Due to decreasing supplies and growing demand, natural gas
prices in the Pacific Northwest and in the US have risen sharply
over the past years, squeezing family budgets and slowing our
economy; Bradwood Landing will help make energy more affordable
for homes and businesses.
- More Supply Reduces Costs
At today’s prices for natural gas of more than $10
per million Btu, US consumers in aggregate pay an estimated
$180
billion per year, or close to $500 million per day more
for this essential environmentally friendly and clean burning
resource
than they did four years ago, when gas was last sold at
prices around $2 per million Btu, the historical price
level during
most of the nineties (see graph below). Bradwood Landing
will increase the supply of natural gas for Oregon and
Washington
homes and businesses, helping to hold down monthly utility
bills and rising energy costs.
- Growing Shortage
Despite record levels of drilling for natural gas in North
America, production in the US and Canada is struggling
to keep up with consumption. In its latest long range
forecast,
the Energy Information Administration foresees an increasing
role for gas from unconventional sources such as coal
beds, tight formations or very deep water, gas which
is more expensive
to develop and produce than our dwindling supplies of
conventional gas. Wells for unconventional gas and for
gas in aging fields
usually have a short productive life. Over half of the
gas produced in the continental US now comes from wells
that
are less than three years old. All these factors add
up to gas that will be more expensive to bring to the
Pacific Northwest
than locally landed liquefied natural gas.
- Import Options: North of the Border
Even with an optimistic forecast for production from conventional
and unconventional sources, demand in the US will continue
to outstrip supplies, as shown in the graph (below).
For the US, the only two available options to fill the growing
gap
between supply and demand are pipeline imports from Canada
and imports of liquefied natural gas. Canada is currently
the primary source of US imports. However, Canada’s
reserves are also dwindling and the Canadian Energy Research
Institute predicts that production from the giant deposits
in western Canada will stay at current levels only until
2010 and then begin an inevitable slow decline. Canada
also has potential sources of unconventional gas, but
as was the
case for the US, locally landed liquefied natural gas
would be a more cost advantageous solution for the Pacific Northwest.
- Liquefied Natural Gas: Abundant Availability
The Pacific Basin is blessed with an abundance of natural
gas reserves. In its 2005 Statistical Review of World
Energy,
BP estimates the proven reserves of natural gas in Asia
Pacific at more than 500 TCF, enough to provide the North
West with
a safe, reliable and environmentally superior supply
of clean burning natural gas for more than one hundred
years at current
usage rates. By comparison, North America has less than
half of this amount of reserves with a remaining life
of less
than 10 years at current usage rates. The majority of
the Pacific Basin’s natural gas fields are so-called “stranded
reserves”, located too far from major demand centers
for natural gas to be brought to market by pipelines.
The only way to safely and economically transport these
stranded
natural gas reserves to market is in its liquid state,
in the form of liquefied natural gas which has 1/600th
of the
volume of natural gas. In total, gas producers along
the Pacific Rim now supply almost 80 million metric tons
per
year of liquefied natural gas to the economies of Japan,
Taiwan, Korea, and even as far away as Europe. The Asia
Pacific producers plan to more than double this capacity
to 180 million
ton per year as shown below in a graph based on data
from the Petroleum Economist (see graph below). The
Bradwood
Landing terminal would provide a home for approximately
6% of the proposed new capacity.
- Competitive Pricing
There has been significant progress in recent years in
the cryogenic technology used to convert natural gas
to LNG. These improvements have resulted in lower costs
for the liquefaction plant and ships, hence reducing
the cost and further enhancing the competitive price
of liquefied natural gas.
- Global Supply, Local Benefits
The natural gas imported through Bradwood Landing will
have a dampening effect on natural gas prices throughout
the region.
Increased supplies will reduce natural gas price volatility,
helping hold down energy costs for both residential and
business consumers.
- Deliver Energy to the Regional Grid
The Bradwood Landing cogeneration power plant will deliver 130Mw on
a firm basis and will deliver electric energy to the regional grid. The
energy that will be generated is enough to supply approximately 30,000
homes with clean, safe energy.
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