MISO Sees Growing Role for Natural Gas in Midwest

Lower gas prices, expanding infrastructure, and coal retirements are likely to drive a much greater role for natural gas in the Midwest, according to a new study by the Midcontinent Independent Service Organization (MISO).

The study, released Dec. 6, is the third phase of ongoing assessment that MISO initiated in 2010 after recognizing the impending impacts of environmental regulations on the region’s coal fleet. The first two phases looked at the region’s pipeline infrastructure in the context of projected increased gas power burn, suggesting that supply constraints were likely.

Phase 3 of the study forecasts continued growth in gas demand for power generation throughout the MISO service area, but a generally positive outlook for gas pipeline capacity.

“Over the past two years, growth in shale gas production has dramatically altered the natural gas supply landscape,” said John Lawhorn, MISO’s senior director of policy and economic studies.

The study findings suggest that the Midwest will transition from acting as a midpoint/supply by-way for natural gas to a destination market for gas sourced from an increasingly diverse supply portfolio. Canadian gas will play less of a role in meeting Midwest fuel needs as the Bakken, Marcellus, and Unita plays ramp up production. As a result, the region can shift from being a net exporter to the northeastern U.S to a net importer from it, though approximately 2.0 Bcf/d of new or converted infrastructure will be necessary to make this happen.

The analysis also forecasts continued access to numerous gas supply sources for end users in MISO South, due to an exceptionally well-connected pipeline network there. However, supply constraints are likely to continue in a few isolated areas, mainly southern Minnesota and northern Iowa, the study found.

Still, the study warns that these positive trends do not alleviate near-term electric generation capacity concerns. “Improved gas supply and transportation does not automatically translate to an increase in gas-fired capacity in the MISO footprint; uncertainty surrounding commitments to build new capacity continues to persist,” Lawhorn said.

MISO has been engaged with a number of stakeholders in efforts to improve inter-industry coordination. The Electric and Natural Gas Coordination Task Force, a MISO stakeholder forum was established in late 2012. Several other MISO projects are underway with this goal, including building a database that links gas infrastructure to electric generators, creating an online platform for gas pipeline critical notices and operational flow orders, and adding an overhead control room display of electric transmission/generation and natural gas infrastructure.

 —Thomas W. Overton, JD, gas technology editor (@thomas_overton, @POWERmagazine)

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