Gas supply and deliverability issues and their impact on generation adequacy

Summary form only given as follows. Generators will be the fastest growing end-user segment for the gas industry. The year 2000 has confirmed that the potential for severe pipeline constraints and gas price spikes exists. However, caution needs to be exercised in making sweeping generalizations related to the impact of gas-fired generation on the pipeline system, because: pipeline capacity is always a regional issue, but regional problems can ripple across the entire gas grid; and pipe constraints and the associated price spikes are most likely in the regions that have: limited gas infrastructure; large winter-time space heating needs; and rely on baseload combined cycle generating capacity. When markets are examined regionally we find that the industry has been excellent at identifying areas that might need more capacity. However, the rigors of the certification process and the trend toward shorter contracts and more flexible, "time-slice" tariffs create difficulties in bringing projects to fruition. The market continues to witness, an abundance of pipeline announcements, yielding some real pipeline competition. More are on the horizon. Contributions from a variety of supply sources make a 29 Tcf market possible at a long-term price range of $2.50 and $3.75/mmBtu.