Policy Forum Series: Whelan - Natural Gas Market Impact on Minnesota Business
Environmental Ini.a.ve: Natural Gas Market Impact on Minnesota Businesses Casey Whelan September 21, 2012
Natural Gas Market Changes • Natural Gas prices have dropped drama.cally over the past few years • Increased Shale produc.on is the primary contributor to the drop
Consumer Impact • MN Consumes roughly 2% of Natural Gas used each day • Usage is greater per capita likely due to hea.ng load • Industrial load is highest component, Electric Power is lowest
Consumer Impact • Material savings are accruing to MN residents and businesses related to Shale driven price drops • Average annual savings for industrial customers exceeded 400 million dollars
Opportuni.es • Natural Gas prices and liquid fuel prices have separated • Rela.vely high spread likely to con.nue • Fuel Switching Opportunity
Opportuni.es • Natural Gas is considerably cheaper than gasoline or diesel as a transporta.on fuel • Signiﬁcant ac.vity na.onally and in MN related to developing natural gas fueling infrastructure
Home Grown Examples • CNG Fueling facili.es have been installed in Blaine (WM), Buﬀalo (Randy’s Sanita.on) and Lakeville (Dick’s Sanita.on) in the last year. • U.S. Energy is working with several industrial customers who are in the advanced stages of installing fueling facili.es.
Home Grown Examples • CNG Garage Haulers and Dump Trucks are built in Dodge Center, MN by McNeilus Truck
Risks • Regulatory: EPA regulatory changes • Legisla.ve: Congressional or State Ac.on • Market: LNG Exports • Bo[om Line: MN Consumers are saving over 1 billion dollars per year in energy costs and those savings could go away quickly!