A proposed $5 billion natural gas pipeline for New England is needed only to meet peak winter demands on 30 to 40 days per year, according to pipeline critics quoted in a recent, in-depth article in the Hampshire Gazette. They say that the region is already served by underutilized facilities that could meet the demand “before ratepayers are forced to pay for a new pipeline that could, they argue, drive gas prices up rather than down.”
The Northeast Energy Direct project proposed by the Tennessee Gas Pipeline Co. would span 430 miles from natural gas wells in Pennsylvania to its terminus in Dracut, Mass.
“Studies pointing to the need for added natural-gas capacity refer to peak days of the winter heating system, when gas-burning electric generating plants have had to pay a premium for fuel because gas-heating customers are given priority use of at-capacity pipelines,” the article states.
“You only need the capacity 30 to 40 days a year, and you can satisfy those peaks with [liquefied natural gas],” Carol Churchill, a spokeswoman for GDF Suez North America, told the Gazette. The company owns the nation’s oldest LNG terminal in Everett, Mass., with two 180-foot-tall tanks that can hold 3.4 billion cubic feet of natural gas. “If you build a pipeline, you can import cheap gas into New England, but you’re doing so in a very expensive pipeline, in a pipeline that’s subsidized,” she said. “So there’s no incentive to size it correctly, there’s no incentive to hold down the gas. You’re bringing this cheap gas in on a very expensive pipeline, and you’re making consumers pay for it ... 365 days a year for 20 years whether they need it or not.”
Another underused resource regulators need to look at are the kind of LNG storage tanks Berkshire Gas built in Whately, Mass. in 1999, the article states. “Berkshire’s two 70,000-gallon tanks were specifically built for peaking—on a concrete pad with room for three more tanks to be added around 2003, 2011 and 2018.”
“Do we have to buy a big new car so [Berkshire Gas] can have a hubcap?” Deerfield Energy Resources Committee member David Keith asked the state Department of Public Utilities at its Greenfield hearing last month.
“The issue really is supply,” said Anthony Scargaggi, Vice President of GDF Suez North America. “There’s a confluence of things going on right now. You had this really cold winter two winters ago that nobody prepared for that caused substantial spikes in power prices that were real. Those currents caused a lot of uproar, caused a lot of players to come together in a way to benefit themselves, knowing that there’s a huge amount of natural gas that can be exported. You have the pipeline players who just make money because they put a pipeline in the ground. ... You put all that stuff together and you come up with a mind-set where, ‘If we can get somebody else to pay for this pipeline, we’re all OK.’ And we’ve got this consumer here who’s scared out of his wits, because he’s paid the most he’s ever paid in electric prices. The only one who’s bearing all the risk will be the consumer.”
To read the Hampshire Gazette article, click here.