Need for a new pipeline

One of NW Natural’s long-term goals has been to further diversify its gas supply portfolio through the creation of additional access to the interstate pipeline system.

To that end, the company has been considering a pipeline across the Cascades to connect to the Gas Transmission Northwest system in Eastern Oregon.

Currently, NW Natural relies on a single transmission pipeline for about two-thirds of its natural gas supplies. That pipeline is nearly 60 years old and cannot be expanded easily. It frequently operates at its maximum capacity.

The other pipeline serving our service territory is fully contracted out.

NW Natural believes an alternative pipeline route is essential to protect its customers from potential pipeline interruptions and to ensure gas will continue to be available to meet growing demand. Furthermore, a new pipeline will give the company more flexibility in buying gas, which can help keep down customer costs.

Background

In 2008, NW Natural and its partner, TransCanada, filed with the Federal Energy Regulatory Commission to build a cross-Cascades pipeline called Palomar. In 2010, one of the principal customers for pipeline capacity shut down its project, changing the feasibility of Palomar financing. As a result, the partners withdrew their permit application for Palomar in 2011.

Future Demand

In August 2014, NW Natural submitted its latest Integrated Resource Plan (IRP) documents to Oregon and Washington utility regulatory commissions. The IRP states that, given what we know and assuming no LNG export terminal is built in Oregon, the least-cost option for NW Natural’s customers is to participate in a new pipeline crossing the Cascades.

NW Natural believes conditions are right to consider construction of a cross-Cascades pipeline, with a new route more than 100 miles shorter than the original proposal.

With the economic rebound and new environmental considerations, we expect growing demand for natural gas. That means the region will require greater pipeline capacity. Some factors that support this statement are:

  • Population growth, with more day-to-day use of natural gas. For example, Clark County, Wash., is the third fastest-growing county in the Pacific Northwest. New homes and businesses will require more natural gas even as gas appliances and buildings grow more efficient.
  • Natural gas power plants will be required to replace some of the power currently produced by coal plants in Oregon and Washington that are scheduled for retirement.
  • One natural gas generating facility already has been built for the specific purpose of firming up wind power. As more intermittent renewables come on line, more backup resources will be required and these are likely to come from natural gas.
  • Inexpensive natural gas is attracting new manufacturing to the U.S. One enterprise has announced its intention to build two methanol plants at Columbia River ports and a third in Tacoma. Any one of these would substantially add to regional gas demand; two or three would only be possible with the construction of more pipeline capacity.

Regional projections indicate demand for gas in the I-5 corridor will exceed capacity by 2020. If a major petrochemical facility or other significantly large gas user starts up, this could occur even earlier.

Benefits of natural gas

A 2014 American Gas Foundation report called Fueling the Future described the important role natural gas can play in helping the U.S. meet its economic and environmental goals. Low-cost, abundant natural gas is helping the nation reduce greenhouse gas emissions and other energy-related air pollutants while revitalizing the country’s manufacturing sector.

Low gas prices also have saved Americans billions of dollars on their energy bills – whether they rely only on electricity or use natural gas directly for space and water heating. As long as natural gas continues to be an affordable, clean option for energy, demand will continue to grow. To ensure this resource is available, the region will need to invest in natural gas infrastructure: that means pipelines and storage.

NW Natural looks forward to working with customers, communities, regulators and economic development partners to develop environmentally sound and cost-effective ways to meet the region’s natural gas needs.