resource planning p ocess o e ieprocess overview - pnucc nw natural apr 2012 spc.pdf · gas markets...
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PNUCC System Planning Committee
Resource Planning P ocess O e ieProcess Overview
Randy FriedmanDi t G S lDirector, Gas Supply
April 13, 2012p ,
Planning Overview
Basics of the Physical System
How We Buy Gas
Hot Topics (besides Power Generation)Hot Topics (besides Power Generation)– Fracking, LNG Exports, NGVs
Planning for Uncertainty
2
Gas Markets are Interconnected
15% of U.S. gas supplies come from
Canada
NWN gets 60% of its60% of its
gas supplies from Canada
4
Source: NWGA 2010 Gas Outlook
Dth/day Therms/day
Designing our Supply Portfolio
800,000
1,000,000Dth/day
8,000,000
10,000,000Therms/day
Total Resources
600,000 6,000,000
Firm Sales
200,000
400,000
2,000,000
4,000,000
InjectionsI j ti
Pipeline ContractsPeaking
Resources
0Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
0
jInjections
Mist Production Long-term Contracts Winter Contracts
6
Station 215%
NW N t l WCSB WCSB
29%
NW NaturalAverage Winter Day
SumasAECo
2%27%
Flowing Supplies
Underground Storage
Stanfield
Rocky Rocky MountainMountain
NWN
27%
Avg. Day Winter Supply Volumes (Therms)
British Columbia (Stn 2) 580,000
Underground Storage
Malin
Opal
Mountain Mountain BasinBasinAlberta 1,150,000
Rockies 1,100,000
Jackson Prairie 100,000
Mist Storage 1 070 000
San JuanSan JuanBasinBasin
27%Mist Storage 1,070,000
Portland LNG 0
Newport LNG 0
Plymouth LNG 0
Topock PermianPermianBasinBasin
Total 4,000,000
Assumes that storage is 100% full on Nov 1.
7
Managing Price Volatility
UnhedgedUnhedged25%
Gas Reserves Financial
Mist Prod.2%
Gas Reserves3% Hedges
51%
Storage2% Storage19%
Financial Hedges = Swaps and Options9
The “Fracking” Controversy
Proper Well ConstructionConstruction
Layers of Separation
Safe Disposal ofSafe Disposal of Drilling Fluids
12
NGV MarketsGM Chrysler Ford look to cashGM, Chrysler, Ford look to cash in on natural gas boomClean Energy, one of the largest U.S. providers of CNG for vehicles, says its customers Monday paid an average $2.59 for CNG equal to a gallon of gasoline. Motorists paid an average $3 79 for a gallon of regular gasolineaverage $3.79 for a gallon of regular gasoline, according to the U.S. Energy Information Administration weekly survey out Monday.
- USA Today, March 6, 2012
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Planning for Uncertainty
A Black Swan Event is a Surprise to the Observer
A Black Swan Event has a major Impact
After the fact, the event is rationalized by hindsight
These Outliers may be rare These Outliers may be rare but play massive roles
15
Black Swan Implications
Plans need more robustness
Options have more value than you might think
Opportunities abound to Opportunities abound to those not blinded by the bell curve
Thanksgiving Day is only a Black Swan Event for the Turkey
19
Thanksgiving Day is only a Black Swan Event for the Turkey