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IMPEDIMENTS TO GROWTH MUST BE OVERCOME IN THREE KEY NATURAL GAS MARKETS, STUDY SAYS

 IMPEDIMENTS TO GROWTH MUST BE OVERCOME
 IN THREE KEY NATURAL GAS MARKETS, STUDY SAYS
 WASHINGTON, May 8 /PRNewswire/ -- The natural gas industry must overcome impediments to growth in three key markets before gas can reach its economic potential, a study sponsored by the INGAA Foundation said.
 The study, conducted for the foundation by RCG/Hagler, Bailly Inc., said the three markets where there is significant growth potential between now and 2000 are electric power generation, natural gas-fueled vehicles (NGVs) and gas cooling.
 The study was released by INGAA Foundation Chairman James D. Lutton, vice president/power systems of Solar Turbines Inc., at a press conference yesterday.
 Citing previously published projections, the study said that if the impediments are removed, demand growth for the three markets could be between 1.6 trillion cubic feet (Tcf) and 4.2 Tcf by 2000.
 For the electric generation market, the RCG/Hagler, Bailly study said, a major impediment is power generators' fear that the gas industry will be unable to deliver gas at stable prices for the long term. Gas industry restructuring has caused further uncertainty, the report said.
 In the gas vehicle market, the report said technical issues are the key impediments, as well as a perception by customers that gas may not be available at low prices.
 And in the gas cooling sector, impediments include equipment reliability, the complexity of gas cooling technologies, and the need for local distribution companies to pay greater attention to customer needs, including providing integrated heating and cooling services.
 In order to overcome these obstacles, the study asserted, the gas industry should consider several major initiatives.
 It said that to capture the power generation market, the gas industry should:
 -- Address natural gas reliability by providing objective
 information on the gas industry's ability to meet projected
 loans, especially power generation swings, and recommend ways
 to reduce or eliminate curtailment risks.
 -- Study and understand emerging electric utility regulatory
 developments, such as demand-side management, integrated
 resource planning and competitive bidding, in order to assure
 that the gas industry can take full advantage of the market
 opportunities these developments present.
 -- Offer technical assistance and institutional support for those
 marketing gas to electric utilities.
 -- Put greater resources into state-level programs to influence
 decisions by state regulatory agencies.
 For all three markets, the report recommended that the gas industry develop collaborative marketing strategies; adjust research, development and demonstration priorities; and link regulatory issues to the needs of customers.
 On the collaborative strategies recommendation, the study said the gas industry should coordinate the marketing efforts of such groups as the National Gas Vehicle Coalition, the American Gas Cooling Center and the INGAA Power Generation Task Force with the technology advances made by equipment manufacturers, the Gas Research Institute and the Department of Energy.
 It suggested the establishment of a program within an organization such as the newly established Natural Gas Council to develop strategies to overcome generic impediments to new market development in power generation, NGV and gas-cooling markets.
 Lutton told the press conference: "We believe these three markets have the potential to significantly improve the economic outlook for the natural gas industry by the end of this decade. But the gas industry needs to put its differences aside and make a unified effort to grow these new markets.
 "An approach like the one outlined in this report could be the first step toward a truly collaborative natural gas marketing strategy," Lutton said.
 The INGAA Foundation was formed in 1990 by the Interstate Natural Gas Association of America (INGAA), a Washington-based trade association representing interstate natural gas pipelines in the United States and interprovincial pipelines in Canada. The INGAA Foundation, made up of pipelines and pipeline suppliers, sponsors research on ways to advance the use of natural gas in North America.
 -0- 5/8/92
 /CONTACT: S. Lawrence Paulson or Cheryl W. Hoffman of the INGAA Foundation, 202-626-3200/ CO: INGAA Foundation ST: District of Columbia IN: OIL SU:


MH -- DC002 -- 8039 05/08/92 11:05 EDT
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Publication:PR Newswire
Date:May 8, 1992
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