American Gas - May 2014 - (Page 16)

by the numbers "A revolution is transforming how the U.s. produces, delivers, and consumes energy," opens the 2014 Sustainable Energy in America Factbook, published by Bloomberg new energy Finance. much of that revolution is attributable to natural gas. The Factbook was produced by BneF for the Business council for sustainable energy, which counts AGA among its members. Industrial 70 58.6 57.4 59.7 60.8 50 Bcf/d 60 8.6 8.5 8.5 8.7 40 13.4 13.1 13.1 13 30 Power 64.1 64.9 8.1 8.8 11.5 13.4 19.6 10 18.3 16.9 17.9 18.4 18.3 18.8 20.2 20.8 25 22.7 2009 2010 2011 2012 2013 0 Source: BNEF COAL PLANT RETIREMENTS, 2011-2013 16 AmericAn GAs may 2014 1.0 Source: BNEF 2012 2010 2008 2006 2004 2002 2000 1998 1996 1994 1992 0 NATURAL GAS PRODUCTION, CONTINENTAL U.S. Production is outpacing demand, but consumption will rise as coal plants retire, manufacturing sites begin operation, and LNG terminals start exports, BNEF says. Production was up 0.6 percent in 2013, compared to 7 percent in 2011 and 2012. The fastest-growing dry-gas play was the Marcellus (symbolized by the "Eastern U.S." in this chart), which more than offset declines in dry gas elsewhere. Producers also turned to liquids-rich plays such as Eagle Ford in Texas and the Bakken in Montana and North Dakota. Rising gas prices could drive higher production going forward. 68 66 64 62 60 58 56 54 52 Dec '09 16 14 12 10 8 6 4 2 0 EASTERN US ALL OTHER Jun '10 Dec '10 Jun '11 Dec '11 Jun '12 Dec '12 Jun '13 Dec '13 Source: BNEF Announced Retired 0-250 250-500 500-750 750-1000 1000-1250 1250-1500 1500-1750 Source: BNEF Alex reArdon Nearly 14 GW of coal generation has been retired since January 2011. Another 32.5 GW in retirements has been announced. The shuttering of coal stations is being driven by aging facilities, thinner margins compared with natural gas, and tightening EPA regulations. Chief among them is the Mercury and Air Toxics Standards, which goes into force in 2015. The result will be "increased reliance on new and existing gas plants for both mid-merit and base-load power generation," according to BNEF. 1.5 0.5 20 2008 20 Distribution The U.S. pipeline system has grown continuously since 2003. Spectra Energy brought into service an 8-mmcf/d pipeline to serve New York and New Jersey, the region's first major capacity addition in more than a decade. Expansion and safety upgrades have resulted in a greater proportion of plastic and protected-steel pipe. For interstate transportation, companies are shifting from large greenfield build-outs to discrete capacity additions that connect new supply. Still, there remains a scarcity of takeaway capacity in key production areas. Bcf/d Residential Services 2.0 Bcf/d Commercial 2.5 1990 Gas production and consumption hit all-time highs in 2013, though demand was up only slightly, BNEF says. Demand fell 9 percent in the power sector, the result of a record mild winter. Gas generated 28 percent of electricity in 2013, down from 31 percent in 2012 but up 27 percent since 2007. Residential customers expanded, though energy efficiency left demand flat in the residential and commercial sectors. In transport, natural gas use is up 33 percent since 2007. Future growth will come from power and industry. Six ethylene and other gas-intensive plants were restarted or expanded in 2013. U.S. NATURAL GAS PIPELINE Millions of miles U.S. NATURAL GAS DEMAND BY END USE

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American Gas - May 2014