Annual Gas Distribution Survey

Annual Gas Distribution Survey
February 2011, Vol. 66 No. 2

The report notes that the 0.1 percent increase in total gas consumption in 2011 is the result of about a 1 percent increase in residential, commercial, and industrial gas consumption, offset by a 1 percent decline in electric power sector consumption. The projected increase in residential and commercial consumption next year is the result of a forecasted 1.7 percent increase in U.S. population-weighted heating degree-days. As noted in the report, industrial sector gas consumption growth is driven by the projected 2 percent increase in the natural-gas-weighted industrial production index. Despite a slight decrease (0.3 percent) in electricity consumption in 2011, projected electric-power-sector natural gas consumption falls by 1 percent primarily because of forecasted increases in nuclear and renewable-based electricity generation.

Price concerns
Uncertainty over future gas prices is lower this year compared with last year at this time. As a result, the EIA report indicates gas prices for 2011 are expected to be at $4.58 per MMBtu, which is $0.18 per MMBtu (4 percent) lower than earlier anticipated, primarily due to a stronger domestic production forecast.

While some trends offer strong business opportunities for the LDC, the industry is facing new legislation that requires each operator of a gas distribution system to develop a written Distribution Integrity Management Program (DIMP) plan no later than Aug. 2, 2011, under a rule issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The most costly aspect of the new legislation is likely the requirement to install Excess Flow Valves (ESVs) on all new and replaced service lines serving single family residences if practical.

Gas Distribution System Operators Incident Summary Statistics by Year 1/1/1986 - 12/31/2009
Oct 13, 2010
PHMSA2.PNG

As a result of legislative and regulatory changes and increased consumption, overall LDC spending in the coming year is projected to rise. Underground Construction’s latest survey figures indicate gas utility spending to serve new customers, and rehabilitate, repair and replace the nation’s 1,217,160 miles of distribution mains and 65,514,933 services, meters, valves, regulators, cathodic protection, SCADA networks and peak shaving facility will total approximately $12.1 billion in 2011, compared to $11 billion this year.