No subsidies for gas pipeline projects

It's a terrible risk for consumers

IT’S CRUNCH TIME when it comes to the Omnibus Energy Bill that is being debated on Beacon Hill. Lawmakers have to decide if they will continue to promote fossil fuel energy consumption or if they will instead help Massachusetts lead the way in building an economy based on clean, sustainable energy sources. They must decide if they will halt subsidies for large gas pipeline projects, even though those projects are unpopular and hurt the clean energy progress the Commonwealth has made.

The proposed “pipeline tax” asks ratepayers to foot the bill for constructing one or more multi-billion-dollar infrastructure projects. Through a new surcharge, consumers would subsidize imports of fracked gas that might not even be used by Massachusetts residents. The legality of this proposal is in doubt, but with regulatory proceedings advancing, state legislators should act now to prevent utility companies from passing the cost of pipelines onto the consumer. The pipeline tax has seen bipartisan opposition on Beacon Hill, where legislators first pushed to remove pro-gas language from House legislation, then actively prohibited gas pipeline subsidies in its Senate counterpart.

Under such a scheme, electric ratepayers would bear the risk of long-term investments in oversized, overbuilt pipelines—soon-to-be stranded assets. Ordinarily, gas shippers and generators are expected to pay for infrastructure expansion, if expected revenues from sales would justify the cost. When the Department of Public Utilities (DPU), which backs the pipeline tax, was asked to explain to the Commonwealth’s highest court why the state’s power generators were not keen on investing in proposed new pipelines, Supreme Court Justice Margot Botsford interjected “Because it’s too risky!” The fact that Massachusetts electric customers are being asked to shoulder the cost means the industry has determined that the risk is not worth the reward. In fact, one proposed pipeline project, Kinder Morgan’s Northeast Energy Direct, has already been suspended due to a clear lack of demand.  But Spectra’s Access Northeast project is still seeking such funding.

Subsidizing such pipelines is not only bad for our environment – it would encourage the sustained use of a fossil fuel and encourage the ecologically damaging practice of fracking – it’s a terrible risk for consumers. Gas prices are notoriously volatile, and the industry’s desperate attempts to sell the gas overseas could eliminate perceived benefits for ratepayers at home as energy prices connect with a costlier global market.

There are proponents who suggest gas helps our climate targets by averting the use of other fuels such as oil, but this argument has even more holes in it than our leaky gas distribution system. First, a few days per year of using gas and oil is better than 50 years of a new oversized gas pipeline. Second, we’ve already taken measures to address the constraints facing our energy system a few winters prior. The best steps going forward are to further encourage energy efficiency and diversification with clean power sources.

Fortunately, the resistance from communities and others who would be impacted by new gas pipelines is strong. Just recently, residents marched 43 miles to oppose the Access Northeast pipeline and the “pipeline tax,” mirroring a similar action by allies in the Western and Central Massachusetts two years prior. In the Berkshires, groups are appealing the water quality certificate for the one remaining piece of Kinder Morgan’s expansion efforts in Massachusetts, and in West Roxbury, a foolishly sited pipeline (which runs by an active quarry) has met with incredibly strong opposition, spanning from abutters and local clergy to members of Congress.

At the State House, there has been particularly strong bipartisan opposition to the pipeline tax for Access Northeast, with the Massachusetts Senate voting last month 39-0 to ban the pipeline tax and almost 100 House members publicly declaring their opposition earlier this year.  We don’t know how the Supreme Judicial Court will rule, but the Legislature should make sure that the final bill prohibits the pipeline tax.

Meet the Author

Joel Wool

Masters in urban and environmental policy/Boston City Council aide/Clean Water Action, Tufts University
Massachusetts has a unique opportunity to move our energy policy forward, but it cannot be done on the backs of a pipeline tax.  Beacon Hill’s lawmakers have the chance today to quash the pipeline tax and encourage investment in sustainable, clean energy resources. Here’s hoping they take it.

Joel Wool is an energy and environmental advocate for Clean Water Action.