New England Natural Gas and Pipeline Expansions – How Much Do We Need?

Ryan Pollin for Zondits, April 3, 2015

The Northeast Energy Direct pipeline project, otherwise known as the Kinder Morgan pipeline, is a natural gas capacity expansion project that aims to deliver more gas from the Marcellus shale fields to New England area power plants, devised by Texas oil and gas company Kinder Morgan. Former Massachusetts Governor Deval Patrick commissioned a study on how to meet the state’s electricity needs with less natural gas, and on the very last day of his term in office the Massachusetts Low Gas Demand Analysis Final Report was released to the public. The short answer is that the report predicts a shortfall of 600 to 900 million cubic feet of natural gas on the most energy-intense winter day of 2030. The longer answer is that it’s complicated, and there are a few weak points in the report that are worth exposing.

The Global Warming Solutions Act (2006) legally binds the state to reduce total emissions 25% by 2020 and 80% by 2050. The study assumes that Massachusetts will not comply with this regulation. Among clean energy professionals, and perhaps behind closed and locked doors in the Massachusetts Department of Energy Resources (DOER), it is understood that it is not possible to meet those standards if any new fossil fuel infrastructure is put in place. The graph below shows a few potential emissions scenarios and statewide targets for Massachusetts.

Figure ES-3. Massachusetts GWSA compliance in heating gas and electric sector for selected scenarios.

Figure ES-3. Massachusetts GWSA compliance in heating gas and electric sector for selected scenarios.

One problem I see with the report is that it assumes that assumes that efficiency efforts will remain at 2.6% of retail sales volumes in Massachusetts (the current rate), and that other states’ efficiency efforts will not increase. It is an unfair declaration of a “status quo” usage to say that efficiency efforts will not increase in volume. The real “status quo” is that we will do as much efficiency as is cost-effective, and over the recent decade we’ve seen that to mean steady increases in efficiency commitments. Additionally, the study rejects any potential for increased energy efficiency in Maine, New Hampshire, Vermont, Rhode Island, or Connecticut from all scenarios. How can we get an accurate picture of the baseline scenario, let alone a low-demand scenario, if we only consider potential from one of the six New England states’ potential (even if it represents about 43% of New England’s total electricity use)?

Rich Cowan, co-founder of the Dracut Pipeline Awareness Group, points out that the energy demand profile developed in the study is inaccurate and doesn’t come close to our actual usage thus far. The total demand projected for each year comes from 2013 usage data from ISO New England (ISO-NE), the independent system operator, and is uniformly increased by 0.5% per year, the current growth rate according to the DOER. Cowan points out that for the 2014 year, the projection was overestimated by 9.7%. In 2015, the report was off by more than 2 gigawatts, which Cowan estimates lines up to about 500 million cubic feet of pipeline capacity. For a 15-year projection to be off by nearly 10% in its first year cannot possibly give realistic estimates of our demand needs in 2030. Applying a growth rate to such an overstated initial capacity rigs the scales for high demand for the whole period.

One final thought: The pipeline project is marketed as a project to protect New England’s energy capacity when natural gas is used for heating fuel and electricity generation. For that service, the proposal from Kinder Morgan expects that the pipeline be funded by ratepayer surcharges from the citizens of Massachusetts and the other states through which the pipeline carves. The consequences of short-falling on gas supply is that ISO-NE needs to schedule oil-fired plants for those few hours on those few days in January, and that risk incurs marginal cost increases to the energy rates at those hours, plus marginally increased carbon emissions at those hours. But who benefits from their shiny new pipeline during the other 8,750-odd hours when it isn’t needed to serve New Englanders? No doubt, the gas will be flowing at increased rates year-round, and I would suspect that existing LPG export terminals will be getting a lot busier. So, then, who benefits from cheaper fuel during those few peak-demand hours, and who makes money all year long? What happens to greenhouse gas emissions during those few peak-demand hours, and what happens to greenhouse gas emissions all year long?