. In the last few years, natural gas production from shale has propelled from nearly nothing to 5.0 trillion cubic feet in 2010, making it 23 percent of all U.S. gas production that year. Data for 2011 indicates that shale production grew again last year. In the outlook, EIA sees continued growth in shale gas production, increasing to an incredible 13.6 trillion cubic feet in 2035, making it 49 percent of the total U.S. dry gas production.

: U.S. Natural Gas Production, 1990-2035 (trillion cubic feet)

Natural gas consumption is projected to grow also. More gas will be used for electricity generation, the greatest area growth of gas consumption according to EIA. The agency remains bearish on natural gas for transportation and distributed generation applications like combined heat and power; certainly, natural gas consumption will grow more than EIA’s base case projection if these opportunities are realized. Yet, despite growth in natural gas use, production will exceed consumption. The resulting gap will be filled by greater exports of gas. Exports will increase as the U.S. becomes a net LNG exporter by 2016 and net pipeline exporter by 2021. What does this mean for natural gas prices? EIA’s view is average annual wellhead prices will remain $5 per thousand cubic feet through 2023 and reach $6.52 per thousand cubic feet in 2035. This is still well below price levels seen only a few years ago.In sum, shale gas production will grow faster than end use consumption and the U.S. will move toward being a net shipper of gas to Canada and overseas. Despite this change in dynamics, prices will remain relatively low – which of course is good for consumers and industry here at home.

2. Total U.S. energy-related carbon dioxide emissions remain relatively flat and stay below 2005 levels through 2035.

This strikes me as a remarkable departure from history. From 2010 to 2035, the outlook for energy-related greenhouse gas emissions projects a 3 percent increase in total emissions to 5,806 million metric tons. Why the flattening profile and lack of growth in emissions? Three reasons: 1) Energy efficiency improvements like the corporate average fuel economy standards (CAFE) and appliance and equipment efficiency standards will lower energy consumption. Greater investment in this area could further accelerate these trends. 2) State renewable portfolio standards are increasing renewable build-out and, combined with efficiency improvements, are lessening the carbon intensity of the electric system. And 3) low-cost, competitive natural gas will be substituted for coal-fired electricity generation. New environmental regulations will drive more coal retirements.

: U.S. energy-related carbon dioxide emissions, 1990-2035 (billion metric tons)

A couple key pieces of regulation aren’t included as part of the projection, and it’s possible we might see even lower carbon dioxide emissions projected when the full report, which will include these regulatory additions in the modeling, is released in April. First, the complete Mercury and Air Toxics Standards issued by the U.S. Environmental Protection Agency would likely lead to more coal power plant retirement and thus greater use of lower-carbon natural gas as a substitute. Secondly, proposed fuel economy standards for post-2017 would likely reduce transportation demand in the out years.

One last point I’ll touch on is that the increase in natural gas & oil production means the U.S. will decrease its reliance on foreign oil and increase energy security here at home. As domestic crude oil production increases from 5.5 million barrels today to 6.7 million barrels by 2020, in EIA’s view, net petroleum imports will decrease from 49 percent to 36 percent. By reducing oil exports and producing natural gas energy here at home, we can move toward lower reliance on foreign energy – and perhaps even be a provider of that energy – and increase energy security here at home.

So that’s my quick look at a couple aspects of the AEO early release. There is a lot more in the AEO early release in terms of electricity markets, oil, renewables, and of course natural gas that you can check out here. I’ll try to share more as I page through the Early Release more and find some good nuggets.

Natural Gas is the Fuel of the Future

Jake Rubin — Thu, 19 Jan 2012 21:24:30 +0000

The news this week has been full of stories about the low price of natural gas. Indeed, U.S. natural gas futures fell to $2.402 per million Btu, the lowest price since March 4, 2002. Our nation possesses a 100-year supply of this clean burning energy source and we are the largest producer of natural gas in the world. So what can we do with this abundant natural resource?

Natural gas is our country’s foundation fuel and is well positioned to serve as a reliable, secure and clean energy source for U.S. homes, businesses and industries for decades to come. In an article in the recent issue of Oil & Gas Monitor AGA President and CEO Dave McCurdy outlines some of the ways Americans can utilize natural gas to improve our economy, reduce our impact on the environment and secure our nation’s energy future. Take a look.

The promise of the gas revolution

Jake Rubin — Tue, 17 Jan 2012 19:43:12 +0000

In the January/February 2012 issue of EnergyBiz Magazine, American Gas Association President and CEO Dave McCurdy outlines why natural gas is America’s domestic, clean foundation fuel for now and for our long-term future.

Energy Biz did a terrific job of laying out for their readers the various options that neighborhoods, businesses and consumers have when choosing how to consume electricity, heat their homes, and cook their food. Dave McCurdy’s article is alongside others by leaders in the energy industry.

I urge you to read them all and see why natural gas is emerging as a clear favorite as our nation strives for energy independence. Natural gas can help meet the energy needs in all sectors – residential, commercial, industrial, electricity generation, and transportation – cleanly, economically, and efficiently.

John Carroll celebrates 40 years with AGA

Dan Gibson — Mon, 16 Jan 2012 18:55:45 +0000

The AGA Team here in the nation’s capital would like to recognize one of its most seasoned and professional employees, John Carroll. As AGA’s assistant controller, John has just celebrated his 40th year of tireless service to AGA and the natural gas industry, having begun his career in 1971. In fact, that year he was one of the first employees hired at AGA when the association moved from New York to Washington, D.C., in order to increase its political influence. Thus John’s contribution to keeping AGA fiscally and financially sound is one of the reasons why, 40 years later, AGA is still around and still tirelessly representing the natural gas utility industry.

Natural Gas Market Indicators

Richard Meyer — Fri, 13 Jan 2012 19:48:14 +0000

While many analysts do not expect to see 2012 year-over-year production growth on the scale seen in 2011, most do not expect a precipitous decline in domestic production either. Slowing gas-directed rig counts are one possible indicator of the future flattening of U.S. gas production growth, however, many analysts point to rig, well and completion efficiency improvements along with an inventory of wells yet to be hooked up as a countering market force.

Indeed, pricing pressure today as a result of market forces means starting at a baseline of $3 per MMBtu. A 50 percent increase in average acquisition prices would only result in a baseline that many analysts believe is ultimately necessary to sustain the long-term health of U.S. gas production.

Perhaps the key to this puzzle is not rig counts but demand for natural gas. Realizing the full potential of North American natural gas energy may not occur until it is actually demanded.

Learn what energy efficiency programs your natural gas utility offers

Dan Gibson — Thu, 12 Jan 2012 19:33:52 +0000

You should probably check with your local natural gas utility to see what they offer in the lines of energy efficiency programs. Energy efficiency programs provide incentives and services that assist customers in making improvements and investments in home energy efficiency to reduce energy costs. These programs offered by utilities aren’t new, some have been in place for more than 30 years, but they have risen quite a bit in recent years.

According to a new report released by the American Council for an Energy-Efficient Economy (ACEEE), “Nationwide the budgets for these programs reached $942 million in 2010, saving 529 million therms-enough natural gas to take care of the needs of 695,000 average American homes. These programs have experienced rapid growth. In 2005 total budgets were $125 million nationwide.”

The report is jam-packed with information. It examines the structure, origins, funding, and impacts of natural gas efficiency programs for the forty-one states where they are in place. For instance, if you live in California, it includes information on the programs offered by Pacific Gas & Electric (PG&E), Southern California Gas Company (SCG), and San Diego Gas & Electric Company (SDGE).

The entire report is downloadable for free on the ACEEE website.