Another winter, another warning from the folks who run the power grid.
“Especially during the coldest weeks of the year, the natural gas infrastructure in New England is inadequate to meet the demand for gas for both heating and power generation,” said a recently emailed statement from Vamsi Chadalavada, executive vice president and chief operating officer of ISO-New England, the Independent System Operator that runs the New England power grid.
The warning has become a seasonal ritual, along with the announcement, for the third consecutive year now, that ISO’s Winter Reliability Program will be in effect during the Dec. 1 to March 1 heating season.
The warning once again focuses all eyes on natural gas pipelines – viewed as either a big answer to the region’s power difficulties or a big problem, depending on whom you talk to.
“We have a system that’s only working when the weather is mild or when world oil prices are low. We need a grid that can work all the time – especially in the winter,” said Katie Dykes, the Department of Energy and Environmental Protection’s energy chief, who oversees implementing the state’s Comprehensive Energy Strategy, created three years ago.
The strategy’s core is increased use of natural gas, which is seen as cleaner than oil or coal for electric generation or oil for heating. And even with oil at its lowest price in years, gas is still about 20 percent cheaper.
ISO has consistently called for more natural gas infrastructure, such as pipelines and liquefied natural gas storage, to supply the region’s power plants, which have gone from generating 15 percent of the grid’s energy with natural gas to nearly half. ISO’s data also show that nearly two-thirds of proposed power projects are natural gas-fueled.
Business groups generally support the energy strategy and the addition of gas infrastructure as the way to lower Connecticut and the region’s notoriously high electric rates.
“Our primary focus is on getting the additional gas to the gas-fired power plants,” said Eric Brown of the Connecticut Business and Industry Association. “We are dealing with immediate economic pressures in terms of Connecticut and New England’s competitive position.
“This is something that needs to have both a short-term and a long-term strategy.”
Environmental groups, many of which are fighting the five pipeline projects in development now, have never been happy with a focus on natural gas.
Cleaner than oil and coal? Yes. But still a fossil fuel that can add to climate change, they say. They also point out that an expanded infrastructure comes with such a large price tag that swapping it out for renewables like solar or wind in the near-term is unlikely.
The focus should be on renewables now, not gas, say many – including the New England-based environmental advocacy organization Acadia Center.
“Our position has been, let’s make sure we’re doing all of our homework on assessing all of our energy options before we make a decision about investing in natural gas infrastructure which will be with us for many decades,” said Bill Dornbos, Acadia’s Connecticut director and senior attorney. He and others said that, in addition to renewables, energy efficiency and better-targeted energy use are important strategies. “It’s a whole spectrum of alternative resources. Several don’t require big capital investments” and don’t lock you into a fuel type.”
That point of view got an enormous boost last month when a report done for the Massachusetts attorney general concluded that new gas pipelines were not needed just to keep New England’s lights on. “Under business-as-usual circumstances, the region can maintain electric reliability through 2030, even without additional new natural gas pipelines,” the report’s summary read. “Even under a ‘stressed-system’ scenario, there are cheaper, less carbon-intensive ways to ensure electric reliability.”
While the environmental community immediately took that to the bank, others did not.
“We think that the enemy of lower costs in this region is inaction,” said Carl Gustin, spokesman for the New England Coalition for Affordable Energy, a business coalition (CBIA is a member) funded by the American Petroleum Institute and America’s Natural Gas alliance. The coalition has commissioned its own studies that show higher energy costs and loss of disposable income and jobs if no new gas lines are built.
“I don’t buy the argument that, by avoiding making decisions today, we’re creating a better future for renewable technologies,” Gustin said. “The potential economic impacts of not having adequate low-cost supplies today for this region are significant. We’ve already seen the volatility.”
After more than a dozen studies in the last three years, DEEP’s Dykes said: “Frankly it’s time for us to move past studies and get real price discovery to find out, instead of arguing about different assumptions that various consultants may make, about the cost of transmission or how much efficiency is out there or about the long-term cost of a pipeline.”
The real costs, she said, will come from market-based approaches that look at “all of the above” energy options. “To the extent that people think we are choosing gas over renewables, I think that our policy is fundamentally the opposite.”
All-of-the-above vs. renewables vs. gas
Dykes is specifically referring to legislation passed last session and two years ago. Together they authorize the use of the cleanest large-scale renewables, such as solar and wind for up to 15 percent of the state’s annual energy consumption. That plan has since morphed into a three-state effort with Massachusetts and Rhode Island.
A request for proposals has gone out on behalf of all three states under which DEEP and representatives from the other states will choose energy projects from the submissions and utilities will enter into long-term contracts for their electricity. A recent conference for those interested in submitting such proposals had more than 100 participants.
That process will be followed by two more requests for proposals for things like energy efficiency programs and proposals for natural gas.
“And they’re all going to land, and we’re going to look at them side by side and compare prices,” said Dykes’s boss, DEEP commissioner Rob Klee. “It is all-of-the-above, and it is looking carefully at this winter peak problem.
“We’re happy to fix that problem with any of the resources that can fix that problem – wind, solar, efficiency, large-scale hydro, small-scale hydro and/or natural gas. And that’s really our approach – not the throw-all-our-eggs-into-the-pipeline basket.”
The winter gas problem started several years ago when the flood of fracked natural gas available from deposits such as the Marcellus shale in Pennsylvania sent prices dramatically down. With oil prices extremely high at the time, heating customers in Connecticut began switching from oil to gas in droves, and oil-fired power plants in New England that already could use either fuel or could switch to gas, did.
From 2000 through last year, the proportion of power used in New England that was produced by oil-fired generators dropped from 22 percent to one percent. Coal dropped from 18 percent to 5 percent, while gas increased from 15 percent to 44 percent, according to ISO.
The Comprehensive Energy Strategy built on that and called for converting 280,000 heating customers to gas in 10 years. From 2013 through the end of this year, estimates are that about 58,000 conversions have been done. Residential conversions are said to be lagging while the commercial and industrial sectors are stronger.
|Year||Gas conversions||Miles of main installed|
|UI||Gas conversions||Miles of main installed|
In that time, about 230 miles of local gas mains have been added, but the interstate pipeline capacity hasn’t changed. That meant there wasn’t enough gas for both heating customers and power plants during the coldest weather. The way natural gas contracts work, heat gets first crack, which left power plants capable of burning oil scrambling to buy it on the spot market – the most expensive oil out there. ISO also was forced to fall back on the dirtiest plants – coal.
During a cold snap in the winter of 2012-2013, some gas plants couldn’t run, and some oil plants ran out of fuel, pushing the New England grid close to power outages, and the cost of generating electricity surged. That’s when ISO started the winter reliability plan, making it easier for power plant operators to stockpile oil.
While efficiency measures were flattening the electricity demand throughout the grid, ISO’s move was not a moment too soon. Last winter the grid also faced a number of major plant shutdowns: Brayton Point and Salem Harbor, both coal and oil plants in Massachusetts, which together produced about 2,300 megawatts; and Vermont Yankee, a 604 megawatt nuclear plant. And now the Pilgrim nuclear power plant, with a capacity of 677 megawatts, will shut down by mid-2019.
Last winter liquefied natural gas came to the rescue. For the first time in many years, LNG’s price was low enough that it was imported to the Boston area and injected into the pipeline system to flow east to west, opposite to the usual direction. That took the pressure off the rest of the system.
Oil prices also were so low that, at times, ISO opted for oil generation instead of gas. Bottom line – despite incredibly cold weather, there was no grid or gas crisis last winter, and prices didn’t spike as badly as they had in previous cold snaps. Environmental groups point to that, as well as the Massachusetts attorney general’s report, as evidence more gas and pipelines are unnecessary.
But Klee and Dykes say because renewables like wind and solar are intermittent, something else is needed when the wind isn’t blowing or the sun isn’t shining.
Something like gas.
But Greg Cunningham, vice president and director of the Conservation Law Foundation’s clean energy and climate change program warned that greenhouse gas reduction mandates in the Global Warming Solutions Act adopted by Connecticut and other New England states mean gas can only be a temporary solution.
“In light of those mandates, there will have to be significant reductions in use of natural gas in the next 20 years,” he said. “A big investment today is ultimately going to cost us in the future when we have to make that transition to a cleaner resource. And these pipelines that are 100-year infrastructure suddenly become stranded costs for those ratepayers that got stuck having to bear the burden of them.”
That hasn’t stopped the pipeline companies.
The two major pipeline owners in the region, Kinder Morgan, which owns the Tennessee pipeline, and Spectra Energy, which owns Algonquin between them have five projects somewhere in, well, the pipeline.
Nearly all of the project portions in Connecticut use existing pipeline routes to mainly add a second pipe, known as a loop, to increase capacity or do what’s known as a take-up/relay – essentially replacing old pipes with newer and often larger-capacity ones. The projects also include new or upgraded compressor stations. But very little involves brand new pipeline where there is none now.
Spectra’s Algonquin Incremental Market project, AIM, has been adding small sections in Connecticut already. Its Atlantic Bridge project has just filed its formal application with the Federal Energy Regulatory Commission – FERC. It has a November 2017 estimated in-service date. It is less than half the size originally envisioned after commitments for the gas dropped out. FERC does not allow speculative building of pipelines.
The biggest Spectra project is Access Northeast, designed specifically to provide gas for electric generation, but it is still at least a year from even a formal application. More than 95 percent of the line would use existing pipeline and utility corridors. It would also include an LNG storage facility in Acushnet, Mass.
Kinder Morgan’s Connecticut Expansion is an 8.3-mile second pipeline that runs from Suffield to around Bradley International Airport, with even smaller components in New York and Massachusetts.
The biggest and most controversial project is Kinder Morgan’s Northeast Energy Direct. It’s a 420-mile project from Pennsylvania into Massachusetts and New Hampshire. Only 14.83 miles of the pipeline would be in Connecticut, all along existing pipeline or utility rights of way.
But that little stretch, which Fred Reise, who reviews public transportation and utility projects at DEEP, referred to as the “flea on the tail of the dog,” is the one, he said, “that has people going ballistic.”
About six miles of it cuts through MDC reservoir land in West Hartford and Bloomfield. There is pipeline there already. Even so, environmental groups contend that under current regulations, that pipeline – which is quite old – would not be allowed. They also object to the increased right of way, as well as the even wider footprint during construction.
Following Kinder Morgan’s formal application to FERC on Nov. 20, eight organizations released a joint statement objecting – citing potential danger to drinking water from leaks in particular, and other environmental concerns.
“Speaking for Rivers Alliance, our objection is because of the probably unnecessary disturbance of water resources and lands that are supposed to be protecting high-quality water resources,” said Margaret Miner, the alliance’s executive director. “We do not have a position on natural gas per se.”
But other groups, such as Food and Water Watch, have broad objections, including use of any natural gas derived from fracking. Nisha Swinton, senior organizer for New England also said, “It is very clear new pipeline proposals will be used for export to Canada.”
That eventuality is unlikely because of stipulations in Connecticut’s legislation, although New England’s pipelines do connect to Canadian ones. So far in the region, there have only been LNG imports, like those used last winter, not exports.
In the meantime, Swinton said her group is asking FERC for comprehensive environmental reviews of the entire pipeline infrastructure in New England. “We believe there has been inadequate oversight,” she said.
But for Northeast Direct, Reise said: “There’s no reason to think that adding a second pipeline to that corridor is going to yield any results that are different from that first pipeline being in that corridor.
“If there’s anything the MDC has grounds to be worried about, it might be because of the blasting that might be necessary,” he said
Rep. Lonnie Reed, D-Branford and co-chair of the Energy and Technology committee, has heard just about every argument and complaint in the book about natural gas. An unabashed proponent of “all-of-the-above” electric generation, she wants competition to sort out what systems to use and said, based on calls she gets, there are a lot of people who don’t know they have pipelines running through their communities.
“All of these little battles have to be fought one by one,” she said. “Educating people in the community and just trying to make the best decision to keep the lights on and the heat going.”
On the other hand, she said, “There are people who just hate the idea of pipelines and I don’t blame them. In a perfect world, I always say, hummingbirds would generate electricity.”
Proposed Natural Gas Pipeline Projects in the Northeast
Tennessee/Kinder Morgan permalink
Connecticut Expansion: A Kinder Morgan project along its Tennessee pipeline, it is an 8.3 mile second pipeline that runs from Suffield to around Bradley airport, with even smaller components in New York and Massachusetts. It is expected to be in operation for the 2016-2017 heating season.