Has Anyone Noticed New England's Escalating Energy Crisis?

Forbes ^ | 12/05/2013 | William Pentland

[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.

[Bubba_Leroy]

Let them build wind farms.

[jsanders2001]

Power / Utility companies like to create “crises”. It pays well.

[saganite]

That’s OK. They have plenty of wind and solar power to fall back on.

[saganite]

Or maybe the utilities need govt approval to build the pipelines and it hasn’t been forthcoming?

[thackney]

December natural gas prices spike in Boston
http://www.eia.gov/todayinenergy/detail.cfm?id=14071
DECEMBER 6, 2013

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 demand—mostly 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.

[Renegade]

Call Joe Kennedy. He and Chavez’s ghost will solve the problem.

[tomkat]

             

[who knows what evil?]

Red England? Let them freeze to death in the dark.

[thackney]

click to enlarge

[chimera]

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 “Green Mountains” 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.

[taildragger]

Ya... How is turning off that coal fired 1500 MW unit near the Cape gonna work out for you New-England?

[digger48]

Let them build wind farms.

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

[thackney]

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.

http://www.eia.gov/state/analysis.cfm?sid=VT

[texas booster]

Does Boston area have any facilities to offload LNG?

Maybe its time to bring up an LNG tanker from Corpus/Sabine Pass etc.

[taildragger]

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

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....

[taildragger]

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....

[daniel1212]

Thanks. cost $110 last month for heat. Good thing global warming is on the way !

- http://www2.whdh.com/weather

[glorgau]

I was kind of shocked by my electricity bill last month - couple hundred bucks more than expected. for a 2 bdrm apartment!

[newnhdad]

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.