Shepstone Management Company, Inc.
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.
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:
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.
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.