Proposals to build natural gas pipelines and liquefied natural gas terminals in Oregon have generated regional controversy in recent weeks, but there has been little discussion of the challenges the Northwest faces without them.
Our customers expect NW Natural to keep our energy costs low, and we’re proud of our track record. But as your natural gas provider, we think it’s important to describe what we see ahead, the decisions facing our region – and the impacts on us all.
Opponents of gas infrastructure projects say we should only invest in renewable energy. But we simply do not have enough renewable resources to meet all our energy needs. NW Natural fully supports Washington’s measure requiring the state’s largest utilities get 15 percent of their energy from renewable sources by 2020. But what will fill the gap until – and even when – we meet that goal?
And what will provide the backup energy needed for intermittent renewable sources like wind?
Policymakers have made it clear more conventional coal and hydro plants won’t be built in our region, and nuclear power is not an option politically.
That leaves natural gas. Natural gas produces half the carbon dioxide of coal, and its use in homes and businesses accounts for less than 6 percent of our nation’s total greenhouse gas emissions. It is the cleanest option available to supplement renewable energy and reliably meet our growing energy demands.
While NW Natural does not sell gas for electric generation, we recognize that in the decades to come, the Pacific Northwest is going to need a lot of it to transition off coal. In fact, regional demand for natural gas is projected to double by 2025.
Natural gas costs have tripled in the last seven years. With impending legislation limiting carbon dioxide emissions, even more gas will be used for electric generation – and that demand is going to drive gas and electricity prices higher.
The rest of the country is anticipating the inevitable competition for gas supplies – and has acted. A new pipeline now moves more of the Rocky Mountain gas we use to the Midwest and East Coast. Nine LNG terminals will be fully operational in the East and Gulf Coast states by 2009.
But there are no LNG terminals on the West Coast and without access to new supplies, the Northwest will be at a severe competitive disadvantage. Gas will be available – but at what price?
To prepare for a cleaner energy future we must aggressively push for greater energy efficiency (it’s the fastest, least costly way to reduce our climate impacts), continue developing renewable energy sources and build the gas infrastructure needed to meet our region’s demand.
For our part, NW Natural has partnered with Gas Transmission Northwest to develop Palomar, a natural gas pipeline that would serve the Pacific Northwest.
Palomar would be the only pipeline positioned to bring more gas from the Rockies or take new supplies from proposed LNG terminals. Our ability to purchase gas from a diversity of sources is the single most important factor to help hold costs down, and Palomar will be paid for with private funds – not an increase in customer rates.
Natural gas will be critical in our efforts to combat climate change and support renewable development. But as your local provider, we see tighter gas supplies and higher energy prices ahead.
We believe it’s going to take ingenuity and investment in a variety of energy resources, including LNG, for us to meet both our greenhouse gas reduction goals and our economic aspirations.
