Skip to comments.Has Anyone Noticed New England's Escalating Energy Crisis?
Posted on 12/06/2013 5:16:12 AM PST by thackney
Alexis Madrigal, a blogger for The Atlantic, asked yesterday if anyone had noticed the massive energy transformation that took place in New York City about a month ago?
The transformation that Madrigal is alluding to is a clutch of natural gas pipeline expansion projects that came online in and around New York City in early November.
These projects and several more like them in the previous three years have expanded the total deliverability of natural gas into New York by about one third.
The cumulative impact is that natural gas future prices for January and February of 2014 are lower in New York City than Louisiana.
I repeat: the natural gas futures price is lower in New -York City than Louisiana. The same cannot be said for New England.
While the national news media may have missed this story, it has also missed a related and arguably more important story about the lack of similar pipeline expansions in New England.
Natural gas flows into New England from the south via the Tennessee Gas Pipeline and the Algonquin Gas Transmission. Last winter, these pipelines were operating at near or full capacity nearly every day. Unlike New York and New Jersey, the pipelines transporting gas into New England have not expanded in years and are not scheduled to expand until 2016 at the earliest.
The result is an escalating energy crisis in New England.
(Excerpt) Read more at forbes.com ...
Let them build wind farms.
Power / Utility companies like to create “crises”. It pays well.
That’s OK. They have plenty of wind and solar power to fall back on.
Or maybe the utilities need govt approval to build the pipelines and it hasn’t been forthcoming?
The average bidweek price of natural gas in New England for December settled at $14.52 per million British thermal units (MMBtu), well above prices in other U.S. regions, according to the IntercontinentalExchange monthly index. The bidweek price, shown in the chart above, sets in a price for natural gas over the entire month at agreed upon volumes. In the past 20 years, natural gas prices in the Northeast have only reached this level on two occasions. In 2005, hurricanes Katrina and Rita led to extremely high prices at the benchmark Henry Hub in Louisiana, and the financial crisis in 2008 led to high natural gas prices throughout the United States. This December is the first time that the bidweek price at the Algonquin hub, which serves Boston, has reached this level.
Although growth in domestic natural gas production has driven down natural gas prices throughout most of the United States in recent years, constraints on the Algonquin Gas Transmission pipeline system heading into New England have contributed to short-term spikes in spot prices for natural gas in Boston during winter months. These recent trends, in turn, have been reflected in prices for the December 2013 Algonquin Citygate futures contract.
Several events that occurred in late November, as December bidweek trading was closing, contributed to the high average price, including:
-cold weather during the end of November which increased demand for natural gas for space heating and highlighted the constraints on the pipeline network;
-forecasts for below-normal temperatures in early December and;
-the announcement, on November 14, of scheduled maintenance at Canada's Deep Panuke offshore unit, a source of supply to meet New England's peak gas demand.
Flows into the northeastern United States fell below year-ago levels on the Maritimes and Northeast Pipeline (M&N), which transports Canadian production from Deep Panuke and Sable Island offshore production fields to Canada and the United States. M&N also transports regasified LNG cargos offloaded from the Canaport terminal in St. John, New Brunswick in Canada to the United States. Meanwhile, flows increased on the Iroquois Pipeline and the Portland Natural Gas Transmission System (PNGTS) pipeline, both of which interconnect with pipelines owned by TransCanada that also serve consumers in Ontario and Quebec, where demand increased significantly at the same time that Deep Panuke went offline.
New England pipeline constraints limit the delivery of more natural gas to consumers in the market, making natural gas and power prices more volatile during periods of high demandmostly in the winter. Bidweek natural gas transactions let buyers and sellers lock in prices for each day in the prompt-month, rather than purchasing daily prices in the physical spot market. For example, last December the average bidweek price for natural gas in Boston was a little over $10/MMBtu, while the average spot price during the month was about $5.80/MMBtu for all trading days, with prices at times going over $10/MMBtu. However, while the spot price in any region changes (often drastically) from one day to the next, bidweek trading provides price certainty for natural gas delivered throughout an upcoming month.
For many years, the price of natural gas has had a strong influence on the price of electric power in New England. Moreover, natural gas now accounts for more than half of the generation in New England, straining natural gas deliverability into the region, which can cause increases in natural gas prices.
Last winter, the spot price for natural gas at Algonquin Citygate peaked at $34/MMBtu, contributing to on-peak power prices that spiked to over $260 per megawatthour (MWh). Typically, spot prices for wholesale, on-peak power range between $30 and $40/MWh in New England. Near-record natural gas prices at the Algonquin trading point established during the December 2013 bidweek contributed to forward, wholesale power prices at the Massachusetts Hub for December 2013 of more than $100/MWh.
Call Joe Kennedy. He and Chavez’s ghost will solve the problem.
Red England? Let them freeze to death in the dark.
Vermont just ran their last nuclear plant (Vermont Yankee) out of town on a rail and now they are utterly dependent on two things: importing energy from Canada and New Hampshire, and tearing down ridge lines to put in unreliable and intermittent, industrial-size windmills that have maybe a 25-30% capacity factor at best. No more âGreen Mountainsâ for the Boys to hang out in. They are cutting their own throats in terms of energy supply and a stable economy with high paying, highly skilled jobs. Let them freeze in the dark, the stupid dopes.
Ya... How is turning off that coal fired 1500 MW unit near the Cape gonna work out for you New-England?
Oh, but they already are. They are building them all over Ohio and Indiana to sell the power to the Northeast.
We have to look at them and suffer all of the problems with health and property value, so NE'erners can can smugly pretend nuclear power is too dangerous
You need to include fuel oil imported in from other locations.
Nearly three-fifths of Vermont households use fuel oil as their primary energy source for home heating.
Maybe its time to bring up an LNG tanker from Corpus/Sabine Pass etc.
Oh it is worse. Connecticut used to be the home of Combustion Engineering and their Nuclear Power Division and CT has the Millstone Plants. That division was sold along with that company being sold to others a bazillion times so much so I don't know who owns it now. One Millstone is closed, the other 2 are still up and running, but what are the chances of an American designed and built plant gets built in CT again? Zero Zip Nada....
They have one, wanted another and the watermelons nixed it with safety fears, that were impossible yet believable by the low info voters in MA and this is from a friend who had a gnome on the proposal....
I was kind of shocked by my electricity bill last month - couple hundred bucks more than expected. for a 2 bdrm apartment!
Not to worry, Joe Kennedy will ride on a communist tanker filled with “free” oil from the people that can’t figure out how to work the wells and how to make toilet paper.
Yep, in Everett on the Mystic River right across from Charlestown. It's not very active though...
not in the kennedy’s back yard ... too unsightly, ya know
This was the plan:
Please keep in mind that New England is not that much different in regards to red/blue than any other state in the country. The difference is there are more densely populated cities than the Midwest/south/west. For example, I recall driving through Mass when the Senate race was going on. All the people in the rural area of central Mass had Scott Brown signs in their yard. As soon as we got into Worchester the signs for Liawatha dominated the landscape. The rural areas are outvoted by the cities. This is the same in VT, NH, ME and especially NY. I grew up in a suburb of Buffalo. Everyone in NY wanted all of NYC and Long Island to be a separate state.
As far as power goes. Public Service of New Hampshire has been trying to get the right of way secured for two years to bring hydro electric power from Quebec St. Lawrence River down through NH to Mass and CT. They call it the Northern Pass. It has been very controversial here in NH because WE do not need the power. Mass & CT do. They will use existing right of ways in most of the state , but there is about 45 miles in the northern tip of NH that they are trying to get right of way. The people up north do not want it because of the “not in my back yard” and “ it will ruin my view”, etc. It is going to cost about $1 Billion to build. However, the utility will make 10X that over the next 20 years selling the power down south. Quebec Hydro has more power than they know what to do with. There is no shortage of water coming out of Great Lakes. They flow 24/7 and keep turning those turbines while we sleep for about $.0001/KW.
They are regulated utilities and don't make any higher percentage of profit, crisis or not. Their profit percentage on sales is limited by law and the state PUCs set prices, not the utilities. All things considered, the gas utilities in New England would rather sell more gas than less.
They also have 'universal service mandates' imposed on them. If they screw up and don't provide service, they can be fined heavily.
Also understand that the utilities only distribute the gas locally. They buy the gas from transmission companies, and the transmission companies have not been able to expand their long distance pipelines in New England. No one wants a new pipeline in their neighborhood. Hence, demand and total available supply are becoming dangerously close. One or two breakdowns could cut off supply for millions.
It is a fundamental infrastructure problem that needs to be addressed.
They already have! All liberals need to spend a couple of years without electricity and water...Just so they can have solidarity with “the poor” they all claim to care about!
ROTFLMAO!!! I'm sure Sodom and Gomorrah had their defenders back in the day.
'The Horrible Lack Of Planning That Could Force New England Into A Serious Energy Crisis This Winter'.
OK, so in what ever state you live in all the people that live in the inner city of your state are conservative voters? BULLCR%P
For example, are you telling me that the African Americans and Hispanics in Memphis did not primarily vote for Obama in both of the last two elections? How about Austin, Atlanta, Birmingham, Little Rock, Columbia, Dallas, New Orleans, etc. All of these states went for the Republican but their cities predominately vote Democrat. What I am stating is the New England rural areas are not that much different that the rural areas in the rest of the country.
The difference is the urban populations OUTVOTE the country people.
When I lived in New England, the locals 1. would not allow gas pipelines to be built(NIMBY) 2. shut down the best electrical producer in the region (nuclear plant outside Boston) 3. would never even consider allowing a coal-fired plant to be built.
What they did was leave themselves hostage to burning fuel oil to heat their homes.
A really stupid was to go as oil has much more value as a transportation fuel or making lubricants instead of burning at the boiler tip.
Congress, as is customary, always ensured the libs were taken care of by passing fuel oil credits to reduce the impact of high costs.
I say let ‘em freeze if they do not wish to do what the rest of America does.
FYI, this is why almost everyone in NE outside the cities has either a wood stove or a pellet stove to supplement their winter heat. There are only four people out 50 here in my office in NH that have natural gas at their homes. All the rest of us heat with heating oil or propane. Electricity is too expensive even though it was deregulated here two years ago. That brought the price down about 15-20% for those of us that switched electric suppliers.
They are turning that plant off because of a fedgov mandate. This is something most electric consumers are missing.
Here’s how it works, I’m from ND so I will use Theodore Roosevelt National Park as an example.
- Here’s what you find on the taxpayer funded web National park service site for air quality in the Theodore Roosevelt National Park;
Note that the “haze” in the pictures (something we normally call fog here in ND) is assumed to be caused by air pollution, specifically NOx. Also note that the power plants in ND are downwind of the Theodore Roosevelt National Park
- Groups like Wild Earth Guardians use the EPA to clean up the air in notional parks, in this case, Theodore Roosevelt National Park;
- The EPA responds with threats to take over environmental regulation in ND with mandates for ND power plants to clean up NOx. NOx is supposed to be the cause of the “regional haze” (fog) in the Theodore Roosevelt National Park.
- The power plant I work at spends 450 million to upgrade its SO2 scrubbers and install a NOx reduction systems. The NOx reduction is accomplished by spraying urea into the boiler at a cost of 200-800 dollars per hour depending on the coal. (These are the costs that are shutting down coal plants in New England and across the nation.)
- The Coop I work for has to raise rates by 30% to cover the cost of meeting the government mandates. (Our rates have doubled in the last ten years mainly to meet government mandates.)
- EPA reimburses the legal costs Wild Earth Guardians incurred suing EPA.
Recap, the costs to the taxpayer/consumer;
- pay for a government web site claiming regional haze is caused by power plant pollution
- the legal costs entities like Wild Earth Guardians incur suing the fedgov.
- the costs to upgrade power plants to meet new pollution control mandates
- the ongoing new and increased costs of lime and urea for SO2 and NOx control.
Consumers/taxpayers really need to learn to drill down to the true root causes and take it up with the people they elected to serve them. There is no better way to kill an economy than to artificially raise the cost of its lifeblood - energy.
Oh, please...in RURAL counties like Coos, Grafton, Cheshire, and Sullivan; Obama slaughtered Romney. Hillsborough, which is more urban/suburban, went to Romney (albeit by a whisker). You're right that in MOST situations, urban outvotes rural. Red Hampshire rural areas vote Democrat; by a WIDE margin. RH = blue state.
You are right about NH. I think Keene State, UNH and Dartmouth dominate those sections of the state. What has happened to the old time Yankee conservatives that were here in NH. I guess we are getting outvoted by the retirees from the liberal states to south and west.
“Power / Utility companies like to create crises. It pays well.”
Crisis doesn't pay as well or as steady as simply selling more energy.
It's government that likes the crisis, utility companies like the steady. Politicians need to get re-elected, and promising to solve the current crisis (that they caused) is a good campaign issue.
Thanks for the detailed response, will contact offline....
Well, since the Northeast is overrun by liberals, it looks like they will find out the real cost of robbing Peter to pay Paul. Both Peter and Paul get screwed when the money runs out (or the coal and oil and there’s no natural gas to replace it). Karma sucks, y’all.
I believe that many have either died off or moved away...my wife was born here, and she doesn't even recognize the town she was born in...mostly people from 'away'; predominantly New Yorkers from suburban NYC. Dartmouth area (Grafton County) is flaming liberal, as is Keene for the reasons you state. Keep in mind (make sure you're sitting down) that VERMONT used to be a conservative state. The liberals from the states to the south and west (along with 'deadheads') overran the place. You're also right about New York...people upstate want NOTHING to do with the city...especially the tax burden. So many people have moved away from New York and Massachusetts that they have lost Congressmen...
Peter ran out of wealth a while ago. They now rob Paul and Paul's children to pay Paul.
I can recall a bumper sticker from 30 years ago.
DRIVE FAST - FREEZE A YANKEE IN THE DARK !
Sounds like the NIMBY attitude is coming home to roost with a vengeance.
These NE liberals are so dumb they still believe in Global Warming. The New England states have their own cap and trade, carbon-fighting program:
They must be so proud!
Their liberal votes helped give us all the tyrannical government we have now. Do I care if they are forced to choose between heating their homes and buying food? Let me think about that one for a while
The state that gave us homosexual marriage. I basically only recommend one move here if they are a missionary. Or will be. The Frozen Chosen!
“You can’t fix stupid.” — Ron White
Is the EPA correct?
“Is the EPA correct?”
How can powerplants downwind of Theodore Roosevelt National Park contribute to regional haze caused by NOx? EPA and Wildearth Guardians wrong.
We have been having regional haze before the oil patch activity and powerplants, like I said it something we call fog - moisture in the air. It’s got nothing to do with pollution. EPA and the National Park Service is wrong on that.
EPA reimburses Wildearth Guardians for its legal costs - do you as a taxpayer feel that is right?
All the expense to meet new NOx emissions will not decrease visible haze in the Theodore Roosevelt National Park. I was at the EPA regional Haze hearing in Bismarck and the ND state scientists and engineers proved that point decisively. EPA and Wildearth Guardians wrong on that too.