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It’s About Your Energy Costs, Bay Staters

peer reviewed health - Tom Shepstone ReportsTom Shepstone
Shepstone Management Company, Inc.

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It’s hard to imagine why Bay Staters are opposed to so many pipeline projects; they’re absolutely essential to reducing their energy costs.

Today in Energy, the Energy Information Administration blog, is full of fascinating information and yesterday’s post was a great example. Bay Staters ought to check it out because it deals directly with their energy costs. They’re directly increasing those energy costs by their opposition to important pipeline infrastructure that’s necessary to meet their growing energy needs.

energy costs 2015-salemlateral-hdd19

Salem Lateral Project – Beverly Harbor, MA

The title of the Today in Energy post is “New England natural gas pipeline capacity increases for the first time since 2010.” It’s a bit misleading, though, because the real message is that natural gas pipeline capacity needs to be grown by a lot, not a little. Two charts from the story provide the basics. The first is a revealing look at how capacity natural gas pipeline capacity expansions have dwindled to nothing until recently:

energy costs

The article then goes on to explain what this has meant for Massachusetts energy costs (emphasis added):

The increase in pipeline capacity is expected to continue offsetting decreasing natural gas imports into New England. Liquefied natural gas (LNG) imports into New England have typically met a significant portion of natural gas demand, but they have declined because of a variety of market conditions, including demand for LNG from other markets, and the expiration of previous long-term LNG contracts. LNG shipments to the Algonquin Northeast Gateway Lateral project (built in 2007 to deliver regasified LNG into the metropolitan Boston and New England market) and shipments to the LNG terminal in Everett, Massachusetts (built in 1971) have decreased over the past several years.

For many years, some points along the natural gas pipelines in New England have reached full capacity utilization rates during the winter months. The Algonquin Gas Transmission pipeline is the major pipeline delivering Appalachian gas into New England. Even as capacity has remained relatively flat, deliveries have been growing since 2010 because the pipeline has been operating at capacity for a longer portion of the winter season and higher levels of summer use. Over the past several years, natural gas flows through the Stony Point compressor station—a key entry point for natural gas destined for New England—have reached their operating capacity throughout the year, even in non-winter months.

New England natural gas pipeline constraints have contributed to relatively volatile natural gas spot prices. Average monthly natural gas prices at the Algonquin Citygate, a trading hub indicative of Boston wholesale natural gas prices, reached $15 per million British thermal units (MMBtu) during the winters of 2013 and 2015 and $25/MMBtu during the winter of 2014.

graph of natural gas prices at Henry Hub and Algonquin Citygate, as explained in the article text

For the nation as a whole, 10 U.S. natural gas pipeline projects have been completed or are expected to be completed before the end of 2016. In all, nearly 5.9 Bcf/d of additional pipeline capacity will be placed in service throughout 2016.

Take a close look at the second chart. It illustrates the pinch facing the Bay State whenever winter temperatures drop and more gas is needed. Costs increase dramatically for not only natural gas users, but also electricity generators who then must pass the higher energy costs along to users. This is the price Bay Staters are paying for Massachusetts intransigence and political correctness on pipelines.
Meanwhile, as one of our readers notes, some Bay State politicos have made special effort necessary to kill off other electricity generation options such as the Pilgrim nuclear facility. “Massachusetts efforts that kill electricity sources are always without replacement as if magic really does work,” he says.
Magic, of course, is only an illusion and sooner or later Massachusetts will have to face the fact that what can’t go on forever won’t. Will it be this winter? If not, then it will be next winter or the one after that. Here’s hoping one such winter season will lead Bay Staters to drop the political correctness and start welcoming pipelines and other energy projects that are the key to stabilizing their gas and electricity prices. After all, Bay Staters, it’s all about your energy costs.
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2 thoughts on “It’s About Your Energy Costs, Bay Staters

  1. Meanwhile, as one of our readers notes, some Bay State politicos have made special effort necessary to kill off other electricity generation options such as the Pilgrim nuclear facility. “Massachusetts efforts that kill electricity sources are always without replacement as if magic really does work,” he says. Agree

    Killing Pilgrim GREEN NO EMISSION NUCLEAR power plant (NRC-Lic EXP=2032), in 2017, will raise ISO NE EMISSIONS another 5% ++ 2000000 TONS of new emissions – 680 MW. ADDED to VT Yankee Closure 2014-of equal result, will VIOLATE the Regional Greenhouse Gas Initiative, Inc. (RGGI, Inc.) Laws our politically correct, NO-NUKE, Politicians enacted. Bottom line == 10% +++ 4000000 tons /yr Emissions for 2018, since 2014 VT yankee Closure. NEW Burrillville RI And Salem MA, will make 2000 MW + WILD Salmon River Killing, NOT GREEN, Quebec-Hydro 1000 MW ought to offset the LOST NUKES ==1360 MW. BUT with MORE EMISSIONS! LNG $$750000000 terminal of Salem MA will supply expensive NG to NE when needed. $$$3800000000 of proposed pipelines will help NE to stay NO NUKE. CO2 is accelerating as a % of atmosphere @ 406 ppm 2016. How that effects earth is up for debate.

  2. For folks interested in tracking, in real time, the amount, cost, and fuel derived percentages of the New England, electricity situation, the ISOExpress website – under real time maps and charts section – displays a wealth of info.
    Currently, coal is producing 9% of the total juice, up from zero a few weeks back.
    The cheapest spot price for wholesale electric is fluctuating between $60 and $100 per Mwh with a spike way above $200 the other day.. Average is $30.
    The end of next week, with bitter cold predicted, will spur both high heat and electric consumption.

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