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The Florida Natural Gas Association. Natural Gas Fueling Floridas Future Florida Natural Gas Association presentation to the Florida Gas Utility Annual.

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Presentation on theme: "The Florida Natural Gas Association. Natural Gas Fueling Floridas Future Florida Natural Gas Association presentation to the Florida Gas Utility Annual."— Presentation transcript:

1 The Florida Natural Gas Association

2 Natural Gas Fueling Floridas Future Florida Natural Gas Association presentation to the Florida Gas Utility Annual Convention June 11, 2008

3 Meeting Floridas Energy and Climate Change Challenges Recent State Policy Issues and Initiatives The Role for Natural Gas in Floridas 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

4 Energy and Climate Change Policy Initiatives Governors 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. Governors 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.

5 The Role for Natural Gas in Fueling Floridas 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.

6 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.

7 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.

8 Reliable Natural Gas Supply

9 Production Increase Production Decline North American Production Basins

10 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

11 Liberty 400 MM/d In Service Pine Prairie 400 MM/d In Service Bay Gas 1.2 Bcf/d 2008 MoBay 600 MM/d 2009 Southern Pines 1.2 Bcf/d 2008 Egan Duke Bridgeline Petal Bay 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

12 Sempra Cameron 1.5 Bcf/d2008 Elba/Cypress.340Bcf/d/FLA In-Service Port Dolphin.8 Bcf/d 2011- 2012 ) (Early Development) Kinder Morgan P/L Cheniere Sabine Pass 2.6 Bcf/d 2008 -Construction McMoran Main Pass Energy Hub 1 Bcf/d Gulf LNG Pascagoula 1.5 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 Floridian Indiantown.8 Bcf/d 2012

13 Expanded Gas Delivery Capability into Florida



16 Enbridge East Texas Expansion

17 SNG SCANA AGL 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 II Compression Phase III Compression

18 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 198719911995200120022003 2007 Phase I Phase II Phase III Phase IV Phase V Phase VI Phase VII FTS-1

19 FGT Onshore Gas Supply TX LA MS AL GA FL Midcontinent Supply Onshore LA Production S. Texas Production SES H Enbridg e Bay Gas & Southern Pines Storage Midcontinent & West Texas Supply

20 FGT Onshore Gas Delivery Capability Receipt Point Volume Capability (MMBtu/day) Production AreaStart Date Crosstex75,000South Texas Onshore & Black Warrior Basin (MS) Pre-Katrina HPL (Magnet Withers) (Texoma) 100,000 120,000 South Texas Onshore, Permian & Mid-Continent Pre-Katrina Tejas60,000South Texas OnshorePre-Katrina NGPL (Jefferson) (Vermilion) 60,000 285,000 Mid-Continent & Onshore Louisiana Pre-Katrina Enbridge200,000Mid-ContinentAugust 2008 Gulf South (Boardwalk)300,000 Onshore LouisianaPre-Katrina Post-Katrina Southeast Supply Header (SESH) 1,200,000Mid-ContinentAugust 2008 Bay Gas Storage*600,000 400,000 Mississippi Salt DomePre-Katrina 2008 Southern Pines Storage*1,000,000Mississippi Salt Dome2008 Total 4,700,000 * Max. Deliverability for 4-5 Days

21 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

22 Gulfstream Onshore Gas Supply

23 Gulfstream Supply Interconnects Supply 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 2006ContractedProposed 2007-2008 2009+ Southeast Supply Header 1.03+ MoBay Storage 1.00 Transco (includes SGR Storage attachment) 0.20 Gulf LNG or Chevron Cassotte Landing, Pascagoula, MS 1.30 Suez Calypso LNG, offshore Ft. Lauderdale 1.00 Hoegh LNG, Port Dolphin, offshore Tampa Bay 1.50 Destin 1.00 DIGP System 0.32 Mary Ann Plant 0.22 Gulf South 0.32 MBPP 0.63 Transco 0.40 Williams Plant 0.53 New Domestic Additions Potential LNG Additions

24 Energy Information Administration Annual Energy Outlook 2008 Natural Gas Supply and Consumption Forecast 2005201020202030 Supply (Tcf)21.7523.3023.2822.68 Consumption22.0123.2523.2322.72

25 Environmental and Consumer Benefits of Expanding the Direct Use of Natural Gas


27 Fuel Emission Levels Pounds per Billion Btu of Energy Output PollutantNatural GasOilCoal Carbon Dioxide117,000164,000208,000 Carbon Monoxide4033208 Nitrogen Oxides92448457 Sulfur Dioxide11,1222,591 Particulates7842,744 Mercury0.0000.0070.016 Source: EIA – Natural Gas Issues and Trends

28 Residential Appliance CO2 Emissions

29 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

30 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

31 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

32 Impact on CO 2 Emissions in 2030 Source: Energy Information Administration (EIA), B&V Analysis, EPA Increased Direct Use Of Natural Gas Reduces CO 2 Emissions In all scenarios CO 2 emissions decreased ranging from 60 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.

33 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.

34 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.

35 FNGA Policy Recommendations III. Expand the Efficient End-Use of Natural Gas to Improve Floridas 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.

36 Natural Gas Will Play an Important Role in Floridas 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 Floridas 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



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