Natural Gas Update: Challenges Persist

This slide illustrates the NPC’s projection of the impact of Access Restrictions in the eastern Gulf of Mexico. The Reference Case curve (yellow line) assumes that Western Norphlet, off the coast of Mobile, Alabama, and MMS Lease sale 181 will be the only areas in the eastern gulf that will produce gas. Given the recent announcements on Lease sale 181, the NPC Reference Case is probably too optimistic. As a result, eastern Gulf of Mexico production potential is probably closer to the white line. Initial estimates indicate that the 181 potential has been cut by 75% as result of the recent compromise between DOI and Congress.

However, as the blue line indicates, the NPC study anticipates substantial additional gas supplies to feed the country’s growing energy demand if industry is allowed access beyond what is currently permitted. Florida’s gas demand will increase to 1,100 BCF per year by 2015, an increase of almost 100% since 2000. The Increased Access case shows that the eastern GOM has the potential to more than satisfy Florida’s gas needs. The increased gas demand in Florida will be driven by gas fired electrical generation growing by 25,000 MW by 2015.