Winter Is Coming: New England’s Longtime Natural Gas Supply Issues Could Be Even Worse This Year
Energy In Depth has written about the natural gas supply constraints New England faces ad nauseum over the last decade – from the policies that have prevented new pipeline capacity to the region turning to Russia during the 2018 polar vortex – but as the Wall Street Journal recently reported, this year could be the worst yet for New England’s residents.
The WSJ explained:
“The region’s power-grid operator, ISO New England Inc., has warned that an extremely cold winter could strain the reliability of the grid and potentially result in the need for rolling blackouts to keep electricity supply and demand in balance.”
New England is within a few hundred miles or less of the Marcellus Shale, the largest natural gas reserve in America, and yet, it has voluntarily cut off its supply to the Marcellus’ essential resources and pays multiple times more in natural gas prices than its Pennsylvanian neighbors.
New England is in a particularly dire situation compared to other cold regions in the United States, such as the Midwest, because its lack of pipeline access creates a reliance on global spot prices for natural gas throughout the winter. Due to Europe’s skyrocketing demand for LNG, prices have soared while available supply is diminishing as New England is now competing with Europe for resources.
The COO of the region’s power operator, ISO New England Inc., Vamsi Chadalavada expressed this concern to WSJ:
“The most challenging aspect of this winter is what’s happening around the world and the extreme volatility in the markets… If you are in the commercial sector, at what point do you buy fuel?”
Tanya Bodell, a partner at the consulting firm StoneTurn, also noted the increase in global prices to WSJ:
“Anybody who is depending on the spot market for their natural-gas supply is probably going to have a pretty significant sticker shock.”
To make matters worse, the New England region has retired over 5,200 megawatts of power in the past decade, equating roughly a quarter of peak winter demand. The combination of ballooning global demand and diminished power plant capacity in the region point to a significant decrease of available energy supply this winter.
The culprit of New England’s vulnerability? Short-sighted policymaking.
New England’s dire situation didn’t happen overnight, and while Russia’s invasion of Ukraine has potentially exacerbated the situation, it isn’t the root cause either.
Public policies in the Northeast and New England have consistently blocked the construction of new pipelines due to concerns from “Keep it in the Ground” environmental activists, that have effectively cut off New England from receiving critical supplies.
Complicating the situation further for New England, the Jones Act prohibits companies from shipping energy products on foreign vessels within the United States. Because the vast majority of U.S. LNG ships are made with components manufactured abroad, American natural gas producers cannot ship their contents to New England, forcing the region to rely on foreign imports to meet its natural gas needs.
It is also worth pointing out that anti-pipeline efforts do not effectively aid their stated environmental progress either. The State of New York, which has led many of the movements against fracking and pipeline development, is now planning to burn higher emitting fuels for electricity generation this winter in attempts to make up for the energy gap.
“New England’s electric grid delivered a massive blast of greenhouse gas into the region’s air during a recent stretch of cold weather, as power stations switched from natural gas to dirtier but cheaper fuel oil, according to data from the grid’s operator.
“During the six weeks ended Feb. 7, the region’s fleet of power stations burned 1.7 million barrels of fuel oil, accounting for more than 10 percent of the grid’s electric capacity, according to ISO New England. Fuel oil typically accounts for less than 1 percent of the region’s power production.
“Burning that fuel oil produced about 3.55 billion pounds of the greenhouse gas carbon dioxide in January alone, up 4,800 percent from emissions from fuel oil in January 2021, according to emission rate estimates used by ISO-NE emission analysts. The grid’s total carbon dioxide emissions totaled about 8.8 billion pounds in January, up 44 percent from the year-ago period.” (emphasis added)
Bottom-Line: Exacerbated by poor policy, New England is in for a potentially challenging winter. Despite the region being just a stone’s throw away from domestic, energy-rich natural gas regions that have proven to meet energy needs while producing a cleaner and more affordable energy source, New Englanders are being forced to compete with supply demand from Europe while facing blackout potential. Ensuring infrastructure connecting American natural gas reserves to New England is built would be a solution to counter these issues, but unfortunately, we’ve seen nothing but the opposite from policymakers and activists. Winter is coming – and it’s clear New England is once again not prepared.