Presenter says Pacific Northwest relies heavily on Canadian gas; pipeline constraints and weather drive local prices

Randy Schultz, a market analyst with IGI Resources Inc., told the Idaho Oil and Gas Conservation Commission on Feb. 18 that natural-gas pricing and reliability in the Pacific Northwest are shaped chiefly by a single major pipeline, limited regional storage and large flows of gas from Canada.

Schultz said IGI and other market participants view three principal supply pricing points for the Northwest — Sumas (British Columbia), the Alberta hubs, and Rocky Mountain points — and that most gas that serves Idaho, Washington and Oregon moves on Northwest Pipeline. He told the commission that roughly 80% of the gas serving the Pacific Northwest market (Washington, Oregon, Idaho and northern Nevada) comes from Canada.

Schultz described how the region’s pipeline is multi-directional and operates on “displacement,” meaning molecules nominated at one point do not necessarily travel the physical route to a distant city; instead, regional scheduling and nominations shift flows and prices. He said constraints at particular pipeline points can create sharp local price differentials: as an example, he cited a recent period when Sumas-priced gas was materially cheaper than Rocky Mountain gas but a constraint near Stanfield prevented traders from moving the cheaper gas to higher-priced hubs.

Schultz told commissioners that two near-term drivers of price are national storage balances and weather; he said unusually cold weather in the Midcontinent and East Coast earlier in 2025 pulled large volumes from storage and flipped storage balances from being above the five-year average in August to being below the five-year average later in the winter. He said traders expect storage balances to recover toward or above the five-year average by Nov. 1, 2025, but that weather remains an important short-term driver.

On regional storage facilities, Schultz listed Clay Basin and Jackson Prairie as major underground storage sites, and named Mist (Oregon) and a Northwest Pipeline liquefied facility at Stanfield; he noted Intermountain Gas operates a liquefied natural gas (LNG) facility near Nampa. When Commissioner Reebie asked about capacity, Reebie provided follow-up figures: Jackson Prairie working gas capacity reported as 25 BCF and Mist approximately 25 BCF, but Reebie noted Mist’s capacity includes a mix of interstate, intrastate and dedicated services and is therefore not fully fungible for all market participants.

Schultz said IGI moves about 600,000 MMBtu per day in winter and holds about 650,000 MMBtu per day of firm transportation on pipelines serving the region. He described common commercial practices: many commercial customers fix prices year-to-year or seasonally (Schultz estimated 80–85% of IGI’s industrial customers hedge to a fixed price by volume in a typical year), and most hedging is fixed-price NYMEX plus a basis differential rather than exotic derivatives.

He also discussed how potential LNG export projects in Canada could change flows. Schultz said the Woodfibre project (southern British Columbia) and the larger LNG Canada development (northern British Columbia) may alter how much Canadian gas is available to northwest U.S. markets; Woodfibre’s potential output could compete with existing volumes that otherwise flow to Washington, Oregon and Idaho.

Commissioners asked several follow-up questions about gas quality, storage and pipeline compression upgrades. Schultz said pipeline-quality specifications prevent gas below specification from entering the system; he said Northwest Pipeline is undertaking a compressor modernization and emissions-improvement program across multiple compressor stations over the next few years, and that upgrades will be rolled into pipeline rates.

The presentation was informational; the commission did not take action. Schultz’s contact information was provided in the meeting materials for follow-up.

Evidence cited: slides and oral presentation by Randy Schultz; Q&A with commissioners including Commissioner Reebie’s Jackson Prairie and Mist capacity figures.