National Grid Makes the Case for NESE, Again, with Emphasis

Tom Shepstone
Shepstone Management Company, Inc.


Yes, NESE is very much alive, and National Grid has assembled one heck of case for it with a new report that lays the groundwork for state approvals.

Last month, I noted that “If you NESE was dead and all we’d ever see is a corpse on the New Jersey shore, you were wrong. The project is very much alive and again in front of NJ-DEP.” Now, we learn it’s very alive in New York as well. National Grid, the New York metro area gas utility, is conducting virtual hearings, in fact, to generate public input that can be submitted to the state’s Public Service Commission. It has also produced a lengthy report documenting why the NESE pipeline project is undeniably necessary unless you’re a true denier of green giant proportions.

National Grid

Before getting into that report and the virtual hearings (two of which are yet to happen), let reflect a little further back to something I wrote back in November (“National Grid and Cuomo Settle Moratorium; Who Blinked?”) when everyone was saying Governor Corruptocrat had won his stare-down with National Grid:

According to Newsday, a politically correct news organ if there ever was one, Andrew Cuomo and National Grid have agreed to lift the Long Island moratorium on natural gas hookups. One unfamiliar with the Machiavellian ways of Governor Corruptocrat could be forgiven for wondering who blinked. Skilled New York political observers, though, will see through the whole thing. Indeed, the fact both Newsday and the ever green New York Times are crafting the story to make one wonder tells us exactly who won this one…

Take a close look at what Cuomo says and ask yourself if these bombastic statements aren’t another case of someone saying too much and being too determined to veil the facts and pretend he’s won. Does a real winner need to go to such lengths to proclaim it? No, the first rule of winning is to say nothing  and let the facts speak for themselves. Cuomo is doing the opposite. He’s the great deceiver and pretender. He was caught with his pants down and needed to end the moratorium more than the international firm National Grid needed this troublesome franchise.

Everything about the deal, in fact, is simply several coats of paint of various colors intended to mislead those willing to be deceived. Doubt me?

… [Cuomo says it’s] complicated and not easy, and we need to present other options but no one should think a pipeline is inevitable. That’s political speak for not having any real choice but to approve the pipeline and simply practicing to deceive those willing to believe Cuomo gives a damn about anything other than getting out of this mess while protecting his green credentials. The villains will be the heretofore subservient, but now suddenly and usefully “independent,” DEC and the hacks at the PSC who are doing what they’re told and wearing their scarlet letters.

I began to doubt myself after writing that when Williams withdrew their NESE application to the New York State DEC for water quality certification and went quiet. But, then, after a respectable three months went by, NESE remerged from the depths in New Jersey and now National Grid is making a big push again with virtual hearings on a comprehensive study that proves beyond a doubt NESE is desperately needed and soon, with a view toward submitting to a PSC still wearing that scarlet letter. I won’t say I told you so, but let me relate some of the facts National Grid has shared:

  • “Design Day” is a concept National grid says it uses to plan for peak demand conditions. It represents the level of gas delivery needed to serve all customers during an extreme cold weather event. In the Downstate NY region Design Day is defined as a 24-hour period that averages 0° Fahrenheit in Central Park. Approximately 85% of this Design Day capacity is used to heat homes and businesses—keeping people warm on the coldest of days.
  • Design Day demand increases averaged 2.4% annually. Demand growth has primarily been driven by conversions to gas heating and new construction. National Grid says it has taken several steps to supplement capacity in the short term. Even with improved energy efficiency and increased reliance on electric heating (Electrification), however, it projects Design Day demand to increase by a compounded annual growth rate of 0.8–1.1% over the next 15 years.
  • By 2035, National Grid projects a gap between Design Day demand and supply of approximately 265–415 MDth. [1,000 dekatherms (1 MDth/day) will supply 10 residential gas heating customers in the Downstate NY region for a year, which means it is talking a potential gas shortage equal to that required by 4,150 homeowners over a full year and much more, relatively speaking, at a given moment.]
  • With proper funding and support, the company anticipates Renewable Natural Gas (RNG), Hydrogen, and incremental Geothermal Heat Pump programs can cover 15–35 MDth of the Downstate NY gas supply gap. [For those of you who live in Mahattan and suppose energy comes from the thermostat, that still leaves roughly a 400 MDth gap.]
  • National Grid has identified 10 options for filling the gap. These include the following:
    > An Offshore LNG Deepwater Port that would cost up to $2.22 billion and address 100% of the need, but this option was tried before (Port Ambrose) and rejected by every pandering politician from Plandome to Patchogue.> A LNG Import Terminal of 400 MDth capacity that would cost up to $2.78 billion. Good luck with trying to put this project on the Island itself when no polticians would even tolerate it off-shore.> A Peak LNG Facility that would only meet 100 MDth of the need and cost $2.54 billion plus require a change or waiver of existing New York State law that limits land storage of natural gas. That’ll work for sure.> Two LNG Barges that would only provide 50 MDth capacity each and cost $2.42 Billion in total.

    > A Clove Lakes Transmission Loop Project that would eliminate a bottleneck at a cost of up to $2.63 billion and deliver but 70-100 MDth of additional capacity.

    > An Iroquois Enhancement by Compression (ExC) Project that would upgrade four compressor stations along the Iroquois route through wealthy communities at a cost of up to $2.22 billion for 125 MDth of capacity.

    > An Incremental Energy Efficiency program for weatherizing homes and produce 111–216 MDth/day, aggressively assuming 30% of customers engage in intensive weatherization by 2035.

    > A Demand Response program (which would mean letting National Grid controlling your thermostat and maybe turning your heat off. It would gain maybe 81–108 MDth/day. This assumes the percentage of customers using smart thermostats increases from 10% to 50% and all large customers currently using backup heating oil on the coldest days continue to do so. What a plan!

    > An Electrification program that largely amounts to shifting homeowners from natural gas to heat pumps, which might add 52–86 MDth/day. of capacity. Altogether, the last three options would cost up to $2.62 billion to achieve 244-419 MDth/day of capacity under highly questionable and, likely, unachievable assumptions. Indeed, the report says, with respect to the heat pumps, “Unless customer adoption reaches the necessary scale, however, there is risk of falling short of projected impact. Reliability could improve over time as programs mature” Well, that’s comforting.

The NESE pipeline project, by contrast, would contribute the full 400 MDth/day of added capacity at a cost of $1.83 billion, with minimal environmental impact from construction (see Environmental Impact Statement) as well as ongoing operations and 10–15% lower greenhouse as emissions than any of the LNG solutions. No other combination of options to get to 400 MDth/day of added capacity comes close in terms of overall lack of impact or economic efficiency.

It’s very interesting isn’t it? The NESE project truly makes the most sense and, if you agree, you should think about participating in the virtual hearings at 6 PM tonight, on Monday, Match 30th or Tuesday, March 31st. You can also submit a survey response or give your opinion directly to the state, all of which would be very helpful in bringing NESE all back to the surface! Do it now, in fact!

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