Natural gas provides approximately 30% of New England’s primary energy needs and serves 2.6 million customers. Fuel oil is the leading home heating fuel that is used at approximately 40% of the region’s homes, while natural gas now heats approximately 37% of all homes in New England. About 49% of the natural gas supplies are utilized for power generation with approximately 21% for residential use, 16% commercial, and 14% industrial use.

Meanwhile, limited additional infrastructure has been constructed to support the increased natural gas demand. New England has no native supply of natural gas. Pipelines deliver gas to the region from four separate sources: eastern and south-central United States, western Canada, Sable Island in eastern Canada, and an LNG terminal in Everett, Massachusetts, near Boston, one of only four liquefied natural gas import terminals in the contiguous United States.

Gas Demand

Numerous studies have evaluated the natural gas market in New England and estimated the growth rate of consumption will grow at rate of between 0.4% and 1.6%, depending upon projection assumptions. The range of projected growth rates is driven primarily by the natural gas use for electrical power generation. The New England region has aggressively switched to natural gas as the preferred fuel source for electrical generation. For example, approximately 52% of the electricity requirements in New England today is generated by natural gas, compared to only 5% in 1990 and 15% in 2000.

The 2012, the Energy Information Administration (EIA) Annual Energy Outlook estimated the total annual natural gas sendout for consumption is 880 Bcf. Depending upon how the electrical generating industry responds to increased demands, the demand for additional natural gas supplies is projected to increase through the end of the decade from anywhere between 0.250 Bcfd to as much as 0.900 Bcfd during peak demand days during the winter.

Gas Supply

New England has no native supplies of natural gas. The New England natural gas supply infrastructure is comprised of interstate pipelines that transport natural gas from sources of supply to the point of use or storage, storage facilities that augment local natural gas supplies, local distribution networks that provide service to individual customers, and the Everett terminal, which serves as a source of supply for Boston and the surrounding region. Historically, the main three areas that supplied natural gas to New England were the Gulf Coast, Canada, and LNG. The continued development of natural gas derived from shale sources in the mid-Atlantic states are gradually replacing these sources.

LNG provides about 20% of New England’s annual gas supply and nearly 30% of peak day supply. Distrigas in Everett, MA supplied approximately 87 Bcf to the New England region in 2012 and Canaport on St. John’s, NB supplied an additional 60 Bcf.

Nova Scotia Gas Production and Supply to the Northeast

Current Nova Scotia gas production is in decline. Although the recently launched Deep Panuke field will add an additional 12 to 15 years of production, it will likely not be sufficient for a long-term secure supply of feedgas for export or to meet regional demand. In a report presented by the Nova Scotia Department of Energy dated March 2013, the local demand is estimated at roughly 200 mmcfd for the next 20 years compared to local production that is estimated to be between 175 mmcfd and 200 mmcfd. Offshore oil and gas exploration may yield new finds that would improve the figures for local production. Moreover, the recent elimination of a gas fracking moratorium in New Brunswick for new wells will encourage additional exploration and development.