Behind Montana's Natural Gas Usage

MONTANA, Dec 10 (Neo Natura) - Alberta provides the largest supply of natural gas for Montana customers and will likely continue to do so in the years to come. The reason for this is our proximity to Alberta’s large gas reserves. The next largest supply for Montana is from in-state wells mostly located in the north-central portion of the state. Supplies from the other Rocky Mountain states represent a small portion of total in-state usage and continue to decline from historic levels. Future changes in supplies from in-state development and from other Rocky Mountain states are uncertain at this point. Coal bed methane may eventually increase the portion of gas used in Montana that comes from Rocky Mountain states, but the peak of that production is still a few years off.

Montana currently produces more gas than it consumes. In 2002, Montana produced 86.1 billion cubic feet (bcf) and consumed 69.6 bcf (Tables NG1 and NG2). The bulk of what Montana produces is exported, and the bulk of what Montana consumes is imported. In 1999, for example, Montana produced 61.2 bcf of gas and exported 51.8 bcf total to North Dakota, South Dakota and the Midwest. The reasons for this are the way in which natural gas utilities structure their gas purchasing contracts and the configuration of gas pipelines in Montana.

Most gas produced in Montana comes from the north-central portion of the state. In 2002, the north-central portion accounted for 71% of total production and the northeastern portion of the state accounted for 15% (MBOGC 2003). In-state gas production has been increasing in recent years (Figure 1, below). The south-central and northeastern portions have greatly increased their production level since 1998, resulting in most of the recent statewide increase (MBOGC 2003). Because most gas is exported, increases or decreases in natural gas production in Montana likely have little impact on Montana natural gas consumers.

Coal bed methane development in Montana has not yet become significant, due in part to difficult environmental issues. Some residents in Montana have forcefully opposed methane Connection with Electric Generation Page 2 III-2 development, especially in or near the Powder River Basin. However, with the Montana Environmental Impact Statement completed and released to the public in the fall of 2003, in-state development is expected to increase in the near future. The total amount of methane development that will occur in Montana is yet to be determined. The future extraction of other known gas reserves along Montana’s Rocky Mountain Front likewise is uncertain at this point