Why Marcellus Shale Gas Doesn't Get to New England, Impasse Over Expanding Gas Pipelines

Wall Street Journal ^ | April 27, 2014 | ALISON SIDER

[thackney]

Nearly 15 million people in New England live within driving distance of America's biggest natural-gas field, yet heating and electricity prices reached a record for the region this winter.

As states stretching from Massachusetts to Maine thaw out from bitter cold, questions linger about why New England hasn't benefited from the energy boom in the nearby Marcellus Shale.

The short answer is not enough pipelines. And the reason is an impasse between pipeline operators and power plants over how to pay for new capacity.

The problem is that pipeline operators want long-term contracts in place before they spend the hundreds of millions of dollars necessary to build a new pipeline or expand an existing one.

But power companies, which buy gas to fuel generators on a need-to-have-it basis, work on a different timetable. Independent power-plant operators must supply electricity to utilities at the lowest cost possible, and utilities are restricted in the extent to which they can pass on costs to customers.

The result is that the power industry long has been wary of getting locked in to long-term contracts with higher prices than necessary. Regulators are proposing a tax to bridge the gap.

"Pipelines don't get built on speculation," said Don Santa, president of the Interstate Natural Gas Alliance of America, which represents pipeline companies.

Power plants typically buy gas that remains once heating customers' needs are met. That usually is a workable strategy but not when the mercury plummets and gas demand soars. At one point in January, New England couldn't get the natural gas for electricity that it needed or couldn't get it at the right price. Nearly 75% of the region's gas-burning power plants sat idle. Plants that burn oil or expensive jet fuel were used to keep the lights on.

[thackney]

To view full story, try the first link at the top of the search:
https://www.google.com/search?q=Why+Marcellus+Shale+Gas+Doesn%27t+Get+to+New+England&oq=Why+Marcellus+Shale+Gas+Doesn%27t+Get+to+New+England&aqs=chrome..69i57.847j0j1&sourceid=chrome&es_sm=93&ie=UTF-8

[meatloaf]

I wonder how many coal fired power plants will be shout down by the EPA in New England. Elsewhere, utilities are planning to replace the shuttered coal plants with new NG fueled plants. Doesn’t appear to be a viable strategy in New England.

[gr8eman]

The short answer is not enough pipelines

Oh...I thought the short answer was "liberals"!

[thackney]

Natural Gas Pipelines in the Northeast Region

Twenty interstate natural gas pipeline systems operate within the Northeast Region (Connecticut, Delaware, Massachusetts, Maine, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Virginia, and West Virginia). These interstate pipelines deliver natural gas to several intrastate natural gas pipelines and at least 50 local distribution companies in the region. In addition, they also serve large industrial concerns and, increasingly, natural gas fired electric power generation facilities.

The natural gas pipeline and local distribution companies serving the Northeast have access to supplies from several major domestic natural gas producing areas and from Canada. Domestic natural gas flows into the region from the Southeast into Virginia and West Virginia, and from the Midwest into West Virginia and Pennsylvania. Canadian imports come into the region principally through New York, Maine, and New Hampshire.

Liquefied natural gas (LNG) supplies also enter the region through import terminals located in Massachusetts, Maryland, and New Brunswick, Canada.

More at:
http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/northeast.html

[Steely Tom]

Eastern Mass has plenty of natural gas. I have seen, with my own eyes, a restaurant with an outdoor gas fireplace, in operation, in winter.

The reason (I suspect) might have something to do with the gigantic LNG tanks located in South Boston.

Boston is the site of one of the oldest LNG terminals in the United States. It was built in the mid-70s.

[thackney]

They are looking for more gas than just enough for an outdoor fireplace, I suspect.

The MA terminal is actually in Everett, just north of Boston.

U.S. Natural Gas Imports by Point of Entry
http://www.eia.gov/dnav/ng/ng_move_poe1_a_EPG0_IML_Mmcf_m.htm

https://maps.google.com/maps?q=lng&hl=en&ll=42.401721,-71.060686&spn=0.033148,0.061455&sll=42.399376,-71.060686&sspn=0.033149,0.061455&t=h&hq=lng&z=14&iwloc=A

[lgjhn23]

Let em freeze.
They don’t deserve oil/gas/electricity...let em live in the stone age.

[samtheman]

The problem is caused by regulation and the proposed solution involves a tax. Sounds like liberals to me.

[Malsua]

The Tennessee Gas pipeline just added a 2nd larger pipe to an existing pipe that ran right through my town in Northern NJ. I just wish they would have put a distribution station in my town so I could get some...but no, off to Westchester it goes.

[txrefugee]

As in the former Soviet countries, the peasants will have to learn how to bleed those gas lines heading to the tony estates where the People Who Count live.

[Wuli]

we can help the pipeline-distribution industries by opening up the public right-of-way alongside and under the shoulders of our public highways; if we did this along the Interstate highways then natural gas as an alternative fuel would get a big boost and just when the long-haul truck industry is advancing engines designed for natural gas

[JimRed]

The problem is that pipeline operators want long-term contracts in place before they spend the hundreds of millions of dollars necessary to build a new pipeline or expand an existing one.

IOW, they have good business sense.