Higher Natural Gas Prices Can't Be Separated from Old Battles over Pipeline

Monday, November 15, 2021

Remember that company from Texas, Kinder Morgan, that proposed in 2014 to bring bountiful Marcellus Shale gas from Pennsylvania to New England via a new pipeline across northern Massachusetts?  

Remember how Massachusetts basically told Kinder Morgan to get stuffed? 

(The list of influential politicians willing to support the plan had zero names on it.) 

Remember how so many of our leaders questioned the rationale for the project: that we needed more natural gas and a new pipeline was required to deliver it? 

Focus now on the present.  New Englanders are facing steep price increases for natural gas and other fuels.  On Sept. 20, Bloomberg reported, "Natural gas futures have been soaring, and they're set to get especially high in New England and California in the coming months."

Available inventories of gas, Bloomberg explained, "are tight to the point where a harsh winter could mean a supply crunch.  Any shortages would have an outsized impact on New England, where limited pipeline capacity makes it harder to bring gas from Appalachia."

In its latest Winter Energy Market and Reliability Assessment, ISO New England, which oversees the regional power grid, noted:

"Natural gas availability is more of a concern in New England due to the size of New England's peak winter natural gas demand combined with the limited number of pipelines and available pipeline capacity into the region...New England is served by three major natural gas importing pipelines; however, despite a few expansions, this capacity has remained largely unchanged for decades."

In April 2016, Kinder Morgan suspended efforts to win the necessary approvals for its $3.3 billion Northeast Energy Direct (NED) pipeline project, citing inadequate commitments from prospective gas customers.

In response, the Governor Baker administration said it believed the company's decision "highlights the pressing need to secure cost-effective hydropower and other renewable energy resources to meet the growing demand for affordable energy in Massachusetts and New England."  That was a reference to the plan to connect Massachusetts to hydroelectric power sources in Canada, which would involve new electric transmission lines within a 145-mile-long corridor cut through untouched forests in Maine.  

On Nov. 2, Maine voters approved a ballot question opposing this plan and requiring the Maine legislature to approve projects of this nature.  

Somewhere, Paul LePage must have been smiling.  

LePage was governor of  Maine when Kinder Morgan was pushing for the NED pipeline through Massachusetts and he supported it as heartily as Baker now supports hydropower from Quebec because it would have supplied a lot more gas to Maine and given a much needed boost to his state's economy.

Mainers were, of course, aware in 2016 that Massachusetts did not concern itself with how its actions relative to the pipeline might crush their ambitions, which leads to this question:  Was the Maine ballot question against Quebec hydropower transmission lines karmic payback for the loss of the NED pipeline?

Charlie Baker certainly hopes not.  

Asked on Nov. 4 if he saw the passage of the anti-hydropower referendum as the death knell for that project, Baker said, "No, I don't see it as dead."  There's talk of challenging the referendum in court as "unconstitutional," but details on such a move have yet to emerge.

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