Saturday, February 16, 2013

It's all in the pipeline


As the utilities close down oil and coal fired electric generation plants, they are being replaced by natural gas fired plants. And thanks to fracking we are floating on a cloud of methane. But just as many fracked wells are not in production because of lack of pipelines, so too increased demand for gas for generation has pushed pipeline capacity to the limit and beyond in New England.
Electricity prices in New England have been four to eight times higher than normal in the last few weeks, as the region’s extreme reliance on natural gas for power supplies has collided with a surge in demand for heating.

Frigid temperatures and the snowstorm that hammered parts of the Northeast last week have revived concerns about the lack of alternatives to natural gas. Many plants that ran on coal or oil have been shuttered, and the few that remain cannot be put into service quickly enough to meet spikes in demand. The price of electricity is determined by the price of gas.

Last year, natural gas provided 52 percent of New England’s electricity, and that share is expected to grow. Gas is generally cheaper than other energy sources, and the lower costs have spurred the retirement of aging coal generators and nuclear reactors. The six-state New England region and parts of Long Island are the most vulnerable now to overreliance on gas, a vulnerability heightened by a shortage of natural gas pipeline capacity, but officials worry that similar problems could spread to the Midwest.

“We are sticking a lot of straws into this soft drink,” said William P. Short III, an energy consultant whose clients include companies that move and burn gas. “This is a harbinger of things to come in New England, as well as New York.”

James G. Daly, vice president for energy supply at Northeast Utilities, a company that, through its subsidiaries, provides electricity to homes and businesses in Connecticut, Massachusetts and New Hampshire, said: “There is concern we don’t have enough capacity to supply heating and electricity generation.”
Yet, curiously, while the price has climbed, nothing has been shut down for lack of supply. And so we must build new pipelines. Fortunately gas pipelines don't spill. They do blow up from time to time, however.

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