Pipeline needed before it’s too late

Endless debate over natural gas sacrifices attainable “good” for unlikely “perfect”

SOME GAS OPPONENTS appear confused about the synergistic relationship between natural gas and renewables, as well as the climate benefits New England will realize with adequate natural gas pipeline capacity.  Both adequate gas capacity and increased renewables are essential to dramatically reducing New England’s carbon footprint, a conclusion supported by scientific studies.

We formed Coalition to Lower Energy Costs (“CLEC”) because both renewables and lower costs can be achieved much sooner than gas opponents realize.  Adequate natural gas pipeline capacity to meet New England’s existing heating needs and to power existing gas-fired power plants will dramatically lower emissions and energy costs. This same capacity will also be the foundation for a renewable energy future.

Time is of the essence in dealing with global warming; the steps we fail to take now are lost opportunities.  The endless debate about “perfect” solutions off in the future hinders prompt actions that will achieve “good” results now.  Emotional accusations, typified by a recent anti-gas op-ed, are counterproductive.  Tactics rooted in fear are the true enemy of energy reform.

Every serious study concludes that, to integrate energy from sun, wind, and water, our electric grid must be “flexible” to balance variations in renewable energy availability.  Sometimes it’s windy (usually during deep winter); at other times the air is still (usually during hot summer days).  It’s dark half of each year, and even during the light half, the grid must accommodate cloudy days.  These uncontrollable weather variations create serious challenges to grid reliability.

Flexibility can be contributed by various supply and demand tools, with varying costs and attributes, which help to instantaneously match electricity supply and demand.  Examples include batteries, pumped hydro, demand response, and energy efficiency.  However, natural gas-fired generation is the cheapest form of flexibility available, and the only form available on the scale needed to integrate renewables immediately and in the foreseeable future.  Natural gas-fired generators turn on and off in minutes when they are needed.  They efficiently ramp their output up and down rapidly to match ever-changing electricity demand that remains after we exhaust available renewable energy.  These characteristics give New England’s gas-fired generators valuable flexibility, but they must have fuel to operate when the wind stops blowing or clouds roll in.

The issue in New England is what we do now to ensure the grid flexibility to accommodate, for example, our existing renewables and an additional 4,000 megawatts of wind projects under development and the 2,500 megawatts of solar projected by 2024.  One suggestion in a recent op-ed is that “grid-scale energy storage – already being implemented in California, Maine, and elsewhere – can address the intermittent nature of wind and solar energy without expanding gas infrastructure.”  This, unfortunately, is presently incorrect.

Here are the facts on energy storage:  As of 2015, there were only 350 megawatts of non-pumped hydro energy storage in the entire United States, including from flywheels, batteries, and compressed air combined.  In New England, pumped hydro storage comprises about 1,600 megawatts of the region’s roughly 32,000 megawatts of generation.  Assuming (without any basis in fact), that half of the non-pumped hydro storage in the entire U.S. is in New England, that 175 megawatts would comprise less than 1 percent of the capacity resources New England needs. Together, these are inadequate to balance significant additional renewables.

Moreover, energy storage is still truly expensive.  For example, according to a July report from McKinsey & Company, “[i]n 2007, large-format lithium-ion storage cost about $900 per kilowatt-hour; today, the cost is about $380, and it’s on track to drop below $200 in five years.” As of June of 2015, New England had the highest electricity prices in the continental U.S. at just under $.20/kWh, with the U.S. average being just below $.13/kWh. In sum, energy storage today is about 2,000 times more expensive than the most expensive electricity in the continental United States and has not yet sufficiently penetrated the market to make a meaningful difference.

A far more viable alternative, espoused by CLEC and others, is that New England should build adequate gas pipeline capacity to allow us to reliably heat our homes and businesses and simultaneously supply the existing, flexible gas generation we have already built.  Around the year 2000, the region invested in nearly 12,000 megawatts of efficient natural-gas fired generation to displace coal and oil generators.  When built, and until 2010-11, when homes and businesses accelerated migration from more expensive, more polluting oil to cheaper, more efficient natural gas, New England pipelines could supply all of these gas-fired generators.

Yet, as migration from oil to gas for heating increased, the unexpanded existing pipelines increasingly became bottlenecked.   During the Polar Vortex winter of 2014, bottlenecks were so bad that the gas generation fleet had an obligation to provide nearly 11,500 megawatts of capacity but could only provide a mere 3,000 megawatts.  The flexibility of this generation was negated because it could not access fuel at reasonable prices, or at all, due to pipeline constraints.

As a “solution,” New England’s last remaining coal- and oil-fired generators, which can take several hours if not days to ramp up, have become vital again, at times producing over 42 percent of our electricity, and for entire winter months producing as much as 26.2 percent of our electricity.  New England’s coal and oil plants are not sufficiently flexible to allow us to integrate significant renewables, nor should we make them so.

The Regulatory Assistance Project recently compared natural gas-fired generators to “Swiss Army knives” due to their flexibility, but cautioned against building too many to help renewables when a flexibility “toolbox” could be better. This argument may have intuitive appeal elsewhere, but not in New England.  CLEC does not urge construction of massive amounts of new natural gas-fired generation.  To the contrary, CLEC advocates supplying the region’s existing “Swiss Army knives” with fuel, so their flexibility can be utilized to integrate renewable energy at the lowest possible cost.  When these generators reach the end of their useful lives, generally around 2030, the region’s flexibility toolbox will contain additional useful tools, including energy storage, at quantities and prices that will make transitioning to an all-renewables future feasible.

It makes no sense now to leave our existing “Swiss Army knives” without fuel for the winter, as we revert to less flexible and highly polluting coal and oil and pay the highest electricity prices in the continental United States.  We do not make more expensive renewables feasible by making all energy expensive.

There’s another huge benefit to constructing adequate gas pipeline capacity.  Unlike other regions, New England still relies excessively on residential heating oil, including 29 percent of Massachusetts’ households, compared to 5.5 percent nationally.  Massachusetts, for example, consumes the third highest amount of residential heating oil of any state.  This overreliance on oil has precipitated the current energy cost crisis.  With production of lower-emission and extremely inexpensive gas from the nearby Marcellus Shale region, New England has finally begun to transition en masse away from oil heat.  Consequently, capacity in the region’s pipelines has become scarce in some 2,000 hours per year, leaving little to none available for natural gas-fired generators.  It cannot be argued that switching from low-efficiency, high-emission oil heat to high-efficiency, low-emission gas heat is bad for our climate (or wallets).

CLEC supports the EPA’s and New England states’ current and proposed regulatory measures to reduce methane emissions to maximize the climate benefit of gas over oil (and coal).  However, we cannot ignore that over 5 million homes in the Northeast still heat with oil, each burning between 850 and 1,200 gallons each winter alone, and accounting for 87 percent of all U.S. residential heating oil sales. The methane emissions associated with this oil consumption have thus far gone completely unregulated, while methane emission from new natural gas production is regulated.  EPA’s recent proposal to regulate methane from the oil and gas sector is its first attempt to regulate methane from oil, and is generally good, but given natural gas’s lower carbon content and cost advantage over oil, New England cannot afford to continue burning billions of barrels of oil for heat each year.

In light of New England’s high electricity prices, existing fleet of underutilized, flexible natural gas-fired generators, and continued over-reliance on oil, CLEC supports the construction of about 2 billion cubic feet per day of natural gas pipeline capacity in two new or expanded pipelines.  This will provide the gas we currently need for heating, a minimum level of gas-fired power generation in winter, and to integrate renewables year-round.  In this way, natural gas will truly provide the foundation for a low-carbon, renewables-based energy future for New England.

Meet the Author

Anthony Buxton is owner of an energy storage project in Maine and general counsel for the Coalition to Lower Energy Costs