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Now that we have gathered the natural gas, and run it
through a processing plant, we have the residue natural gas,
which is approximately 98% methane.
This again is what we call commercial or market grade
natural gas.
And it now meets the quality specifications of the
transmission pipeline.
Again, the overall function of the transmission pipelines is
to take gas from large producing areas and get it to
the market areas.
Here is a simplified map of the natural gas pipeline grid
throughout the United States.
There is pipe literally running from the very South
tip of Texas, Brownsville, all the way up to New York City.
That happens to be Transcontinental Natural Gas
Pipeline Company which is owned by the Williams
Companies out of my home city, Tulsa, Oklahoma.
But you can see there are pipes
traversing the United States.
A very extensive grid.
And if you'll notice, the
concentration in the Gulf Coast.
There are vast amounts of supply in the Texas,
Louisiana, Oklahoma, Arkansas, Mississippi, and Alabama areas
as we have both offshore and onshore production.
The shaded areas represent large supply basins.
The normal flow is from large supply basins
to the market areas.
Your largest areas of demand in the United States include
the Northeast, basically the Washington DC all the way up
to Boston corridor.
The upper Midwest which is going to be cities like
Cleveland, Detroit, Chicago, Minneapolis, Milwaukee.
The west coast, most of the entire state of California as
well as New Mexico and Arizona along the way.
Texas itself consumes a considerable amount of natural
gas, largely due to air conditioning loads in the
hotter months.
But also do to the
petrochemical refining process.
So that would also encompass the states of Louisiana,
Mississippi, and Alabama.
So a considerable amount of production in that area stays
at home as we like to say.
These are the all important new gas shale plays in the
United States.
There are various basins that you can see here.
The single most important one, in my opinion, is the
Marcellus shale in the Northeast.
The Northeastern part of the United States consumes a
considerable that amount of natural gas.
It is the premium price market for natural gas.
So you now you have a substantial amount of natural
gas production in the largest consuming area
in the premium market.
It has had a profound impact on supplies in the other areas
as a lot of that gas no longer goes to the Northeast because
it's not needed.
And so the price impact of the Marcellus shale has been
dramatic in just the last two years.
It is one of the major causes of the lower natural gas
prices that we see today.
This is an indication of some of the activity, and the
estimated recoverable reserves, over
a three year period.
You can see that the Haynesville is among the
largest, but the Marcellus is very significant because of
the location of the potential reserves coming out of there.
This map also does not show the new Utica shale formation
that has occurred in Ohio and is being drilled and explored
as we speak.
So we talked about gathering pipe, which runs anywhere from
about two to six, even 12, inches.
Transmission pipelines, because they're major function
is to connect supply areas to market areas, and because they
literally have thousands of supply sources--
well heads, pipelines, processing plants, et cetera--
they run in a diameter more in the range of 16 inch on the
low side, to as much as 42 inches on the high side.
They use compressors to move the gas along.
The range of pressure can be anywhere from a low of 200 to
as much as 1500 pounds per square inch.
Natural gas flows to the point of least resistance.
That is the point of consumption is going to have
the lowest pressure, and all the supply areas are going to
have the highest pressures.
Pressure is increased along a system to maintain the flow
from the supply area, to the market area, and again we use
large mainline compressors to accomplish that.
This particular map illustrates, in a very generic
fashion, what would be the difference between
transmission lines and gathering lines.
These are the assets of ONEOK.
You can see the spidery yellow lines
represent gathering lines.
Whereas, the red lines represent a
transmission system.
The yellow squares show you processing plants throughout
the gathering systems.
And the red squares represent underground natural gas
storage facilities.
These are pictures of actual pipeline construction.
The very top left picture, they have
cleared a right of way.
That's the total area that the pipeline would lease to dig a
trench and lay its pipe in.
Pipes are generally in 40 foot sections.
In this particular picture, it's the first stage where the
pipe is actually laid in the trench.
In the second picture, in the center there, pipe is welded
together at each end of those 40 foot sections.
In this particular case, they're bringing the pipe over
a hill and some rough terrain.
And in the lower right picture, you can see the
machinery that's actually used to lower the pipe back down
into the trench once it has been welded together.
And then the trenches are covered up with dirt.
That becomes, then, the pipeline's right of way which
they are obligated to maintain.
And the pipe must be buried at least a depth of six feet.
You can see here the finished pipeline.
That's the right of way cutting through the trees with
the ground over it.
You won't see the pipe.
Except occasionally, you'll see one of these above ground
valves stick up out of the ground.
This is a point where the pipeline can
control the flow of gas.
They can allow flow through the pipeline here, or they can
close it off in case of an emergency or if any type of
maintenance has to be done.
But again, you'll see these types of right of ways.
They can look very similar for pipelines,
electrical lines, and other.
So we have some terminology.
We talk about the receipts into a transmission pipeline.
That's just the sources of gas that come into the
transmission pipelines themselves?
We already know that we have some well heads.
So single high pressure wells could be tied directly into a
transmission pipeline.
We also have the gathering systems.
Multiple wells are brought into a common point otherwise
known as a central delivery pointer or CDP.
The processing plants have their residue lines where the
98% methane residue gas is delivered into the
transmission system.
And as you saw on that simplified map of the US
pipeline grid, pipelines cross one another.
So when they cross one another they have a tendency to go
ahead and tie together so that they can exchange gas.
Both the interstates and the intrastates.
Interstate pipeline companies are pipes that cross just one
state border.
Intrastates, all of their pipe is contained
within a single state.
And then we have underground storage facilities.
Those storage facilities, when they are withdrawing gas, are
providing gas to the transmission pipeline systems.
Therefore, they represent a source of supply
or receipt as well.
We then have the deliveries or the take away.
These are the places that the transmission pipelines will
ultimately deliver natural gas.
We refer to the gas companies as local
distribution companies.
The point of delivery between a transmission pipeline
company and an LDC we refer to as the city gate.
It is dropped off at the city.
There are multiple end users that are directly connected to
the transmission lines.
They do not receive their supply from a gas company.
One of the primary examples is that of power companies where
power plants are tied directly to the transmission pipeline.
Again, this idea that the pipelines are all connected
through a grid system.
One pipeline delivers gas to another pipeline.
Therefore, that becomes a delivery point for the first
transmission pipeline company.
And storage facilities, gas that is stored underground is
delivered to the storage facility by the transmission
pipeline company.
Pipeline systems run 24 hours a day, 365 days a year.
And so they have electronic monitoring systems.
The term for that is known as SCADA which stands for
Supervisory Control and Data Acquisition.
All the information on the pipeline is transmitted
electronically to a central monitoring and control center.
They're looking at gas pressures,
the amount of flows.
And they could also electronically control a
number of pipeline facilities.
The more sophisticated SCADA systems for natural gas
transmission pipeline companies can actually
remotely open control valves, start or stop compressors,
open and control regulators.
Regulators basically regulate the pressure at certain points
in the pipeline.
Here's a picture of an actual gas control center.
These people are in there 24 hours a day monitoring all the
activity across the pipeline system.
This is an actual pipeline explosion, pipeline mishap,
that occurred because pipeline pressures were not being
monitored closely enough.
And also, because the pipeline was not being inspected on
standard intervals as required by the Department of
Transportation.
This explosion occurred in Arizona through a recreational
campground.
You can see the crater that was blown out when the natural
gas was ignited.
In the foreground is actually some molten dirt.
This picture shows that there's still the natural gas
in the pipeline burning out.
Again, look at the very large crater that was created by the
explosion of the natural gas.
There's the cutaway.
This is where the pipe was welded to the
next section of pipe.
And the weld actually gave way.
This is the scorched earth that was in the area around
this particular explosion.
This is an actual piece of the pipeline itself, the tube, a
we call it.
Steel sheets are actually rolled into those pipe
sections horizontally.
And then the weld is done on the circumference when the
pipe sections are joined together.
So this is an actual rolled piece of pipe that was part of
this explosion and blew right out of the line.
Here we see the lateral seam on what was the rolled pipe.
Notice that there's snow in this picture, where there was
absolutely none in the prior pictures.
Again, this is what can happen when pipelines are not
properly monitored for pressure and they're not
properly inspected and maintained.