M a r c h 1 4, 2 0 14 ADVANCING NATURAL GAS IN THE MULTIFAMILY BUILDINGS MARKET Northeast Gas Association Sales and Marketing Conference Rick Murphy Managing Director Sustainable Growth American Gas Association
O U R R O L E I N P O L I C Y Delivering on America s National Priorities National energy policies should help: Improve Energy Efficiency Ensure energy Affordability Reduce Consumer Costs Reduce Greenhouse Gas Emissions Increase America s Energy Security and Support American Jobs Create a Level Playing Field 2
I N D U S T RY I S S U E S Top 5 Advocacy Priorities 1. Pipeline Safety 2. Natural Gas as a Foundation Fuel 3. Natural Gas Supply 4. Infrastructure Cybersecurity 5. Efficient Natural Gas Solutions 3
AGA Sustainable Growth Function Objective: To support the growth objectives of natural gas distribution companies by advancing policies that provide sustainable growth opportunities for the direct and distributed use of natural gas in the residential, commercial and industrial markets and in the transportation sector. Expand Infrastructure Advance Product Utilization Enhance Industry Position 4
Sustainable Growth Areas of Focus Efficient Thermal Applications Natural Gas Vehicles and Stations Clean & Renewable Energy Distributed Energy Natural Gas in a Smart Energy Future Monitor, Assess and Develop Policy Facilitate Market Development through Policy and Advocacy Promote Long-Term Role for Natural Gas in Homes, Buildings and Communities Support Industry Commercialization Initiatives for Natural Gas Applications Support Continued End-use Technology Development 5
Energy Value
Value Chain Efficiency 7
Impact on Overall Energy Consumption Residential Energy Consumption 8
Full-fuel-cycle Greenhouse Gas Emissions Benefits of Natural Gas Natural gas used in homes reduces greenhouse gas emissions 9
Residential Energy Equivalent Prices ($/MMBTU) $40 $35 $30 $25 $20 $15 $10 $5 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Natural Gas Fuel Oil Propane Electricity Source: U.S. Energy Information Administration 10
Efficiency Standards Advocacy For appliances for which there is a choice of fuel, such as storage water heaters and heating equipment, efficiency ratings should be calculated using the extended site measure of energy consumption Recommendation of the National Academies 11
Advocacy and Alliance Building to Advance the Value Proposition of Natural Gas Legislators (Federal and State) Federal Regulatory Agencies Depart of Energy (DOE) Environmental Protection Agency (EPA) National Organizations Representing State Regulators and Energy Policy Makers National Association of State Energy Officials (NASEO) National Association of Regulatory Utility Commissioners (NARUC) Efficiency Community Environmental Community National Organizations Representing Key Trade Allies National Association of Home Builders (NAHB) Air Conditioning, Heating and Refrigeration Institute (AHRI) The Indoor Environment and Energy Efficiency Association (ACCA) 12
MULTIFAMILY BUILDINGS HISTORICAL TRENDS 13
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Units Completed (In Thousands) Number of Multifamily Units Completed By Year By Region 800 700 600 500 400 300 200 100 (Z) Overall U.S. Northeast Midwest South West Source: U.S. Census Bureau 14
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Percentage Natural Gas Share of Multifamily Units Completed By Year By Region 100 90 80 70 60 50 40 30 20 10 0 U.S. Northeast Midwest South West Source: U.S. Census Bureau 15
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Percentage Share of Multifamily Units Completed By Year By Heating Source Overall U.S. 80 70 60 50 40 30 20 10 (Z) Natural Gas Electricity Oil Source: U.S. Census Bureau 16
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Percentage Share of Multifamily Units Completed By Year By Heating Source Northeast U.S. 100 90 80 70 60 50 40 30 20 10 (Z) Natural Gas Electricity Oil Source: U.S. Census Bureau 17
Percentage Share of Multifamily Units Completed By Year By Heating Source Overall U.S. 70 60 50 40 30 20 10 (Z) Natural Gas Electric Heat Pump Electric Resistence Oil Source: U.S. Census Bureau 18
Wide Range of Factors Impacting Multifamily Trends First Cost Differentials Between Natural Gas and Electric Heating and Water Heating Equipment Building Infrastructure Cost Differentials and Challenges Retail Price Differentials Between Natural Gas and Electricity Regional Distribution of New Multifamily Buildings Economic Conditions Technology Advancements 19
Opportunities to Enhance Natural Gas Share of Multifamily Market 20
A $5 million prize for the community that leads the way in energy efficiency Objectives Foster innovative approaches to energy efficiency Educate the public and engage students in energy issues Grow markets for products & services that facilitate energy efficiency Eligibility Criteria Cities and counties in the U.S. with a population from 5,000 to 250,000. Judging will be based on reductions in Residential and Municipal buildings energy use*, innovation of approach, quality of community outreach, sustainability, and replicability * Based on Source energy 21
First web-enabled, fully interactive green building assessment and certification program An efficient and affordable alternative to LEED Provides an effective way to advance the overall environmental performance and sustainability of new and existing commercial and multifamily buildings Four paths for evaluating energy performance. Two paths use a source energy convention for measuring energy. 22
Launched by President Obama in December 2011 to improve the efficiency of American commercial buildings, decrease energy costs and emissions while simultaneously creating jobs and building a stronger economy. Organizations committing to the BBC agree to: Conduct an energy efficiency assessment and pledge to an energy savings goal Implement plans to achieve lasting energy savings Report results and share best practices for saving energy In 2013, the Department of Energy (DOE) and the Department of Housing and Urban Development (HUD) have partnered to expand the Better Buildings Challenge to the multifamily residential sector 23
Natural Gas Industry Collaboration Compendium of Multifamily Programs Used by AGA Members Forums to Share Challenges and Successes Addressing Policies Impacting Natural Gas in the Multifamily Sector Collaborate with Energy Solutions Center and Gas Technology Institute to Advance Technology Solutions for Multifamily Buildings 24
Questions? Rick Murphy American Gas Association 202-824-7301 rmurphy@aga.org 25