The real cost of pipeline obstruction to New York and New England is becoming ever more clear in natural gas spot prices as compared to the Midwest.
It gets more clear ever day; pipeline obstruction is imposing an extraordinarily heavy cost of the middle class residents of New York and New England. The crisis is coming, as I noted here the other day, but the pain is already here. One only needs to look at daily spot prices for natural gas during this cold January. Northeasterners are paying four and five times what they need to pay as a result of pipeline obstruction.
NGI Data puts out daily natural gas price information and graphs it by location. The graphs coming out with respect to New York and New England look like the world’s greatest roller-coaster or, perhaps more accurately, the landscape silhouette of some distant moon with rapidly raising mountain peaks. They provide a whole new definition of volatile.
Take, for example, these three average hub prices in the Northeast as of this morning:
Transco Zone 6 (New York): $19
Algonquin Citygate (New England): $14
Northeast Regional Average: $14
Now, compare these prices to Midwest gas prices, where it’s also cold:
Chicago Citygate: $3.50
Michigan Consolidated: $3.50
Midwest Regional Average: $3.50
Northeast gas prices are four and five times those in the equally cold Midwest. The difference is the pipeline infrastructure the Northeast lacks to get plentiful Marcellus and Utica Shale gas to Northeast markets that desperately need it. When demand is high and supply is constricted by pipeline obstruction, the result is inevitable. Natural gas and electric prices go up dramatically and utility costs have to eventually be reimbursed by ratepayers.
It’s a huge unnecessary tax being imposed on the middle class in the name of green political correctness and making wilderness playgrounds by a gentry class that never feels the pain. More than that, it’s a huge disincentive to economic development and job creation, creating a vicious cycle of decline with ever fewer people with ever less money to pay ever higher bills. Yet, natural gas achieves the biggest reductions in emissions with the greatest economic efficiency.
What’s the matter with New York and New England, anyway?