The need for pipeline infrastructure is at the heart of the fight between proponents and opponents. Proponents claim that pipeline constraints which limit the flow of gas into New England are what causes high electricity rates. This misleading information fails to highlight that the pipeline constraints are not 24 hours per day or 365 days per year. Rather they only occur for a few weeks during the coldest days of winter. Therefore new large pipeline infrastructure would deliver excessive yearly amounts of gas far beyond any current or future needs of New England.
This same pipeline constraint argument was used 2 years ago when Tennessee Gas Pipeline/Kinder Morgan (“TGP/KM”) proposed the Northeast Energy Direct (“NED”) pipeline. In fact TGP/KM went so far as to use the term, “energy crisis” in justifying their NED proposal. In the end it was the local distribution companies which settled the fight. Pipeline companies do not typically build a pipeline with capacity that isn’t largely subscribed and the local distribution companies cannot afford to subscribe to obsessive amounts 24 hours per day or 365 days per year without the customers base to pay for it. The result was TGP/KM admitting, “inadequate capacity commitments from prospective customers and a determination that the Project is uneconomic.”
Bottom line, there was no full time need for additional pipeline capacity to justify NED. Further information about NED is below:
TGP/KM first proposed a 12″ lateral pipeline into NH to meet NH’s need. Later they proposed a massive expansion of the NH portion to a 36″ pipeline transporting 2.2 billion cubic feet/day (“bcf/d”). In July of 2015 they downsized the proposal from a 36″ pipeline to a 30″ pipeline decreasing the capacity to 1.3 bcf/d. Rather than try to follow this moving target of supply it’s easier to focus on the NH demand. Currently Energy North/Liberty Utilities is the only NH local distribution company (“LDC”) to sign an agreement with TGP/KM for NED capacity. That agreement is for 115 dekatherms or 0.115 bcf/d. Therefore the current and future NH demand is currently 9% of what TGP/KM has proposed to supply.
Further, Liberty Utility’s agreement is not solely for new capacity. 0.05 bcf/d of their 0.115 bcf/d contract is to replace existing capacity from Dracut, MA. Therefore Liberty’s need falls to a mere 0.065 bcf/d or 5% of what TGP/KM has proposed to supply.
TGP/KM claims the NED pipeline is in response to an “energy crisis” in New England and continues that New England pays some of the highest electricity rates in the country. Before falling for these misleading statements, recall from above that the only NH subscriber to the NED pipeline is Liberty Utilities. Liberty Utilities supplies heating fuel to homes and business. Despite 2 years of KM’s efforts, not a single contract has been signed under NED for the generation of electricity. One would assume that if there really was an “energy crisis” in New England, it would not be so difficult to find power plant subscribers.
One reason for a lack of power plant subscribers is that NED is not the only solution to increased supply for New England. The graphic to the right offers insight into the number of pipeline proposals in the region and suggests we question, “Does New England need every pipeline proposed and what will happen to our rates when we ultimately must pay for the construction of all of these projects?“
Across the border of Massachusetts, the need for such a massive pipeline as NED is also being questioned.
Questioning the Need for the Proposed Kinder Morgan Gas Pipeline
We don’t need Kinder Morgan’s pipeline – LNG or fixing leaks can address our 1 percent problem
“The case for need is generally predicated on the winter peaking problem. Winter is a time when the weather can be dangerous. People are vulnerable. It’s a scenario screaming for exploitation by an opportunistic businessman looking to export natural gas to global markets.” Continue …
Kinder Morgan deal with Liberty for pipeline space comes under fire at PUC
“The Kinder Morgan pipeline company has touted its shipping agreement with Liberty Utilities as proof that a new natural gas pipeline is needed in Southern New Hampshire. But questions about the contract are being raised by the consumer advocate on the Public Utilities Commission, and by the PUC’s own expert consultant.”
“The company has the obligation to show that what they are proposing is a cost-effective option, and the Office of Consumer Advocate’s position is that the company hasn’t made that showing,” said Consumer Advocate Susan Chamberlin.
“They made certain assumptions about the amount of capacity and effect on rates that we don’t believe are adequately supported by the facts,” she said. “So we’ve asked the PUC to order them to undertake more analysis to show the cost effectiveness of either this proposal or alternatives.” Continue …
NE Region Facing Decreased Power Demand
The idea of a future “energy cost crisis” brought on by a failure to build enough infrastructure to keep up with power demand is a scary prospect indeed. But new information – quietly released by grid operator ISO New England – paints a vastly different, more optimistic picture of our energy situation. Demand for energy from our power grid is not going up. It is going down. Continue …
Kinder Morgan critics say pipeline downsize proof pipe not needed at all
“Several opposition groups contend that Kinder Morgan’s just-announced downscale of its proposed Tennessee Gas Co. pipeline through upstate New York and central New England supports their view that the Northeast Energy Direct project is not needed to meet regional supply requirements.” Continue …
As Cold Sets In, the New England Winter Energy “Crisis” Fizzles
“We’re reaching the end of our first major cold snap here in New England, so let’s take stock of how New England’s electric system and market are faring. In short, we are doing much better than expected, to the great surprise of the many “experts” who have said we are in a “crisis.” Continue …
The six New England Governors did not request the NED pipeline
The six New England Governors, through NESCOE, have requested construction of new or expansion of existing pipelines to provide additional natural gas capacity. The increased capacity the states requested was 0.6Bcf/day. The originally proposed NED pipeline would transport nearly 4 times that amount or 2.2Bcf/day.