For a few hours a day, on 50 days of the year, New England has a gas problem – not enough natural gas is available to meet demand for both heat and electricity. Two years ago, this problem led to dramatic spikes in the price of natural gas and the cost of electricity. Since then, how to solve that problem has been the source of political, economic and environmental debate.
The solution most often pushed by many corporate and government entities is to “flood the market” with new gas via one or more big new pipelines, with the multi-billion dollar cost to be borne by electric ratepayers (in other words, all of us). But that’s hardly the only solution – nor is it the most efficient, timely, or cost effective.
Since that troubled winter two years ago, as the clamor for big new pipelines has grown, Conservation Law Foundation has been examining alternative solutions. In a new white paper developed for CLF by Skipping Stone Consultants, we show how we can avoid the expense and long-term impacts of new infrastructure by instead maximizing the use of the pipelines and other infrastructure we already have. This solution not only addresses the supply problem on those few hours of the 50 coldest winter days, it also saves industrial, commercial, and residential customers millions of dollars. And it circumvents the need for costly and enormously inefficient infrastructure that will ultimately undermine regional efforts to meet the urgent challenge of climate change.
The Myth vs. The Reality
Pipeline proponents would have us believe that there is a gas shortage in New England and that the only way to save businesses and individuals from unreasonable electricity price spikes is to build massive new pipelines into and across the region.
It’s true that, as managed now, New England’s natural gas delivery system – its pipelines, storage and import facilities – can’t deliver enough natural gas to meet demand during that short winter period when gas is in high demand for heat and electricity. But the reality is, New England’s pipeline problem is not one of capacity, but of deliverability. For the majority of the year, the region’s natural gas system operates at less than 50% capacity. On those coldest days when natural gas is in highest demand, the problem comes down to efficiency and deliverability – meaning we can’t get the gas to a specific location at a specific time to meet that demand.
Understanding New England’s current “gas problem” as one of deliverability rather than pipeline capacity reframes the debate – and makes clear the most efficient, timely, and cost-effective solution: increasing our use of the region’s existing liquefied natural gas (LNG) infrastructure.
New Pipelines Will Hurt, Not Help
Building the massive new pipelines currently proposed is the most expensive and least effective means of addressing our current problem. It takes years to build a new pipeline – meaning it will be years before any of us see any benefits in our electric bills. What’s more, you and I could even see an increase in our bills if proposals to fund these new pipelines on the backs of ratepayers move forward.
These hard costs of construction and ratepayer impact are easy to track. What’s harder to measure – and arguably more important – is the long-term impact on our climate if we fail to take meaningful steps to shift our power grid away from reliance on fossil fuels like natural gas. Yes, gas is considered cleaner than coal and oil by many – but that’s all relative, given that methane, a byproduct of natural gas production, is up to 80 times more potent a greenhouse gas than carbon. With regulatory regimes like the Clean Power Plan and existing New England state regulations mandating aggressive reductions in greenhouse gas emissions, major investments that would increase our consumption of natural gas simply don’t make environmental or economic sense.
LNG Can Make A Difference This Winter
The best means of solving New England’s winter gas issue is to better utilize our existing natural gas infrastructure – specifically, our existing LNG facilities. LNG import terminals provide a ready supply of natural gas on pipelines from the east that are currently underutilized – the use of which will relieve constraints on the remaining pipeline system. Local gas distribution companies have LNG storage facilities that have ten times the capacity of our existing pipeline system. Right now, those storage tanks are filled at the beginning of the winter and then drained down over the heating season.
We propose that this storage be supplemented all winter long, to ensure supplies can be available and distributed throughout the existing New England-wide storage network. This would shore up the amount of LNG stored in the region during the winter months. The combination of LNG from the import terminals to the east and from storage units throughout the region would supplement the natural gas supply coming in through existing pipelines – freeing up more of that existing pipeline capacity for use by electric power plants.
The LNG needed to supply this approach can be contracted for with short-term contracts, unlike the locked-in 20-year commitment of a new pipeline. This means lower costs, saving local gas distributors and all of us ratepayers more than $340 million a year – and as much as $4.4 billion over 20 years – compared to building a big new pipeline. It also means greater flexibility for New England to make the necessary transition to rapidly developing clean alternatives – such as battery storage and increased distributed solar. And, even better, this solution is technically feasible and could be implemented this winter.
Download our white paper to read more about how better use of our LNG infrastructure can address our gas deliverability problem efficiently and effectively – in ways that are good for our wallets and our environment.