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Glowing future for natural gas if only...

By Sherry Robinson

Natural gas doesn’t get enough respect.
Two reports – one on last winter’s outage and another on the future of natural gas – make that clear.
This month independent investigator Michael Johnson verified that February’s natural gas outage, which left 28,707 customers without heat during an arctic blast, unfolded the way New Mexico Gas Company said it did.  Fancy that.
The company said at the time that freeze-outs in the Permian and San Juan natural gas basins, combined with rolling blackouts in Texas, kept producers and processing plants from delivering gas into pipelines and allowed pressure in the system to fall.
In the San Juan Basin, 20 percent of gas production was off line because of weather, Johnson reported.
In the Permian Basin, electric outages shut down compressors and plants, which had no other backup.
We now know the company shut off gas to some communities rather than see the whole system go down.
While there were some preventive measures employees might have taken, the circumstances were largely beyond their control.
The state Public Regulation Commission hired Johnson, retired chairman and CEO of Conoco Gas and Power and a New Mexico Aggie geologist, to study the disaster.
His recommendations include: Adding storage, increasing supplies, and addressing the restrictions that result in critical supply installations powered by electricity with no other backup. In addition, electric utilities should add critical installation to their priority lists (along with hospitals and schools) to assure continued power.
Some of these same recommendations appear in a major new report, “The Future of Natural Gas,” just issued by Massachusetts Institute of Technology.
Despite its importance, say experts, natural gas has been taken for granted. It’s gotten more respect lately with the growing recognition that, environmentally, it’s more desirable than coal for power generation, and it’s relatively cheap and abundant right here on American soil.
So even though the state’s natural gas producers have weathered a downturn, the future is glowing. “The role of natural gas in the world is likely to continue to expand under almost all circumstances, as a result of its availability, its utility and its comparatively low cost,” says the report.
We’ll see greater use in electricity, industry, heating and transportation. If the federal government ramps up CO2 emission regulations, natural gas will benefit because it’s the cheapest alternative to coal-fired power.
Because natural gas is cheaper than oil, it will be more in demand for transportation. As consumers embrace renewable energy, natural gas will be the backup energy source.  
The MIT team recommends more publicly financed research and public-private partnerships to improve supply and use of both natural gas and renewables. “People speak of (natural) gas as a bridge to the future, but there had better be something at the other end of the bridge,” said Professor Henry Jacoby, co-chair of the study.
Contemplate for a moment a transformation to natural gas in New Mexico. In 2008, our total energy consumption was 827.9 trillion BTUs – 34 percent from coal, 32 percent from petroleum, and 30 percent from natural gas. (Subtract exported electricity and we used 663 trillion BTU.)  
Notice that Michael Johnson and MIT both recommend increased storage and supply.
The Interstate Natural Gas Association of America estimates that the United States and Canada will need 28,900 to 61,900 additional miles of pipelines and a 15 to 20 percent increase in storage capacity.
In the two decades before 2005, storage increased 1.4 percent, while demand rose 24 percent. Currently, 53 percent of storage capacity is in five states, the closest being Texas.
Now you’re talking about regulation and NIMBY-itis, which add up to long lead times.
Today’s project was a gleam in somebody’s eye 10 years ago. Who would have envisioned, 10 years ago, the fix we found ourselves in last winter?

Sherry Robinson
© New Mexico News
Services 2011

2009 Natural Gas Production (Thousand Cubic Feet, MCF):
1 - San Juan 549,672,095
2 - Rio Arriba 364,999,420
3 - Eddy 223,082,275
4  - Lea 202,616,260
5 - Chaves 27,411,753
6 - Colfax 26,124,386
7 - Roosevelt 2,119,410
8 - Sandoval 1,249,423
9 - McKinley 73,878
Total - 1,397,348,900
Source: New Mexico Energy and Minerals Department, Annual Report, 2010