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The Florida Natural Gas Association
Natural Gas Fueling Florida’s Future
Florida Natural Gas Association presentation to the
Florida Gas Utility Annual Convention
June 11, 2008
Meeting Florida’s Energy and Climate Change Challenges
Recent State Policy Issues and Initiatives The Role for Natural Gas in Florida’s Future Natural Gas Expansion to Serve More Florida Consumers
Reliable Natural Gas Supply Expanded Gas Delivery Capability Environmental and Consumer Benefits of the Direct Use of
Natural Gas Gas Industry Policy Recommendations
Retail Use of Natural Gas: Part of the Solution – Not Part of the Problem
Energy and Climate Change Policy Initiatives Governor’s Executive Orders (07-127 and 07-128)
Carbon emission reductions for electric generation: 2000 levels by 2017; 1990 levels by 2025.
15% increase in stringency for Florida Energy Code. Governor’s Action Team on Energy and Climate Change
proposed additional measures to Legislature.
2008 Florida Legislature (HB 7135) Legislative Florida Energy Commission becomes the
permanent Florida Energy and Climate Commission. Carbon Emission reductions for Electric generators. Electric Generation Carbon Emission Cap and Trade Program
– DEP to develop rules. Renewable Portfolio Standard for generators. Increased Electric DSM programs. 50% increase in Energy Code stringency by 2019.
The Role for Natural Gas in Fueling Florida’s Future
Continued expansion to serve electric power generation. Increased use of compressed natural gas (CNG) as a clean
motor fuel. Expand natural gas service to retail end-users: lower electric
generation needs and reduce carbon emissions. 700,000 existing natural gas residential customers in Florida. 47% existing main saturation. 770,000 potential customers on main not using gas Convert potential customers to gas tankless water heating.
• 2.1 Billion Pounds of Carbon per year eliminated.• 571 MW of electric generating capacity avoided.
100K to 200K new homes constructed each year offer additional savings opportunities.
Reliable Production and Transmission
Drilling activity is at a 20 year high – (U.S. reserves are growing – but most new production areas are distant from the market in Florida).
No expansion of Gulf off-shore exploration areas. Gulf Coast production is decreasing while Western and Mid-
Continent production and LNG supply capability is increasing.
Increased quantities of Gulf Coast gas will be available for Florida as new Western supply moves to the Northeast and Mid-West.
Gas industry has a long history of investment and expansion in transmission and distribution systems to meet Florida consumer and power generation demand growth.
Reliable Production and Transmission
Several current Interstate pipeline expansion projects will deliver new gas supply into Florida.
Interstate pipelines are increasing on-shore supply interconnections to help mitigate storm impacts on supply deliveries.
Gas storage capacity is significantly increasing. Florida gas distributors are supporting increased supply
reliability by committing to supply, storage and transmission contracts.
Expanded production, term contracting and enhanced fuel risk management programs will help stabilize natural gas prices.
Reliable Natural Gas Supply
Production Increase
Production Decline
North American Production Basins
Regional Supply Mid Term Growth
U.S. supply growth offsets Canadian decline
Rocky Mountains, Mid Continent, Fort Worth,and Arkoma Basins represent high potential areas
26
14
21
18
16
17
24
3
4
6
87 75
11
910
22
Liberty 400 MM/dIn Service
Pine Prairie400 MM/dIn Service
Bay Gas1.2 Bcf/d
2008MoBay600 MM/d
2009Southern Pines
1.2 Bcf/d2008
EganEgan
DukeDuke
BridgelineBridgeline PetalPetalBay GasBay Gas
Existing Storage Connections
New / Expanded Storage Connections
Note: Direct Access Storage in AL & MS will have delivery capability > 2.15 Bcf/day
Underground Storage Serving Florida
26
15
14
21
20
19
18
31
30
27
16
17
24
3
4
6
87 75
12
11
910
13
22
SempraCameron1.5 Bcf/d
2008
Elba/Cypress.340Bcf/d/FLA
In-Service
Port Dolphin.8 Bcf/d
2011- 2012(Early
Development)
Kinder Morgan P/L Cheniere Sabine
Pass2.6 Bcf/d
2008 -Construction
McMoranMain Pass Energy
Hub1 Bcf/d
Gulf LNGPascagoula1.5 Bcf/d
2009 - 2010
Exxon
Golden Pass
1Bcf/d
2009
Exxon
Golden Pass
1Bcf/d
2009
Lake Charles
3.0 Bcf/d
In Service
Lake Charles
3.0 Bcf/d
In Service
Suez
Calypso
1.0 Bcf/d
2011 - 2012
Suez
Calypso
1.0 Bcf/d
2011 - 2012
Gulf Coast LNG Projects
FloridianIndiantown
.8 Bcf/d2012
Expanded Gas Delivery Capabilityinto Florida
Enbridge East Texas Expansion
Texas
OklahomaCharlotte
SNG
SCANAAGL
FGT
SONAT Cypress Pipeline - Project
Phase I – In service May 2007 166 mile 24 in. pipeline 220,000 MMBtu/d
Phase II – In service May 2008 10,350 hp compression 336,000 MMBtu/d FGT operational capacity at
interconnect is 265,000 MMBtu/d
Phase III – 2010-2012 20,700 hp compression 500,000 MMBtu/d
Phase IICompression
Phase IIICompression
Florida Gas Transmission
Initial In-Service – 1960
252 Delivery Points 156 LDC 30 Industrial 58 Electric
Generation
Contracted Capacity
Winter – 1.9 Bcf/d Summer – 2.2 Bcf/d
FGT Phase I-VII System Expansion Projects (Capacity in Bcf/day)
0
0.5
1
1.5
2
2.5
1987 1991 1995 2001 2002 2003 2007
Phase I
Phase IIPhase III
Phase IV
Phase VPhase VI
Phase VII
FTS-1 FTS-1
FGT Onshore Gas Supply
TX
LA
MSAL
GA
FL
MidcontinentSupply
Onshore LAProduction
S. Te
xas
Prod
uctio
n
SESH
Enbridge
Bay Gas &Southern Pines
Storage
Midcontinent
& West Texas
Supply
FGT Onshore Gas Delivery Capability
Receipt PointVolume
Capability(MMBtu/day)
Production Area Start Date
Crosstex 75,000 South Texas Onshore & Black Warrior Basin (MS)
Pre-Katrina
HPL (Magnet Withers) (Texoma)
100,000 120,000
South Texas Onshore , Permian & Mid-Continent
Pre-Katrina
Tejas 60,000 South Texas Onshore Pre-Katrina
NGPL (Jefferson) (Vermilion)
60,000 285,000
Mid-Continent & Onshore Louisiana
Pre-Katrina
Enbridge 200,000 Mid-Continent August 2008
Gulf South (Boardwalk) 300,000300,000
Onshore Louisiana Pre-KatrinaPost-Katrina
Southeast Supply Header (SESH)
1,200,000 Mid-Continent August 2008
Bay Gas Storage* 600,000400,000
Mississippi Salt Dome Pre-Katrina2008
Southern Pines Storage* 1,000,000 Mississippi Salt Dome 2008
Total 4,700,000
* Max. Deliverability for 4-5 Days
Gulfstream Natural Gas System
Initial In-Service – 2002
20 Delivery Points 3 LDC 17 Electric
Generation
Contracted Capacity
2006 - .75 Bcf/d 2008 – 1.1 Bcf/d 2009 – 1.25 Bcf/d
Gulfstream Onshore Gas Supply
Gulfstream Supply InterconnectsSupply Growth (Bcf/d)
• Storage improves reliability for hurricane vulnerable offshore supply
• SESH, Transco and other projects provide increased volume, liquidity, reliability
• Future LNG terminals may provide incremental supplies 2010+
2.23 3.80
Total Supply Interconnect Capacity 3.42 5.65 9.45
2006 Contracted Proposed 2007-2008 2009+
Southeast Supply Header 1.03+
MoBay Storage 1.00Transco (includes SGR Storage attachment) 0.20
Gulf LNG or Chevron Cassotte Landing, Pascagoula, MS 1.30Suez Calypso LNG, offshore Ft. Lauderdale 1.00Hoegh LNG, Port Dolphin, offshore Tampa Bay 1.50
Destin 1.00
DIGP System 0.32Mary Ann Plant 0.22Gulf South 0.32MBPP 0.63Transco 0.40Williams Plant 0.53 New Domestic Additions
Potential LNG Additions
Energy Information AdministrationAnnual Energy Outlook 2008
Natural Gas Supply and Consumption Forecast
2005 2010 2020 2030
Supply (Tcf) 21.75 23.30 23.28 22.68
Consumption 22.01 23.25 23.23 22.72
Environmental and Consumer Benefits of
Expanding the Direct Use of Natural Gas
Fuel Emission Levels
Pounds per Billion Btu of Energy Output
Pollutant Natural Gas Oil Coal
Carbon Dioxide 117,000 164,000 208,000
Carbon Monoxide 40 33 208
Nitrogen Oxides 92 448 457
Sulfur Dioxide 1 1,122 2,591
Particulates 7 84 2,744
Mercury 0.000 0.007 0.016
Source: EIA – Natural Gas Issues and Trends
Residential Appliance CO2 Emissions
Direct Use of Natural Gas Implications for Power Generation, Energy Efficiency
and Carbon Emissions
Black and Veatch Engineering study conducted for the American Gas Foundation.
Analyzed the increased use of natural gas for power generation and the resulting impact on the environment.
Analyzed the impact of increased direct use of natural gas for residential and commercial end uses.
Space heating Cooking Water heating Clothes Drying
Quantified the direct use of natural gas on: Energy Consumption Total Energy Cost CO² Emissions
Impact on Energy Consumption in 2030
Source: Energy Information Administration (EIA), B&V Analysis
Increased Direct Use Of Natural Gas Reduces Total Energy Consumed
A 50% shift of the switchable electric load to natural gas end-use can produce:
Energy Savings = 1.25 to 2.00 quadrillion Btu
Avoided Generation 126 to 160 fewer power capacity = 63 to 80 GW plants (500 Mw)
Avoided Investment costs = $49B to $122B
Impact on Energy Costs in 2030
Increased Direct Use Of Natural Gas Reduces Total Energy Costs
In the most conservative scenario analyzed:
Energy Cost Savings = $18B to $29B.
Greater than the Gross National Product of 83 nations.
Source: Energy Information Administration (EIA), B&V Analysis
Impact on CO2 Emissions in 2030
Source: Energy Information Administration (EIA), B&V Analysis, EPA
Increased Direct Use Of Natural Gas Reduces
CO2 Emissions
In all scenarios CO2 emissions decreased ranging from60 million to 200 million tons.
Annual greenhouse gas emissions from 9.9 - 33.2 million
passenger vehicles.
Carbon absorbed by 12.4 - 41.2 million acres of pine or fir trees.
Annual CO2 emissions from 4.8 - 16 million homes.
FNGA Policy Recommendations
I. Strengthen Natural Gas Supply Reliability and Minimize Commodity Price Volatility. State support for expanded exploration and production
access to natural supplies. Encourage FPSC support for LDCs seeking pre-approval
to recover costs for long-term supply contracts, risk management hedging agreements and storage and transmission agreements.
Encourage the FPSC to develop a pre-approval process and LDC cost recovery mechanism for critical supply infrastructure, peaking facilities, gas storage facilities and Compressed Natural Gas (CNG) fuel facilities.
FNGA Policy Recommendations
II. Expand Reliable Natural Gas Transportation Infrastructure. Support and expedite gas infrastructure in Florida
including pipeline expansions, LNG terminals and gas storage projects.
Support alternative methods of funding gas distribution system expansion – economic development rates, area expansion rates, special taxing districts, state-wide gas expansion fund.
FNGA Policy Recommendations
III. Expand the Efficient End-Use of Natural Gas to Improve Florida’s Energy Security and Reduce Greenhouse Gas Emissions.
Tighten the compliance stringency of the Florida Energy Code. Adopt performance standards for buildings in the Florida
Energy Code that consider greenhouse gas emissions produced in the total energy supply chain.
Adopt innovative rate designs that decouple a LDCs recovery of its fixed operating costs from consumer gas usage.
Adopt FEECA Energy Conservation Programs that promote gas appliance installations and consider carbon emission reductions.
Encourage the FPSC to allow cost recovery of LDC funded installations combining renewable energy and natural gas technologies for domestic water and space heating.
Natural Gas Will Play an Important Role in Florida’s Energy Future
Diversity in electric generation fuel mix is critical – growth in Florida will require a mix of clean coal, nuclear and natural gas to ensure reliable and affordable electric generation.
Increasing natural gas use in multiple consumer applications can reduce demand for Florida’s peak electric generation and help mitigate the need for more power plants.
Natural Gas is the best alternative available to make a significant, positive and immediate impact on the Energy Efficiency and Carbon Reduction goals established by the Governor and Legislature.
Retail use of Natural Gas is part of the SOLUTION, not part of the problem
Questions and Comments
