NGA Issue Brief: Distribution Systems in the Northeast: Continued Strong Demand

KEY POINTS
  • Natural gas use remains strong in the Northeast region.
  • There are over 12 million households using natural gas in the Northeast, representing 55% of all households.
  • Natural gas utilities in the region are leaders in efficiency program investments and in seeking low-carbon supply inputs.
  • Natural gas has consistent benefits over other fuels: cost, supply, and lower emissions.
  • Parts of the region face challenges in securing sufficient pipeline capacity given system constraints and siting difficulties.


Natural Gas is the Optimum Choice for the Northeast U.S.
Natural gas is the best choice for homeowners and businesses in the Northeast region. It is the leading home heating fuel in the U.S., fueling 47% of homes. In the Northeast, it fuels 57% of homes; some state shares include 75% of New Jersey homes, 61% of New York's, 52% of Massachusetts's, and 51% of Pennsylvania's. It is the leading single fuel for electric power generation throughout the region - about 50% of current electric generating capacity.
This issue brief by the Northeast Gas Association (NGA) outlines some recent market developments on natural gas.

Natural Gas is the Lower Cost Option for Consumers
With the rise in U.S. natural gas production in recent years, the commodity price of natural gas has declined and remained generally stable. In its 2021-22 Winter Fuels Outlook, released in October 2021, the U.S. EIA projected that natural gas - even if projected to be higher this year than prior years - would remain the lowest cost option for home heating - in the U.S. and regionally.
In recent years, U.S. production of natural gas has grown robustly, thanks especially to the application of technology to access what was traditionally called "unconventional gas." In September 2019, the Potential Gas Committee at the Colorado School of Mines estimated total U.S. reserves at over 3,300 trillion cubic feet (Tcf) - essentially 100 years of supply at current domestic consumption levels. The strong domestic production means jobs here in the U.S., a positive supply outlook for natural gas, and a generally stable price outlook according to government and economic forecasters.

 

This chart from the Potential Gas Committee (PGC) shows the rise in estimates of the total U.S. natural gas supply. In recent years, thanks to the rise in shale gas production (shown in blue/red stripe), the resource outlook has increased considerably. Source: PGC, October 2021.

Environmental Benefits
Natural gas has lower emissions than other heating fuels such as oil and propane, and is highly efficient and reliable.

Natural gas efficiency program investments are significant in this region; 40% of all U.S. gas efficiency investments emanate from the nine Northeast states.
Methane emissions in the region related to natural gas systems have been declining thanks to accelerated replacement of older system components.
Another element of focus for the natural gas industry is utilizing new technology innovations to reduce or offset carbon intensity in supply. These include renewable natural gas (RNG), hydrogen, and carbon capture sequestration.
Natural gas has been the leading fuel for power generation in recent decades, along with renewables, in the U.S. and the region. Air emissions from power plants have declined substantially in the Northeast in recent years, thanks in great part to the use of natural gas.
Finally, natural gas remains a flexible energy source, suitable for heavy-duty transportation.

What are the fuels used in home heating in the region?

Regional Demand Continues; Pipeline Constraints Present Market Challenges in Certain Parts of Region

The benefits of natural gas - lower price, lower emissions, domestic supply, etc. - are leading to continued customer additions. There are now over 12.5 million households in the Northeast U.S. that utilize natural gas (and 60 million in the entire U.S.). It is the leading home heating fuel source regionally and nationally. Indeed, in a March 2019 issues brief, U.S. EIA stated: "The residential and commercial sectors [nationwide] are also expected to continue using more natural gas. For instance, EIA projects that natural gas furnaces and boilers will be used in 55% of U.S. homes in 2050, an increase from their 49% share in 2018."

Natural gas utilities in the region continue to receive requests for service, and are seeking to provide support where possible. Parts of the Northeast region have moratoria in place on adding new natural gas customers, as demand exceeds available pipeline system supply. Utilities are exploring all options to meet demand, from supply inputs to efficiency and demand-side management.

The natural gas distribution companies continue to work every day to serve customer needs safely, reliably, cost-effectively, and in an environmentally responsible manner.


For the 9-state Northeast region, natural gas represents nearly 60% of the overall home heating market - over 12 million households served.
 

For Further Information:

NARUC Task Force Report on "Natural Gas Access and Expansion," Nov. 2017