The American Gas Association says a concerted gas industry and national effort could back out 1.2-2.2 million b/d of U.S. oil imports by 2010.
Robert Catell, AGAs immediate past chairman, said as much as 4.5 tcf additional gas could be used without the need for extraordinary capital investments. He spoke at AGAs annual meeting in Atlanta.
He said, For instance, by 2010 a reduction equivalent to anywhere from 578,000 to 780,000 b/d could come from fuel switching among industrial plants.
Many of these plants already have natural gas burning capabilities. For them, no new equipment would be required, only a recognition of the true costs of importing oil, as well as the economic and environmental benefits of natural gas.
Catell said it is unacceptable that U.S. oil imports are due to increase from about 50% in 1995 to 75% in 2010, affecting jobs, interest rates, the stability of the dollar, and the environment.
Oil supply disruptions could cause significant price spikes at the nations gasoline pumps, he said. Again, you could see motorists lining up at their corner station, suffering through delivery bottlenecks and many other consumer headaches.
Market sectors
An AGA study said in the residential sector, 175,000-289,000 b/d, or as much as 44% of total current usage, could be converted to natural gas fuel by 2010. Achieving the higher volume would entail a very aggressive program to convert fuel oil consumers to natural gas.
In the commercial sector, 101,000-146,000 b/d, or as much as 36% of total current usage, could be switched under a very aggressive conversion program.
In transportation, 180,000-585,000, or as much as 5.4% of todays usage, could be converted. AGA said the full potential requires placing 2 million gas vehicles on the road.
And in the area of electrical power generation, 205,000-363,000 b/d, or as much as 90% of todays usage, could be converted, involving mostly heavy oil used in steam plants.
Catell, president and chief executive officer of Brooklyn Union Gas Co., said, It is critically important that America not lose sight of the fact that so-called cheap oil from abroad, whether it comes from a few or from many countries, has hidden costs that are much more far reaching than the dollar-per-barrel price.
Winter supplies
George Davidson Jr., new AGA chairman and chairman and CEO of Consolidated Natural Gas Co., Pittsburgh, said U.S. residential prices for natural gas may be slightly lower this winter.
We project that, on a national average basis, residential natural gas prices will be down 1-3% during the coming heating season, compared with last winter.
An AGA study examined potential peak month demand and concluded that abundant supplies of natural gas will be available this winter, even if peak month demand exceeds the record volume.
AGA predicts that 2.684 tcf of gas will be available during a peak winter month of 1995-96. This exceeds by 158 bcf the volume used in the record peak month, January 1994.
The study said about 60% of the 1995-96 volume will come from production, 30% from underground storage and LNG storage, 9% from Canadian gas and LNG imports, and the rest from supplemental sources.
The study examined a scenario of 2.67 tcf of demand and assumed weather 10% colder than January 1994, one of the coldest on record.
It also examined a scenario of 2.682 tcf, based on record residential/commercial consumption in January 1994 combined with the peak industrial/ electric utility consumption in January 1995, each increased 3% to account for customer growth.
Davidson said, Of course, no one would ever expect gas consumption in those markets to peak simultaneously. We simply wanted to test ourselves with a truly way out scenario. And even then, we believe we have more than enough supply.
Another AGA study compared 1994 data from its weekly gas storage report with comparable data from 1995 and found different injection and withdrawal patterns.
Davidson said, We think this clearly indicates that the traditional dynamic of how storage is used has changed in recent years. And it shows that there is no one point at which storage should be X percent full. Storage injections and withdrawals are now subject to market forces, just like the rest of the industry. Copyright 1995 Oil & Gas Journal. All Rights Reserved.