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Natural Gas Met the Challenge of Winter 2013-2014

Natural Gas Met the Challenge of Winter 2013-2014

Record Demand Served During Sustained, Widespread, Extreme Cold 

News Release

March 27, 2014 - Washington, DC

Background: According to the National Climatic Data Center, energy demand in the continental United States was 27 percent higher than average this winter. Numerous cold Arctic air outbreaks impacted the Midwest throughout the winter and seven Midwestern states experienced a top ten cold winter. The Northeast, High Plains and the South were colder than normal with frequent spells of unusual cold and snow. According to Bentek Energy LLC, peak day natural gas consumption in January 2014 was 20 Bcf per day more than normal, leading to total consumption that month reaching nearly 3,200 Bcf—a 500 Bcf increase compared with average consumption for January during the past ten years. Weather-driven residential and commercial demand exceeded 65 Bcf per day for eight days in January alone, representing extraordinary demand load.

The natural gas industry performed reliably in the face of colder than normal temperatures and numerous record-setting demand days this winter, the industry’s Natural Gas Council (NGC) said today. 

Much of the nation experienced extreme, sustained cold weather during the winter of 2014. Freezing temperatures frequently covered large portions of the United States at once, placing exponentially greater pressure on peak-day demand for natural gas, with little recovery time between cold spells. 

As the natural gas traveled along the supply and delivery chain, each segment of the natural gas industry played a key role in helping to ensure that customer demand was met.  

Barry Russell, president and CEO of the Independent Petroleum Association of America (IPAA), said, "The shale technology revolution has made record amounts of natural gas available to the domestic market. For the first time in 25 years, we are producing more than 94 percent of the nation’s natural gas from resources here at home. Even during one of the nation’s coldest winters, this abundance has created a dependable, domestic supply of fuel for American households, electric power generation, as well as growing industrial and transportation markets." 

Marty Durbin, president and CEO of America’s Natural Gas Alliance (ANGA), said, "One lesson we learned from this record-breaking cold winter is that the resource is there to meet growing demand if the investment is there to get it to market. Natural gas prices on the Henry Hub stayed relatively low in comparison to past extreme weather events, because we now have so much natural gas from geographically diverse regions of the country." 

Natural Gas Supply Association (NGSA) President and CEO Dena Wiggins, said "The industry was put to the test and rallied to ensure supply for firm pipeline customers and help non-firm customers make last-minute arrangements for supply to the extent possible. Although city-gate prices increased in the coldest regions, where pipeline capacity constraint is prevalent, wholesale price increases at Henry Hub were muted compared with pre-shale gas cold spells. And a glance at the forward price strip shows natural gas priced below $5 as far out as 2017, reflecting the market’s confidence in the ability of the industry to meet future demand." 

Don Santa, president and CEO of the Interstate Natural Gas Association of America (INGAA), said, "Even under extraordinarily challenging conditions, the nation’s interstate natural gas pipelines performed well this winter, providing reliable service to firm shippers. However, this winter highlighted the costs to natural gas and electric consumers that can result from pipeline capacity constraints and the need for additional pipeline infrastructure in certain regions, such as New England." 

"The 2014 record-setting winter with prolonged cold temperatures and peak demand conditions has demonstrated the readiness and resiliency of America’s natural gas network. Natural gas utilities work all year to prepare for these types of cold temperatures, and employ a portfolio approach to help ensure they can meet the needs of their customers at affordable prices. Providing this kind of safe and reliable service has been not just the core business, but the mission of natural gas utilities for decades," said Dave McCurdy, president and CEO of the American Gas Association (AGA).

The Natural Gas Council collectively represents nearly all companies that produce, transport and distribute natural gas consumed in the United States. It includes members of the American Gas Association, America’s Natural Gas Alliance, the Independent Petroleum Association of America, the Interstate Natural Gas Association of America and the Natural Gas Supply Association. 

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