Energy Plug: Deliverability on the Interstate Natural Gas Pipeline System

Deliverability on the Interstate Natural Gas Pipeline System

Deregulation has spurred growth in the U.S. natural gas pipeline system and its utilization, according to Deliverability on the Interstate Natural Gas Pipeline System, new from the Energy Information Administration (EIA). The 1992 issuance of Order 636 by the Federal Energy Regulatory Commission boosted major changes already under way in the structure of the natural gas industry, resulting in open access to storage and transportation capacity. The subsequent increase in competition has helped to expand both natural gas consumption (up 17 percent between 1990 and 1996) and the already-extensive U.S. pipeline system (see figure for its status as of December 1997).

Available capacity is being used more efficiently under deregulation, for several reasons:

Development of a pipeline capacity release market that allows unused firm capacity to be sublet to other shippers.
Expansion of the number of market centers, which allow better access by shippers to lowest-cost gas supplies, from 1 in 1990 to at least 36 today.
Better access to underground storage facilities that allow rapid access to and turnover of stored gas.
Electronic trading via computer-based systems, which has grown steadily in recent years.

The system's capacity at regional borders increased more than 15 percent between 1990 and 1996, while interregional pipeline utilization rates increased from 68 percent (on an average day) to 75 percent in 1996. Canadian import capacity to the United States rose 69 percent, reflecting growing U.S. demand as well as excess Canadian domestic production over demand.

Further pipeline capacity growth seems inevitable. At least 41 pipeline projects were completed in the United States alone in 1997; if all new projects now proposed through 2000 are built, interregional capacity could increase as much as 17 percent. Much of this new capacity would serve the Canadian corridors feeding the U.S. Midwest and Northeast. EIA forecasts growth in natural-gas consumption of about 2 percent annually through 2008.

Contact:: James Tobin, Office of Oil and Gas; james.tobin@eia.doe.gov; Phone: (202) 586-4835

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URL: http://www.eia.doe.gov/emeu/plugs/plpipeln.html

File last modified: May 27, 1998