American Public Gas Association

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American Public Gas Association
The Voice Choice of Public Gas
FGU/ APGA The Impact of Climate Change on
Natural Gas Prices FGU Annual Conference St.
Petersburg, FL June 11, 2008
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What is APGA?

• 948 Public Gas Systems in 36 states.
• gt5M Customers
• 21,000 Employees
• 120,000 Miles of Main
• Systems size (Meters) 37 to 500,000
• Largest cities Philadelphia, San Antonio,
  Memphis, Richmond, Colorado Springs
• Town of Red Bird, OK (37 meters)

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Florida Municipals

• 31- Public Gas Systems
• Serving 237,000 customers
• Sizes - From 348 meters to 46,000 meters
• 8 systems gt 5,000 meters
• 7 systems lt 1000 meters
• FGU Members 14 systems
• APGA Members - 29 systems (12 from FGU)

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Priority 1

• The Safe and Reliable Delivery of Affordable
  Natural Gas

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APGA Advocacy

• Current Issues
• Market Transparency - Now the Law!!
• Climate Change Todays Discussion
• Pipeline Safety (DIMP)
• Methane Hydrates The path to energy security
  and independence.

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Climate Change

• S. 2191, Warner-Lieberman, CT
• Reduce emissions to 2005 levels by 2012
• By 2050, 70 reduction below 2005 levels
• Applies to all sectors
• S. 1766, Bingaman-Specter
• Reduce emissions to 2006 levels by 2020
• By 2030, emissions reduced to 1990 levels
• Applies to all sectors

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Climate Change

• THIS YEAR No Legislation
• NEXT YEARLegislation
• 2009 will see
• 1. More Democrats in House Senate
• 2.The New President Supports Legislation

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Climate Change

• Legislation Presents Opportunity
• 1. To Increase the Direct Use of Natural
  Gas, and
• 2. Achieve Energy Independence
• Opportunities We Must Not Squander

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Bottom Line

• Oppose over-reliance
• NG for EG
• LNG
• Support More Direct Use of Natural Gas
• NG is part of the solution
• Do not penalize more direct use
• Keeping Public Gas Systems Free of Burden
• Support Manhattan-Like Project on Methane
  Hydrates

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Climate Change

• Natural Gas Supply
• Fuel Switching
• Increased Unit of Demand Increased Unit of
  Supply
• Energy Efficiency
• Cap Trade / Carbon Tax
• RD
• Methane Hydrates
• LIHEAP

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Fuel Switching

• Natural gas is the choice gt80 of new electric
  capacity
• EIA forecast
• NG demand will grow 22 between now and 2030
• gt62 increase for electric generation
• (EIA Annual Energy outlook 2006).

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Unit for Unit

• For each unit of demand created by climate change
  legislation
• Congress must accommodate a matching unit of
  supply

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Energy Efficiency

• Increase direct use of natural gas
• Converting electric resistance water heaters to
  natural gas (in homes with natural gas service)
  would significantly reduce emissions and, reduce
  demand for more power plants.
• Address how energy is measured
• Site v. Source.

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Energy Efficiency

• Increased direct use of natural gas in
  residential and commercial (RC) applications
  can
• Increase the productivity of available energy
  supplies
• Reduce overall energy cost, and
• Reduce related CO2 emissions in all scenarios
  considered.

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AG Foundation (4/08)

• The increased direct use of natural gas for RC
  applications rather than for power generation
  will decrease energy consumption.
• A shift of 7 of the total electric load to
  natural gas for serving RC applications (space
  heating, water heating, cooking, and clothes
  drying), would save from 1.25-2.00 quadrillion
  Btu in 2030.

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APGA APGA RF Study

• GTI and SAIC will execute NEMS runs under three
  scenarios to show the percentage of the CO2
  reduction associated with a reduction of
  electricity consumption through the switch of
  residential and commercial appliances / equipment
  to natural gas.
• National Energy Modeling System

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APGA APGA RF Study

• Scenario 1 Phased-in switch to natural gas
  appliances/equipment by 2030
• Scenario 2 Phased-in switch to natural gas
  appliances/equipment by 2020 and,
• Scenario 3 Expedited switch to natural gas
  appliances/equipment by 2012

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Expected Study Results

• Emission reductions from reduced electricity
  demand (and reduced oil use)
• Cost reductions potential savings for economy
• Comparative cost benefits and potential savings
  of increasing direct gas use relative to
  comparable nuclear, or new technology-based
  generation (e.g., sequestration) to meet the
  nations CO2 reduction goals
• The projected level and timing of new electric
  generation capacity needed and the projected fuel
  mix to meet the new electric generation needs
  and
• Projected price of natural gas and electricity.

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Cap Trade

• APGA Supports CT Allowances Being Used To
• 1. Provide tax credits for the purchase of
  natural gas appliances to replace less efficient
  electric appliances
• 2. Offset the energy costs of low and middle
  income consumers
• 3. Provide funding for RD that paves our way
  into a future of energy independence, energy
  security, and fuel diversity.

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Methane Hydrates

• Estimates of MH within US boundaries gt200,000
  Tcf
• US consumes 22 Tcf / year
• Since the beginning of time, man has
  intentionally burned lt5,000 Tcf
• Where is Manhattan-type Project?

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Scientists see big gas potential under Bering Sea
(GD 04/24/08)

• A federal scientist believes the Bering Sea
  between Alaska and northeastern Russia holds
  methane hydrate reserves equivalent to all
  remaining onshore gas reserves in the US
• US Geological Survey discovered several methane
  hydrate-bearing structures beneath the ocean
  floor in the deepest part of the sea. Theyve
  very large and there are lots of them, he said.
  of MH within US
• DOE estimates that worldwide reserves of such gas
  which geologists have yet to tap commercially
  could exceed 400 million Tcf (GD 4/23).

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Hydrate Timetable

• When will significant Hydrate production occur?
• How badly do we
• want the gas?

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LIHEAP

• Any climate change legislation will impact prices
• Americans hardest hit are least able to pay
  fixed and low incomes
• As prices rise, LIHEAP is diminished
• Congress must reinvest some CT revenues to
  support LIHEAP

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2008 Annual Conference

• August 3 7
• Hyatt, Monterey, CA
• Why?
• Substance
• Style, and
• Fun!!!

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Questions?

• Bob Beauregard
• [phone]
• bbeauregard_at_apga.org