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NAESB Board Meeting September 21, 2006 Natural Gas Pipeline Regional Disruption Project.

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Presentation on theme: "NAESB Board Meeting September 21, 2006 Natural Gas Pipeline Regional Disruption Project."— Presentation transcript:

1 NAESB Board Meeting September 21, 2006 Natural Gas Pipeline Regional Disruption Project

2 2 Background Original Northeast Study Response to FERC, DOE inquiries in wake of September 11 Analysis of resilience of natural-gas network to capacity loss April 02-December 02Industry study of NortheastEnergy and Environmental Analysis, under contract to AGA and INGAA February 03Presentation to NARUC select committees DOE - GTI Regional Gas Disruption Project September 03 Start of the DOE – GTI effort

3 3 Key Elements of the DOE-GTI Project Sponsor: The Department of Energy/Office of Electricity Delivery and Energy Reliability (OE) (Contractor: GTI; Sub-contractors: SAIC (Managing sub-contractor), Energy and Environmental Analysis, Inc, Navigant Consulting, Inc. and Bruce Ellsworth) Funding: Has been provided by DOE, TSA and FERC. TSA plans to provide substantial funding in the next phase of the project, primarily for the study of the Southwest/Gulf Production Region. Tasks: (1)Assess the capabilities and resiliencies of the natural gas markets within the different regions of the nation to withstand disruption in natural gas deliverability, and (2)Examine implications in the event of a disruption, including for gas-fired electric generation. Objective: Provide information and analyses to assist development of effective policies and action plans to assure natural gas deliveries in the face of potential disruptions. Steering Council: – Comprised of government, industry and consumer representatives to guide project. Federal government: DOE, NETL, FERC, DHS/TSA, PHMSA, DOD State government: NARUC (Three commissioners and staff), NASEO Gas Industry: AGA, INGAA, NGSA and IPAA Industrial/Electric Consumers: PGC, NERC and EEI

4 4 The Basic Questions How much short-term capacity loss can be responded to by market forces? How much short-term capacity loss can be accommodated by existing emergency- response mechanisms? Within such mechanisms, what is the interaction with the electric industry?

5 5 Studies Show the Flexibility of Regional Markets Flexibility (via fuel switching, optimal use of peak shaving and storage facilities) of the regions natural gas market in different weather temperatures to absorb facility losses and efficiently reallocate gas supplies in the event of a major pipeline disruptionunder two scenarios: 1. Full Daily Load: Shows how much capacity could be lost and normal market operation still provide gas to everyone in the region willing to buy it regardless of price. -- Provides an indicator of the level of disruption that the regional market could withstand before curtailment plans would need to be implemented. 2.Essential Human Needs Only: Shows how much capacity could be lost and still provide service for only essential human needs in the region - - service to only high- priority customers, such as home heating, as determined under state emergency curtailment plans. - - Provides an indicator of the level of disruption that the regional market could withstand before curtailment would be insufficient to satisfy essential human needs only requirements. Avoid System Re-light: Primary operational concern for the natural gas industry and maintaining the integrity of the system. -Costly, time consuming and potentially dangerous. -The essential human needs percentage identifies the capacity loss that the market can withstand before this critical threshold is crossed.

6 6 Status: All Market Regions have been Studied - - All Market Region Reports will be Final in September 2006 1.Northeast Region: (New England States, New York City, New Jersey, Eastern Pennsylvania (Philadelphia area) and the Baltimore/Washington, DC area) 2.California and Western States Region: (California, Arizona, Nevada and Idaho) 3.Southeast Region: (Virginia, North Carolina, South Carolina, Georgia and No. Alabama) 4.Upper Midwest Region: (Minnesota and Wisconsin) 5.Pacific Northwest Region: (Oregon and Washington State) 6.Florida 7.Inland Northeast: (State of New York, except NYC, and Western Pennsylvania) 8.Ohio Valley Region: (Ohio, West Virginia, Kentucky, and Tennessee) 9.Midwest Region: (Illinois and Indiana) 10.Central US Region: (Missouri, Iowa, Nebraska and South Dakota) 11.Michigan

7 7 Northeast Gas-Electric Interdependency Study Objective: Under curtailment scenario, determine the impact on electric reliability of loss of gas supply to generators in New York City and in New England – Valuable insight to assist in gas curtailment planning Value to Create: Provides information and structure to assist federal and State government officials and regulators in communications with the ISO as to possible adjustments in emergency response protocols, to preserve electric reliability during crises – ISO pass-back will help to refine the gas service percentages

8 8 Gas-Electric Interdependency Progress Initial Report and preliminary conclusions provided to DOE and others Final Report to DOE expected in September Initial identification of individual generators at risk of fuel loss Requires follow-up by government officials with NERC, ISOs to determine impact on grid

9 9 Production Regions Methodology: Three levels of determinations: 1.Determine level of disruption that major population centers within the region could withstand. 2.Determine impact of disruptions on downstream markets. ­Analysis quantifies the amounts of capacity exiting the area that are critical for downstream markets. 3.Determine where disruptions are most problematic. ­Main objective is to determine where disruptions to facilities could have the greatest impact on consumers. ­Considers disruptions to specific processing plants, compressor stations or pipeline constraint points, and storage fields. Regions: Rocky Mountain Production Region -Initial analysis completed; Final Report in September 2006 Southwest/Gulf Coastal Production Region -Analysis expected to start October 1, 2006

10 10 Proposed Next Steps 1.Southwest/Gulf Production Region Study Final regional study Start by October 1, 2006; Final Report by September 2007. 2.Florida Limited Gas – Electric Interdependency Review Optional review in New York State 3.Communications: Pass-Back and Engage Stakeholders DOE, with guidance from the Steering Council, is considering how best to inform and engage key stakeholders on the study results for their region. ­The reports contain security sensitive information and necessitate care in handling May need NAESB assistance

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