Natural gas supply will be more than adequate this winter in the U.S.
The Natural Gas Supply Association and American Gas Association made that forecast last week in a joint Washington, D.C., news conference as they released separate studies on the state of the U.S. gas market.
Mike Baly, AGA president, said supplies will be adequate even if 1 month sets a record for cold weather.
AGA said an estimated 2.565 tcf of gas will be available in January 1993, compared with record demand of 2.426 tcf set in January 1979.
AGA said January 1993 gas supplies likely will be 1.57 tcf from conventional production, as much as 820 bcf from storage withdrawals, as much as 200 bcf from Canadian and liquefied natural gas imports, and a small volume from peak period supplements such as synthetic natural gas and propane/air.
It said 98% of the local distribution companies (LDCs) responding to an AGA survey reported they have been diversifying their gas supply sources for the past 2 years.
Baly said, "The natural gas industry is responding to lessons learned during the severe freeze of December 1989. All industry segments have improved their systems in order to minimize the effects of severe stress on winter heating season deliverability.
"LDCs have been able to diversify their supplies thanks to new pipeline and storage construction, and producers have improved the reliability of their facilities against unforeseen stress such as freeze-offs.
"Electronic control and real time measurement have improved the accountability and reliability of pipeline deliveries, and storage has become an increasingly reliable tool in providing service during peak periods."
AGA said 77% of its 17 pipeline company respondents reported major additions to their pipeline systems, and 70% reported improvements in real time measurement.
Producers told AGA extra pipeline capacity has tended to equalize prices among supply regions, but transportation mechanisms have not been tested under the stressful conditions of a cold winter month.
NGSA STUDY
Nicholas Bush, NGSA president, said from 1990 to 1991 the utilization of gas productive capacity rose slightly-to 84.5% from 84%.
"These utilization levels are 6-7% below the maximum practical level at which these fields can be produced," Bush said. "This indicates that sufficient spare capacity remains available to supply foreseeable gas consumption levels."
An NGSA survey also shows that during 1988-91 the average Lower 48 capacity utilization gradually but steadily increased to 84.5% from 81%.
"This means that gas producers are using their capital in a more efficient manner," Bush said. "Greater efficiency lowers costs, thereby improving producers' economic ability to meet the nation's gas needs."
He said Federal Energy Regulatory Commission's orders restructuring the interstate gas pipeline industry also have helped supply and demand move closer into balance.
"An analysis performed in conjunction with this year's survey concludes that from 1988 to 1991 the gas deliverability surplus declined from 10% of capacity to 6.5% of capacity. The industry is becoming lean, efficient, and streamlined to the benefit of producers and consumers."
NGSA said 155 companies, representing about 65% of Lower 48 gas production, responded to its survey.
During 1991, survey respondents' ability to inject gas into the pipeline grid fell by 822 MMcfd or 2.3%, but this was largely matched by a corresponding 1.7% decline in annual natural gas deliveries.
The study said productive capacity that cannot be delivered into the gas transmission system fell 38% in 1991, so the unconnected capacity dropped from 6.8% of total Lower 48 capacity to 4.4%.
It said, "This shrinkage marks a significant departure in the industry practice of maintaining an unconnected capacity inventory of about 7%."
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