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The New England Natural Gas Market
Natural gas provides approximately 22 percent of New England’s primary energy needs and serves 2.4 million customers. Even though oil still heats approximately 50 percent of the region’s homes, natural gas now heats one-third of all homes in New England.
The market share of natural gas across all sectors has increased approximately 15 percent since 1990. Gas-fired electric generation is primarily responsible for the increased use of natural gas in New England’s energy market, with gas representing 40% of the market. Lower facility costs and air quality considerations have made natural gas the fuel of choice in the retro-fitting of older generating facilities and the construction of new generation capacity since the mid-90s.
During this same period, limited additional infrastructure has been constructed to support the increased natural gas demand. New England has no native supply of natural gas, but pipelines deliver gas from four separate sources: eastern and south-central United States, western Canada, Sable Island in eastern Canada, and an LNG terminal in Everett, Massachusetts, near Boston, one of only four liquefied natural gas import terminals in the contiguous United States.
Gas Demand
The 2008 Energy Information Administration (EIA) Annual Energy Outlook forecasts annual natural gas consumption in New England to grow at a rate of 0.7% per year, the second highest regional average in the forecast. Total consumption is estimated to grow from approximately 740 Bcf in 2006 to 900 Bcf in 2025, or 22%.
Gas Supply
The New England natural gas supply infrastructure is comprised of interstate pipelines that transport natural gas from sources of supply to the point of use or storage, storage facilities that augment local natural gas supplies, local distribution networks that provide service to individual customers, and the Everett terminal, which serves as a source of supply for Boston and the surrounding region.
LNG provides about 20% of New England’s annual gas supply and nearly 30% of peak day supply. Distrigas increased installed vaporization capacity from 0.435 to 0.70 bcf/day. An additional 0.25 bcf/day is committed to the nearby Mystic power plant, with a capacity of 1,550 MW.
Nova Scotia Gas Production and Supply to the Northeast
Most industry analysts, including current offshore operators in Nova Scotia, agree that even with the addition of the proposed Deep Panuke field, they do not expect Sable Island to maintain current production levels beyond 2015.
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