Expanding Access to Natural Gas

Despite the increasing abundance of natural gas, many small communities must rely on bottled propane, heating oil, and other more expensive fuels. The National Association of Regulatory Utility Commissioners (NARUC) has established a Natural Gas Access and Expansion Task Force to examine lack of access to natural gas pipeline service for underserved and un-served areas, particularly rural communities.

There is potential for NARUC’s new task force to identify pipeline and distribution line deficiencies, opportunities for expedited review of interstate natural gas pipeline siting, as well as alternative or unconventional approaches to reach areas in need. Importantly, community level recognition of the benefits of natural gas access may be built. Broadening natural gas access could lower energy costs for residential and business uses alike.

State level leadership and intergovernmental cooperation are critically needed. While the Federal Energy Regulatory Commission oversees interstate pipelines, NARUC’s members oversee the gas distribution through pipeline systems owned by local gas distribution companies. As the Nebraska Public Utility Commission’s current review of the Keystone XL pipeline demonstrates, states also play a critical role in determining eminent domain for siting of pipelines in many states.

The NARUC task force’s eight-month timetable wisely reflects the urgency of need and opportunity. This important endeavor is well worth the time and effort required to provide constructive input.


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          FROM THE CHART ROOM

          U.S. Energy-Related CO2 Emissions Fell Again In 2016

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          EIA expects that electricity generation fueled by natural gas this summer (June, July, and August) will be lower than last summer, but it will continue to exceed that of any other fuel, including coal-fired generation, for the third summer in a row. The projected share of total U.S. generation for natural gas is expected to average 34%, which is down from 37% last summer but still exceeds coal’s generation share of 32%. Based on data from the National Oceanic and Atmospheric Administration (NOAA), EIA estimates that average U.S. population-weighted cooling degree days in the summer of 2016 reached the highest level on record. NOAA projections for this summer indicate cooling degree days will be 11% lower than last year. These milder expected temperatures lead to forecast U.S. summer electricity generation of 1.16 billion megawatthours, which would be 2.4% lower than generation last summer. Natural gas first exceeded coal as the nation’s primary electricity fuel on a monthly basis in April 2015 and on an annual basis in 2016. During the summer of 2016, at a time when natural gas prices were relatively low, 37% of U.S. electricity generation came from natural gas and 33% came from coal. A decade before that, in summer 2006, 25% came from natural gas and 46% from coal.

          The use of natural gas in the power sector is sensitive to natural gas prices. As natural gas prices have risen, the natural gas share of the electricity generation mix has fallen slightly. Over the first three months of 2017, the Henry Hub natural gas price averaged $3.01 per million Btu (MMBtu) compared with $2.00/MMBtu during the same period of 2016. As a result, the natural gas share of the U.S. electricity mix fell from 32% in the first quarter of 2016 to 29% in the first quarter of this year, while coal’s share of generation rose from 29% to 31% over that same period. EIA expects that the Henry Hub price will continue to average slightly more than $3.00/MMBtu through the summer. To read more, visit the U.S. Energy Information Administration website.


           

           

          Michael Best Strategies’ Energy Team

          About Michael Best Strategies

          Michael Best Strategies focuses on achieving clients’ objectives through unparalleled strategy development and deployment for implementation, pragmatic guidance on public policy development, and government relations. The Strategies team specializes in a full range of services, including government relations, public policy consulting, grassroots advocacy, public affairs, conference planning, and strategic political relationships. For more information, visit michaelbeststrategies.com.