North American natural gas supplies soared beyond all previous expectations in recent years, keeping prices in check and creating potential new end users.
Jason Thackston, Avista Utilities' senior vice president for energy resources, said Monday there is no reason to expect a decline in natural gas availability in coming years. Supply and demand, however, will keep suppliers and consumers on their toes.
"On the supply side, you're going to see a lot of supply in North America and abundant sources going forward. More supply should help prices," Thackston said after addressing the Chamber of Medford/Jackson County Forum at Rogue Valley Country Club.
"On the demand side, there are a couple of things that are at play right now, that have the potential to cause prices to go higher," he said. "One is export LNG terminals proposed here in Oregon and elsewhere on the West Coast that could take natural gas from North America to other parts of the world, so that would increase demand and theoretically — with all other things being equal — raise prices."
As government agencies push to curtail coal extraction and use of coal in power generation, the natural gas industry is well positioned, he said.
"As we see the national clean-energy initiatives that have the potential to drive more investment to natural gas generation," Thackston said. "As we see coal generation and coal plants shut down, some of that will be replaced with wind, some of that will be replaced by solar, but a lot of that will probably be replaced by natural gas generation. That will be factored into the supply demand situation."
Thackston said Avista is keeping an eye on the proposed Jordan Cove LNG Terminal and pipeline project, but has no direct interest.
"We're watching that development as many are, (but) we're not involved in that conversation," Thackston said. "We're neutral to it, other than it creates demand for natural gas so it potentially puts pressure on prices and that wouldn't be good for consumers. If it goes through there will be additional demand and additional consumption of natural gas in the Pacific Northwest. Given we're a consumer of natural gas, we're going to be competing with more parties, which has the potential to raises prices."
While there is plenty of natural gas, distribution and delivery raise their own challenges for utility companies, he said.
"As national energy conversation proceeds that we're balancing the reliability with the environmental and cost," Thackston said. "Something of concern to utilities in general is aging infrastructure. There are plants we built in the late 1800s and early 1900s but we still use today. Things cost more today than they did 125 years ago, so making sure we can make those infrastructure investments in a way that doesn't cause undue price pressure for our customers."
During his prepared remarks, Thackston outlined Avista's history, its encouragement to innovation, and arrival in Southern Oregon 23 years ago when the company bought CP National's Oregon and California holdings. In 1993, Avista built its local headquarters near the airport on Biddle Road.
Going forward, he said, extending and maintaining pipelines and regional infrastructure components will grow in importance.
"We're thinking about what we need to do to be here another 125 years," Thackston said. "We are in the process of upgrading our pipeline in Medford, adding to the capacity on this side of the valley and increasing our capacity in White City."
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter at woww.twitter.com/GregMTBusiness, on Facebook at https://www.facebook.com/greg.stiles.31, and read his blog at www.mailtribune.com/Economic Edge.