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The majority of new energy production built in the Northwest in the past dozen years has come from either wind or natural gas. There is a de facto public policy based on economics, even if it's not codified, that encourages natural gas energy production, Dan Kirschner, executive director of the Northwest Gas Association, told a Chamber of Medford/Jackson County Forum audience Monday. "There are explicit public policies that say: Build wind," Kirschner said. "There's implicit public policies that say gas is the only other resource you can really build on a large scale to back-up wind or for base co-generation on its own." A 20-year cost analysis by the U.S. Energy Information Administration shows that wind and gas are the most economical energy sources. "Gas is economical because it has a smaller footprint, the land is inexpensive, and is fairly easy to permit," Kirschner said. "But it's more expensive because there's risk around the cost of fuel. Wind is less expensive because there is a pretty large land footprint with wind, and fairly expensive to build, but there is no fuel cost. So those two balance each other out and are both great resources for our region." Traditional power sources are necessary to back up alternatives like wind, which isn't necessarily available on demand. "On a hot day or very cold day, typically the wind isn't blowing in our (region)," he said. "So you've got to have a resource to firm it up to really enable that renewable resource we want." In North America, even though the number of gas rigs has declined from a peak of 1,600 six years ago to about 200 today, production has increased. "It's evidence of the improvements in production technology we're using," Kirschner said. He said the Northwest Gas Association members have examined the expanded demand expected as the result of the retirement of coal plants and general industrial demand increases, which could include the construction of methanol manufacturing plants in northwest Oregon and in Washington.  He said the scale of that increased demand would be matched by "an LNG export facility on the west coast of Oregon somewhere," cryptically referring to a controversial LNG pipeline and export facility that is proposed for Southern Oregon. Such an increase would expand the regional load by a million decatherms a day, he said,  or about half of our region's average daily load. "Pipelines are never built on speculation," Kirschner said. "They are only built when contracts are signed and project are real." At present, he said, the region's infrastructure is large enough to handle demand,  but if load-producing projects such as the LNG facility or methanol plant come on line, it might require expansion. He likened it to a shopping mall signing Nordstrom as an anchor store. "The mall gets built and other shops come along," Kirschner said. "There are opportunities for a big infrastructure project like this in the Northwest. If one gets built there maybe other economic development or environmental opportunities we can seize on because we have the critical mass to start an expansion project." He said the number of residential natural gas users has grown 144 percent since 1990, while the volume of gas has gone up 95 percent. "Consumption has stayed relatively flat," he said. "We're using less gas per customer, they're using it more efficiently as appliances get more efficient, and housing envelopes are more efficient." There are more than 100 years of natural gas reserves, he said, and the U.S. Energy Information Administration has forecast increased production of at least 10 percent each year. Petroleum remains the highest component of energy consumption in the region, exceeding all other individual sources — gas, hydro, coal, solar, nuclear, wind and geothermal — combined, he said. "Do we have an economic opportunity to make a difference on some of the objectives the region has set for itself, whether reducing greenhouse gas admissions, or cleaning up particulate matter in our air?" Kirschner said. "Yes, we probably do have a great opportunity." Reach reporter Greg Stiles at 541-776-4463 or [email protected] . Follow him on Twitter at www.twitter.com/GregMTBusiness , on Facebook at www.facebook.com/greg.stiles.31 , and read his blog at www.mailtribune.com/EconomicEdge.