IMPLICATION OF CLIMATE CHANGE ON NATURAL GAS UTILITIES

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IMPLICATION OFCLIMATE CHANGE ON NATURAL GAS
UTILITIES

• Presented to the
• Finance Committee
• By
• Paul Wilkinson
• American Gas Association
• Washington, D.C.
• October 11, 2007

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U.S. GHG Emissions by Fueland Sector - 2004
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Timing and Levels 2007 Federal GHG Proposals
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CO2 REDUCTIONS . . . TECHNICAL POTENTIAL
Achieving all targets is very aggressive, but
potentially feasible.
Source EPRI (Elect. Power Research Inst.)
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• Natural Gas Supplies Must be Increased If
  Greenhouse Gas Emissions are to be Decreased

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US NATURAL GAS PRODUCTION1990 - 2005
Source Energy Information Administration
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MORE THAN ONE-FOURTH OF ALL U.S. LOWER-48 NATURAL
GAS RESOURCES ARE SUBJECT TO ACCESS RESTRICTIONS
21 TCF
346 TCF
40
100
31 TCF
100
RestrictedPercentage
43 TCF
56
Approximately 29 trillion cubic feet (TCF) of the
Rockies gas resources are closed to development
and 108 TCF are available with restrictions.
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Natural Gas Est. Resource (187 Tcf)
Source Scientific Inventory of Onshore Federal
Lands Oil and Gas Resources and the Extent and
Nature of Restrictions or Impediments to Their
Development, 2006.
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EXISTING AND NEW NORTH AMERICAN TOTAL IMPORT
CAPACITY (2009-10)
Bcfd
Total Capacity 16.1
New Under Construction
Existing New Under Construction
Range of LNG Demand in 2010
7.7 High
5.7 Reference
Existing
3.6 Low
Sources FERC, US Coast Guard, LNG Express,
WGI, LNG Observer AEO 2006, EIA
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JAN 2006 ATLANTIC BASINNATURAL GAS PRICES
/MMBtu
Source Energy Intelligence Unit
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ALASKA
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• The Fuel Mix for New Electricity Generating
  Units Must be More Diversified

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GENERATION OPTIONS AFFECTED BY PUBLIC POLICY
Source Henwood Energy Consulting
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• The Direct Use of Natural Gas is the Most
  Efficient Use and the Best Use for Reducing
  Greenhouse Gas Emissions

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Big GHG Differences in Small Applications
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• Increased LIHEAP Funding Will be Even More
  Critical in a Carbon Constrained World

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NATURAL GAS HOME HEATING COSTS COMPARED TO
HEATING DEGREE DAYS
Heating Degree Days
Winters
Heating Cost Source Energy Information
Administration
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Natural Gas Utilities and Electric Utilities are
Significantly and Fundamentally Different

• Gas utilities dont control combustion
• R/C emissions not growing
• Gas use per customer declining
• Gas meets essential human needs

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Residential CO2 Emissions
Source Energy Information Administration, AGA
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AVERAGE ANNUAL DECLINE IN WEATHER NORMAL GAS
USER PER CUSTOMER
2004 AGA Energy Analysis Patterns in
Residential Natural Gas Consumption, 1980-2001
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STATES WITH NON-VOLUMETRIC RATE DESIGNS FOR
NATURAL GASAS OF AUGUST 2007
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SUMMARY

• Increase Supply
• Increase New Generation Diversity
• Increase Direct Use
• Increase LIHEAP
• Increase Recognition of Gas Electric
  Differences
• Increase Conservation Efficiency

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• THANK YOU!