Natural gas is a key source of energy for the Northwest. In addition to direct use in homes and businesses as a fuel for space and water heating, gas is also an important fuel for many large and small-scale industrial processes. On the power front, gas-fired power plants provide baseload electricity, peaking capabilities, and help integrate renewable wind onto the grid.
We are in an era of abundant natural gas supply. The US sits atop large gas reserves and now with advances in technology and technique (hydraulic fracturing of shale and horizontal drilling), natural gas production in the US (and Canada) is at an all-time high. With the low gas prices and the retirement of older coal and nuclear power generation facilities, demand for gas-fired power generation has continued to grow. Natural gas exports to Mexico via pipeline and Liquefied Natural gas (LNG), and LNG exports to Asia and Europe are also a source of demand growth.
However even with copious gas supply, prices remain subject to volatility. In recent years, the Northwest has experienced price volatility due to weather induced “freeze-offs” and major pipeline disruptions. See the later sections British Columbia Pipeline Rupture and Fire, and Natural Gas Price Volatility for information on supply disruptions.
As coal recedes from the power generation sector, the greenhouse gas emissions resulting from the use of natural gas has gained scrutiny. The primary component of natural gas, methane (CH4), is a highly potent greenhouse gas. Methane that is released directly to the atmosphere is one of the biggest issues currently facing the natural gas and oil industry. Recent studies indicate that the natural gas supply system may be releasing more methane than previously thought. The Council has studied the upstream methane problem and is including upstream emissions in its planning.
Roughly every two years, the Council publishes a long-term natural gas price forecast. The forecast for the 2021 Power Plan was completed and published in the Fall of 2019. The Council’s reference price forecast is developed from a combination of quantitative and qualitative analysis and is directly influenced by input from the Natural Gas Advisory Committee (NGAC).
The term Natural Gas Price Forecast is broad, however, and can mean different things to different customers. Gas prices factor into much of the Council’s modeling work, touching on load forecasts, electricity prices, resource costs, resource strategies, and energy efficiency levels.
The table below summarizes the different forecast time series, how they are developed, and where they are used.
Natural Gas Price Forecast
|* note: all forecast data streams include a medium, low and high price forecast and are on a monthly basis through 2045
|Where it’s developed
(Link to Excel files below)
|Where it’s used
|Gas Hub Price Forecast
|Forecasts for Henry Hub, Northwest hubs Sumas, AECO, Opal, and all WECC-wide hubs
|Electric Price Forecast (Aurora) and provides the reference data set for all other forecasts
|Delivered Gas Price Forecast to NW Power Plants
|Expected fuel prices regional power plants will see over the next 20 years
|RPM and resource costing in MicroFin
|Delivered Gas Price Forecast to the City Gate
|Expected fuel prices at the city gate – for end use consumption
|Fixed Fuel Cost
|Forecast of fixed fuel costs for regional power plants