The global glut of natural gas still hasn’t reached New England, according to a recent article by Bloomberg News.
The heating fuel may surge to three times the current price in New England this winter, making it the highest priced natural gas in the world, as pipeline bottlenecks limit supplies during frigid weather. That is what traders including Consolidated Edison Inc.’s ConEdison Energy told Bloomberg.
“Competition for pipeline access into New England is poised to intensify as the power grid, already getting more than half of its supply from gas, becomes even more reliant on the fuel as coal-fired plants shut,” the article states. “Opposition from environmental and consumer groups threatens to delay and derail new lines, including a $3 billion Spectra Energy Corp. project.” At the same time, oil prices are plunging.
“New England remains pipeline constrained, so if bouts of very cold weather move in this winter, you could certainly see prices spike,” Alex Tertzakian, an analyst with Energy Aspects Ltd., told Bloomberg. “This would likely make New England briefly the world’s premium market.”
“Operating conditions on the six-state grid managed by ISO New England Inc. are already ‘precarious’ during winter periods and beyond 2019 ‘may become unsustainable’ in extreme cold conditions, Chief Executive Officer Gordon van Welie said in late September,” the article states. “The grid started a winter reliability program compensating generators for stockpiling fuel oil and LNG.”
New England will also need to keep importing liquefied natural gas this winter to meet demand, according to Bloomberg. “Boston Harbor is already seeing the most LNG tanker traffic in four years. Everett terminal has received 26 cargoes so far this year with 66 billion cubic feet of gas, Carol Churchill, a spokeswoman at the facility, said in an Oct. 25 e-mail.”
To read the Bloomberg article, click here.