Little need for new gas pipelines

A year ago, companies based in the Southwest were planning about 3.0 billion cubic feet per day (Bcf/d) in new natural gas pipeline capacity entering New England, nearly doubling current capacity of about 3.6 BCf/d. Why would that happen? New England is at most a slowly growing energy market. Since the region was already well advanced in switching from coal-fired and oil-fired to gas-fired electricity generation, there were no huge, likely new customers. It was clear that pipeline companies had other motives.

Although pipeline companies would not admit it, most industry observers read those motives as sending U.S. natural gas into international markets through Canada. For such purposes, New England is not a market but a transportation route. The region does not need to accept environmental hazards in order to boost pipeline company profits milked from the region by using it as a pathway to foreign trade.

Gas giant collapses: Since then, new information appeared, and pipeline momentum stalled. Last November, Maura Healey, the state’s attorney general, released a report prepared by Analysis Group of Boston (AGB), examining needs for new gas pipeline capacity to provide reliable electricity. In its 70-page report, AGB showed that adaptation of the current electricity network can meet needs for at least the next fifteen years, without new gas pipelines.

New England was not well outfitted for cold winters of 2013 and 2014, when natural gas supplies were stressed, causing spikes in electricity prices. Advance preparation–stockpiling fuels and equipping plants to burn either gas or oil–began to help the next year. In the winter of 2016, milder weather and better preparation led to no electricity price spike.

Monthly electricity prices, Jan. 2010 thru June 2016

IsoNeMonthlyHubDayAhead2010to2016
Source: ISO New England data, July, 2016

The region’s average wholesale electricity price for the utility year ended March 31 was 2.8 cents per kWh. Wholesale electricity prices this year stand comparable to other regions that organize competitive generation markets. Retail prices remain higher in New England than in most of the U.S., but that is mainly because of aging distribution networks, incurring high maintenance costs. Despite claims from pipeline promoters, given good management of current gas supplies, New England has little to gain and much to lose from new pipelines.

This spring, the proposed Northeast Direct pipeline was cancelled by financial parent Kinder Morgan of Houston, TX. It was the largest and most disruptive of the New England projects, threatening undisturbed lands and state forests across northwestern Massachusetts and southern New Hampshire. Although Kinder Morgan cited “market” factors, it no could longer depend on political pressures stimulated by electricity price spikes.

Next largest projects: Access Northeast, sponsored by Spectra Energy of Houston, is the next largest project. Unlike Kinder Morgan’s proposed line, most of Spectra’s proposal was sited along rights of way for the Algonquin pipeline, opened in 1953, which Spectra now operates. However, Access Northeast also includes large branches that would plow through new territories.

Spectra Access Northeast, eastern Connecticut through Massachusetts

SpectraAccessNortheastCTRIMA2016
Source: U.S. Federal Energy Regulatory Commission, July, 2016

The largest new branches are proposed in central and eastern Massachusetts, running from the Algonquin main line in Medway to West Boylston, just north of Worcester, and from Medway to Canton, where that new branch is to rejoin and reinforce the southern part of the main line, heading toward Weymouth. The branches through new territories, about 50 miles in all, are generating much more opposition than the rest of the project, about 75 miles that are nearly all sited on current Algonquin rights of way.

Opponents of Spectra have more complex targets than opponents of Kinder Morgan. There are now three Spectra projects in New England. Algonquin Incremental Market has been in construction since 2015, aimed at increasing capacity along the Algonquin main line between southern New York and eastern Massachusetts. Its most controversial feature has been a high pressure, 3-1/2 ft diameter pipe under the Hudson River, passing a few hundred feet from the Indian Point nuclear power plant in Buchanan, NY.

International exports: Atlantic Bridge is the most revealing and speculative Spectra project. It would increase compressor power all along the Algonquin line and add a new compressor in Weymouth. That one would be used to reverse gas flow on the HubLine, opened in 2003 across Massachusetts Bay between Weymouth and Beverly Harbors. There are no proven markets in New England to be served. Instead, like the recently cancelled Kinder Morgan project, Atlantic Bridge would aid international export of U.S. natural gas through Canada.

So far, Spectra has shuffled along plans for its three large, mutually reinforcing projects in defiance of law. The combined new capacity from the three large Spectra projects is more than the capacity that was planned from the cancelled Kinder Morgan project. A 1976 Supreme Court opinion held that “when several proposals…that will have cumulative or synergistic environmental impact upon a region are pending concurrently before an agency, their environmental consequences must be considered together.”

Ms. Healey, the attorney general, is currently defending the state against a pipeline company lawsuit for a small project, extending a branch line into northwestern Connecticut across a state forest. So far, however, while she raised the issue of concurrent projects in comments sent to the U.S. Federal Energy Regulatory Commission, she has not launched a court challenge against the Spectra projects–all seeking separate reviews instead of joint review as elements of a single, larger project.

– Craig Bolon, Brookline, MA, July 20, 2016


Jon Chesto, Kinder Morgan shelves $3 billion pipeline project, Boston Globe, April 20, 2016

Mild weather, ample natural gas supply curb Northeast winter power and natural gas prices, U.S. Energy Information Administration, April 5, 2016

Sam Thielman, Planned gas pipeline alongside Indian Point nuclear plant stirs meltdown fears, Manchester Guardian (UK), April 4, 2016

Clarence Fanto, Massachusetts attorney general picks up fight against natural gas pipeline that would serve Connecticut, New Haven (CT) Register, March 21, 2016

Wholesale power prices decrease across the country in 2015, U.S. Energy Information Administration, January 11, 2016

Paul J. Hibbard and Craig P. Aubuchon, Power system reliability in New England, Analysis Group (Boston, MA), November 18, 2015 (1 MB)

Paul L. Joskow, Natural gas: from shortages to abundance in the U.S., American Economic Review, 103(3):338-343, 2013

Bruce Estrella, HubLine impact assessment, mitigation and restoration, Massachusetts Office of Energy and Environmental Affairs, 2009

Craig Bolon, New England gas pipelines: attorney general weighs in, Brookline Beacon, November 1, 2015

Craig Bolon, New England gas pipelines: need versus greed, Brookline Beacon, August 29, 2015

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>