U.S. ENERGY INFORMATION ADMINISTRATION
WASHINGTON DC 20585

FOR IMMEDIATE RELEASE
May 15, 1998

The natural gas industry's overall capacity to pipe gas from region to region reached an all-time high of over 84 billion cubic feet per day (Bcf/day) in 1997. This represents a 15 percent increase over installed capacity reported in 1990, according to findings in the report entitled, Deliverability on the Interstate Natural Gas Pipeline System, released today by the Energy Information Administration.

Moreover, by 1996, the amount of gas flowing per day had grown by 24 percent from 1990 levels, resulting in a record high 75 percent utilization of installed capacity, as the nation's pipeline system expanded and worked harder to accommodate the nation's growing appetite for natural gas. Between 1990 and 1996, U.S. natural gas consumption grew by 17 percent; marketed production increased by 6 percent and net imports doubled to keep pace with this growth.

Most of the projected 6 to 7 percent increase in domestic natural gas production through 2000 will come from the Offshore Gulf of Mexico, the San Juan Basin, and the Rocky Mountain area (Figure 1). While planned pipeline expansions appear adequate to accommodate this increase, some bottlenecks may develop in moving new offshore production beyond onshore Louisiana. Potential bottlenecks may be partially or completely offset by planned new or expanded underground storage facilities.

Since 1990, significant changes in traditional patterns of gas movement have occurred. Gas from western and Rocky Mountain producing areas is increasingly being routed away from western markets, as producers seek alternative markets and key pipeline projects have been constructed or are planned to accomodate the shifts. Producers in the Rocky Mountain area are looking to serve expanding Midwestern markets, while producers and pipeline companies in West Texas and New Mexico have shifted portions of their capabilities toward eastern markets.

Imported Canadian gas' share of U.S. consumption has increased every year since 1989. Consequently, pipeline capacity in the three Canada-to-U.S. transportation corridors (Figure 2) has grown markedly. Taken together, these corridors have experienced more growth in the capacity to deliver gas since 1990 than any of the other seven major interregional transportation corridors: over 4 Bcf/day, or 69 percent. Further, these corridors have consistently been the most heavily utilized over this period, with pipelines in these corridors operating above 85 percent capacity throughout most of the year. The comparatively lower cost of Canadian gas over the past several years has been a key factor in maintaining these high utilization rates.

The most extensive development of new pipeline capacity during the next several years will occur along the corridors connecting Canada to the U.S. Midwest and Northeast markets to handle the ever-growing Canadian imports. A completely new corridor is under development to bring gas from the developing Sable Island fields off the Canadian East Coast to Canadian and U.S. markets. Taken together, these expansions could add as much as 8.6 Bcf per day to U.S. import capacity from Canada during the next 3 years, an increase of 123 percent over 1996 levels.

The pipeline capacity market could support additional growth beyond current levels, although the available capacity may not suit the needs of a particular shipper because of its location, term, etc. During the 12 months ended March 31, 1997, about 78 percent of the system's capability was reserved under firm transportation contracts. However, only about two-thirds of that reserved capacity was actually utilized by firm service contract holders, allowing substantial volumes to be transported under interruptible service contracts.

Deliverability on the Interstate Natural Gas Pipeline System can be accessed electronically from EIA's World Wide Web Site at http://www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/deliverability/deliver.html. Printed copies of the report will be available on or before May 27, 1998, from the U.S. Government Printing Office (202) 512-1800 or through EIA's National Energy Information Center (202) 586-8800.

EIA Program Contact: James Tobin, 202/586-4835
EIA Press Contact: National Energy Information Center, 202/586-8800

EIA-98-10

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