FOR IMMEDIATE RELEASE
Media Contact
Dan Kirschner, Executive Director
Northwest Gas Association
(WEST LINN, Ore.) June 24, 2024 – The Northwest Gas Association (NWGA) announces the release of its 2024 Pacific Northwest Natural Gas Market Outlook. This comprehensive report provides valuable insights into the natural gas market landscape, trends, and projections for Washington, Oregon, Idaho and British Columbia.
The 2024 Market Outlook is an aggregation of the integrated resource plans and long-range planning work of NWGA member companies. It delves into critical factors shaping regional natural gas supply and prices, demand drivers, capacity considerations and the work of NWGA members to deliver decarbonization in line with regional policy objectives.
“We are pleased to present the 2024 Pacific Northwest Natural Gas Market Outlook, which offers stakeholders a comprehensive look at the dynamics affecting natural gas providers and consumers in our region," said NWGA Executive Director Dan Kirschner. “The Outlook serves as a valuable resource for policymakers, industry professionals, and others in making informed decisions about the continuing vital role of the natural gas delivery system in safely and reliably meeting the region's energy needs and decarbonization goals.”
Key highlights of the 2024 Market Outlook include:
1. Fundamentals: About two thirds of the natural gas consumed in the Northwest comes from Canada. Being linked to three distinct producing regions (Alberta, British Columbia and the U.S. Rockies) gives providers some flexibility to take advantage of price differentials between producing areas, assuming there is sufficient pipeline capacity to move it from where it is produced (hundreds of miles away) to where it is needed.
The average wholesale price of the commodity through the first few years of this decade remained historically low and is forecast to remain between $4-$5/dekatherm through 2050 (2022 dollars).[1],[2] While supplies are abundant, short-duration price volatility may occur during extreme weather events when demand exceeds the capacity of infrastructure to deliver sufficient supplies.
2. Leaning on Natural Gas: On average, natural gas serves almost half of the end-use energy consumed in the region during a typical year (space and water heat in buildings; industrial process heat). Natural gas provides almost three-quarters of the energy consumed in our region during extreme weather events like the January 2024 cold snap.
Residential demand for natural gas is expected to grow modestly over the next 10 years, while commercial demand remains flat. Industrial demand will also remain flat except for a single LNG export facility slated to come on line in 2026. Different from the prior Outlook, which forecast a straight-line decline in demand for natural gas to generate electricity, this update projects generation demand to grow slowly over the first half of the forecast period before declining over the last half.
3. Capacity is Key: The region’s system of natural gas pipelines and storage facilities safely and reliably delivers vital energy to more than 3.5 million homes and 350,000 businesses, institutions and industries across the Pacific Northwest. Average utilization of the region’s interstate pipeline system exceeded 95 percent over the last five years, making storage a critical regional asset. There is currently almost no margin to accommodate unexpected outages on the system, and demand during the coldest days of the year continues to grow, especially for natural gas to fuel electricity generation. Given the long lead times required to develop energy infrastructure (five or more years), NWGA members and market participants are constantly evaluating the sufficiency of regional pipeline capacity to transport natural gas from where it is produced (hundreds of miles away) to where it is needed, when it is needed. Capacity expansion projects designed to serve known needs have been recently approved by U.S. and Canadian regulators.
(Click here to read a recent op-ed co-authored by Camilo Amezquita, NWGA’s Board President and Vice President/General Manager of Williams Northwest Pipeline.)
4. Delivering Decarbonization: NWGA members are keenly focused on supporting state and provincial decarbonization targets, while providing consumers with dependable, affordable energy choices and solutions. They reliably deliver the fuel needed to generate electricity during critical times and are making substantial investments in system safety and integrity, energy efficiency and low carbon gaseous fuels like renewable natural gas and hydrogen.
Kirschner said that this iteration of the Outlook and similar regional energy market overviews are beginning to incorporate the effects of recently enacted energy policies, which are just starting to be implemented. “We expect the findings of future Outlook iterations to evolve as decarbonization policies mature and regional energy markets adapt,” Kirschner continued.
[1] Energy Information Administration, 2023 Annual Energy Outlook, Table 13
[2] Northwest Power & Conservation Council, Fuel Price Forecast, November 2023 Update
About Northwest Gas Association: The Northwest Gas Association (NWGA) is a trade organization representing the natural gas industry in the Pacific Northwest. NWGA advocates for the responsible production, delivery, and use of natural gas while promoting the economic and environmental benefits it provides to the region. For more information about NWGA, visit www.nwga.org.
The NWGA encourages interested parties to download the full report from its website and to engage in discussions about the findings presented in the 2024 Market Outlook.
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