Officials fearing shortage of gas
State regulators fear that Southern Nevada will run short of natural gas supplies for space heating, water heating and electric power generation in three years if efforts are not taken to gain access to additional gas fields and pipelines.
Southern Nevada may have "a significant interstate transportation supply issue" in three years If Southwest Gas Corp. managers do not quickly deal with the looming natural gas shortage, according to the Public Utilities Commission staff.
In a report to the commission Wednesday, the staff also cited a shortage of pipeline capacity for delivering gas to Northern Nevada, but the problem appears less severe there.
The Las Vegas area gets gas from interstate pipelines that draw gas from wells in the Rocky Mountains, the San Juan Basin of New Mexico and the Permian Basin of west Texas, said Jon Davis, an engineer with the commission staff.
The basins are either producing the same amount of gas as in years past or they are producing declining amounts of gas, Davis said.
"Although Southern Nevada is (gas) transportation deficit for the 2007 to 2010 time period, it appears that (Southwest Gas) has ample flexibility to satisfy this transportation shortfall up to 2009 via short-term (pipeline) transportation contracts with gas suppliers that furnish interstate transportation along with the gas supplies," the staff said.
"The transportation shortfall becomes more significant for 2009 and 2010 as a result of sales growth and the expiration of existing transportation contracts," the report said.
Based on information from Southwest Gas "it appears that long-term supplies to Southern Nevada are problematic," the report said.
The long-term problem stems from plans to build the Rockies Express Pipeline project, which is designed to carry fuel from Colorado to the Midwest, the report said.
"Northern Nevada (gas transportation) requirements are adequate for the 2007 to 2010 time period, but, at the current growth rate, additional transportation will be required beyond 2010," the report said.
Annual gas sales are increasing 2 percent yearly in Northern Nevada and 4 percent yearly in Southern Nevada.
Commission Chairwoman Jo Ann Kelly said the prospects of inadequate gas supplies affect not only Southwest Gas, but electric utilities that use gas for many of their power generation plants.
The commission voted 3-0 to direct Southwest Gas to meet every three months with the commission staff and the attorney general's Bureau of Consumer Protection to discuss potential shortages.
The gas distribution company also was ordered to provide a detailed analysis of the issue.
The commission voted 2-0 to issue a declaratory order that the central energy facility for Boyd Gaming Corp.'s planned Echelon Place development is not subject to state utility regulation. Kelly abstained from the vote and the discussion, later explaining that she has a financial interest in Boyd Gaming.
LVE Energy Partners requested the declaratory order. The partnership will provide heat and chilling for water, space heating and air conditioning for the Boyd Gaming casino under construction at the old Stardust site.
