Natural Gas As a Basis for Resource Development in the Pacific Northwest
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NATURAL GAS AS A BASIS FOR RESOURCE DEVELOPMEN.i' IN THE PACIFIC NORTHWEST by ROBERT THOMAS LARSON A THESIS submitted to OREGON STATE COLLEGE 1n partial .fulf1llment of the requirements for the degree of r.iASTER OF SCIENCE June 1956 ':-. *TIBST,ESI Redacted for Privacy Profsuor of Ee&ul*I. &osonmoc Ia SL*:gr of lh,Jor Redacted for Privacy gba&,mnn of Dsfartnsst of, h.kft} Bosomar Redacted for Privacy ,,,.u, , ,, , ,- ,,, ,,. Sbrfru*a +f $&ol gnrdurttl e;offi,tt r Redacted for Privacy Dtrs ef eree&tlr &boax qfsa{ bg Stlst&r P* Stoildrrd- li.CKNOWLEDGMENTS The author wishes to express his sincere appreei a. tion to Dr. J.. Granville Jensen, ~"hairman of the Depart.. ment of u·a.tural Res·ources, Oregon State College, i"or his generous assistance and guidance in the preparation of this thesis. To Mr. William G. Griffith, Mrs.. Miriam Ludwig, and Mr .. Howard Young,. Librarian,;: Assistant Librarian and Student Assistant, respectively, of th~ Engineering Library, O.regon State College, go my sin cerest regards and appreciation for their invaluable help in documenting this thesis. I :v1ish to er_tlress my appreciation also to Mr.. Ray c .. Fish, President of Fish Engineering Corporation and Chairman of the Board of Pacific orthwest Pipeline Corporation, for a bount1£ul supply of eur~ent information; to "lr. James w. Carroll, Hanager of' Portland Gas and Coke Company, Corvallis Brane~ for generous contributions of' his ~ime and much local and current information; and to ·:r>Ir ~ Bernard Goldhammer ,_ eeon omist, .Bonneville P.ower Administration, Portland, Oregon, :for supplying me with invaluable information concerning the energy base or the Pacific Northt-test ., I t-Iould further like to thank the public relations offi.cers of Portland Gas and Coke Company , Washington Na.tural Gas CoMpany and British Columbia ~lectric Company for a prompt and bounteous response to 1J'iY request for inf'or mation. Lastly, I would like to thank -my wonderful wife, Nancy , for her proofreading, typing, and moral support which i:rm:neasurably aided in the completion of tld.s thesis. TABLE OF COri'l'ENTS C~cll Page l INTRO.DUCTION. • • • ._ • • .', • • • .. .. • • l Th-e Objective of' this Study • • .. .• • • 1 The Paeif'ie Northwest1s Energy Base ... 2 II. SOURCES OF NATUHAL GAS FOR THE PACIFIC NORTHWEST • • • .. .. • .. ,., • ... • • _. • ., Gas Fie~ds and General Gas Areas. • • • ~ Reserves. • • • • • .. • • • • • • .. • •. 5 Estima.ted Depletion Time . • .• • • -. • • 7 New Discoveries .. • • • • • • • • • • • 9 Ill THE BATTLE OF THE PII'ELDiES ., • • .. ., ., • 10 Westcoast ~ansmission Co.mpany, Ltd ., • 11 Northwest Natural Gas Company • • ., • .• 13 Provinc.e of Alberta Prohibits Natural Gas Exports • .. • • • • • • • • • • ~ 15 Prairie Tra.nsm.i.ssion Linea. Ltd • • .. ., 17 Southern Route Vs Northern Route. • • • Paei:fie · orthwest ipell.ne· Corpo-ration. ~A P.acilic ~ orthwest ipeline Corporation lmproves Position .. • .,. • .. ._ ._ • • • 20 A F'oo t in the Door. • .•. • • • .. • .. • • 22 W.estco.as.t Transmission Company Makes Progre-ss. • ,.. • • • ,. • • ... • .. • • .. 23 Increased Reserves. • • • • • ... • • • • 26 The S.itu.ation in 195.3 • • • • .. • • • • 27 Utilities Swiug to Support of Canadian Gas • • .............. • • • 32 Gellert vs Gueffroy •. • .. ._ • .. • • • .. 3.3 Increasing .Alberta Reserves • • • .. .. • 35 acific Northwest Pipeline Corporation \iina" .• • • • ., • • • .• • • • .• • •. .• 36 Canadian Gas Reserve Estimates Again Increased • .. • .- • •. .•. • • • • .• . • • 40 New Agreement in 1954 Includes Canadian Gas: -•· • .• • -• ._ • • ,. ,.. .. • • • • .. • 41 'lhe Story Behind This New Agr-eement .. • 44 One Mol"e Change ..- • ,. •. .. • • • • • .• • 44 liatural Gas :for the Paei..fic Northwest • 47 :IV T"!iAl:UlPORTATIOli AND !• RKJ!l.fiNG. •· • • • .. .. 48 THE TWO IPl!:LINES ., • .,. • ·~ ,. .,, .. • ,.. • 48 Pacific orthwest Pipeline Corp • • .. 48 Westcoast 'r:r:-ansmission Company. • .,_ • 50 TABLE OF COl TE TS (Continued) CHAPTER Page THE NATURAL GAS x KkT. • • • • • • • • 51 Ilow Natural Gas is to be Marketed ·• • 52 The Sales rrangement Between the Tvzo Pipeline Companies. .. ., • • • 52 Pipeline Sales long Their Route. • 54 ~jor Distribution Companies•• ·• • 55 v PROB B~ UTILIZATION PAT~EBN . • • • • • • 65 Uses and Special Qualities of ] atural Gas • ., • .. •. • • • • • • • • • • • • 65 A Cost Comp rison tw~en atural Gas, Electricity, and Fuel Oil • • • .. • • 69 / Probable Use of Natural Gas in the Pacific Northwest .. • • •. • • • • • • 72 Fresent Industries. • • • • • • • • • • 73 ew Industries..............· • • 74 ' VI CONCLUSION. • ._ . • • • • • • • • • 76 BIBLIOGR PHY. • • • • • • • • • • • • • • 78 LI ST OF FIGURES FIGURE age 1. Natural eas fields and general gas areas of the ·estern United States and estern C-anada • .................................. ... ; • 6 2 . Route of the 1400 mile natural gas pipeline proposed by ostcoast Transmission Compacy , Ltd• ._. • • • . • • • • . • • • • . .. • • • . • • •. • . • . • • 12 3. General routes proposed by estcoast Trans mission ompany , Ltd., and orthwest atural Gas Compan: , the two chief con tenders, at that time, for the right to pipe natural gas to the acif'ic North west ••••••••••••••·····~················· ~ · 4. Pac ific Northwest Pi eline Oorporation1 s proposed natural gas pipe line route from· Texas to the Pacific orthwest••••••••••••• 19 Existing and proposed systems through which Pacific orthwest Pipel.ine Corporation -vrould supply eastern Canada with gas rrom the u. s. Southwest in return for an equal quantity from Alberta fields for markets in tho acific :fiorthwest.............. 6. Routes proposed by the pipeline companies competing to bring naturnl gas to the . Pacific ~rthwest •••••••••••••••••••••••••• 28 Pacific orthiest ipeline Corporation• s proposed route. The dotted line is Colorado Interstate' s proposed route and the squares locate proposed compressor stations on tho two lines•• •• • ••••••••••••• 37 8. reposed natUI'al gas pipe line routes in the three- way contract called the "biggest deal" in gas transmission history••••••.•••• 42 9. Pacific orthnest Pipeline Corporation' s pipeline ~utes with gas producing and market areas•••••••••••••• • •••••• •••••••••• 49 LIST OF FIGUR ·S {Continued) FIGURE Page 10. Portlapd Gas and Coke Company ' s service a_rea... .................. .......... ~ ... , . • • •... 11. Simplified map of ashington atural Gas Company l s construction to feed natural gas to its distribution system in Seattle•• 59 12. Area to bo served by Cascade Nntural Gas Corporation.... • . .. • • . ... • • . • • . .. • • • • • .. 62 NATURAL GAS AS A BASIS FQR RESOURCE DEVELOPMENT IN TEE PAC IFIC NORTHWEST CI1APTER I INTRODUCTION ~ Objective 2! ~ Study The purpose of this study is t-v1ofold : First, to bring together existing information an the coming of' natural gas to the Pac.ific Northwest and second, to ana... lyze its possible impact an the region's economy. Newspapers, commercial journals and other media have d.evoted many articles to the subject of tvhich no less than 172 articles directly concerned with gas for the Pacific Northwest have been read as background for this thesis. But there does not seem to have .been published a comprehensive account of the struggle, with its many ramifications, to bring natural gas to the Pacific North west. 1£o consolidate" ' the vast body of information on the coming of natural gas into a few pages is the objective -of the first part of the thesis. · The second portion of the study attempts to appraise the impact on the Pacific Northwest of a plentiful supply of natural gas. What eff'ect will 1t have on the eeo.nomy in general? What established industries \vill convert to natural gas? ~bat new industries might he attracted to 2 the. Pacif ic ITorthwest? Wb:at heretofor l.lllutili zed re sources will be exploited? How will natural gas alter the present energy base of the Pacific Northwest, and what advantage.s w1l.l aecx-ue from such alteration? The .answers to the.se questions are approached as factually-. as possible, with o.nJ.y an oceas.ional cro.asing of the ·threshol.d of conjecture:. !a! Pacific Northwest's En~rsz Baas It is appropriate, in a study of natural gaa as a basis for resource development icn the. Pacific Northwest, to t'irat consider t ho present energy pattern of the Pae1fie Northwest and compare this pattern to that of the nation as· a whole. The Paeifie Northnst is a fuel poor :area. It baa no proven oil# and so tar. only on.e eanmerc1ally produc• 1ng gas well. The bulk of ita requirements for coal and all. or 1ta requtrem&nts for oi.l have t.o be met by 1mpor tation from other areas. In 1952, ·at the requast of the Office of Defense Mobilization, the Department of Interior made a study on the energy supply pattern in Oregon and Washington, The results of this study are :ahown in the following table (19, pp.l-2): SOtl'RCES OF ENERGY United oregon & . State.a Washington (Pe-rcent oi' Total) ..............100 ............,_10.0_ Coal 49 lO Oil (excluding motor fuel) 23 ~5 Natural Gas 22 Wood Neg-• ~0 Hydro1 6 4.5 y These figures vte:re ealeulatQd on the basis Qf inher ent Btu' s. Hydroelectric pow&r converted to Btu• s. by using the central station equivalent :of 151 000 Btu• t per kwh. There has been a ecnsiderabl.fl ahitt in the energy supply pattern 1n the Uhited States betwaen 1940 and 1950. In th~ United Statea as . a whole~ _ th~ decline .in the use of coal has been b alaneed. by inereased use of oil and a .specta. cul~ ri-ae in the· ut1~1zat1on of natural gas.• whereas in the Paci.f'i.e Northwest the shift has been away from wo-od and coal to aydroell:}ctric powell". In th& Pacific No:rthlllest. energy from wood decreased from 22 pel? cent to 10 per cent between 1940 and 1950.; and e.nergy from coal. decrea.s.ed from 1'7 peer cent to lO per cent be tween l94?' and 1950. Conversely,. ~nergy from hydro a~eewic power 1:n the. Pa.cif:te Northwalft; !.ncrea.s·ed from 23 per cent in 1.940 to 45 per cent in 1950. - - In the _ p~cific Northwest the chief aouzac:e ot elect.r-io energy 1a hydro. Capacity in service . ~a of the BonnevUle Power Administration in 1955 was about 93 per cent bydroel~ctric and 7 per cent thermale~ectric.