WESTFIELD – The Municipal Light Board conducted a public forum last night, attended by state officials and local residents, to discuss alleviating the high demand, and cost, of natural gas, especially during periods of high energy usage, typically the coldest parts of winter and the hottest parts of summer.
Westfield Gas & Electric Department Manager Dan Howard framed the New England energy situation with a 40-minute presentation of the factors that cause spikes in the price of energy, both natural gas and electrical generation. Those circumstances result in the highest natural gas prices in the country, often three to four times the cost of gas in other regions of the United States.
A primary cause of the energy problem is that the gas pipeline infrastructure was built in the 1950s. Howard said, and “there has not been a tremendous investment in improving” that gas delivery system since that time. The demand for natural gas in the northeast has increased significantly, taxing the capacity of the pipelines to deliver a sufficient amount of gas.
One key reason for that substantial increase in gas consumption is demand for cleaner electricity, meaning that electrical generation plans are now being fueled with natural gas.
“Years ago electric generation accounted for about 10 percent of all the natural gas used in the Northeast,” Howard said. “Now it accounts for 53 percent, so more than half of the gas coming into the region is being used to generate electrical power, so what happens to one (gas costs) does effect the other(electrical power).”
“Natural gas is the best fossil fuel for (electric) generation,” Howard said. “Natural gas is plentiful and should be inexpensive, but the problem is the (pipeline) infrastructure to get the gas here.”
Howard said the answer is new investment in “new bigger gas pipelines” but that pipeline companies are reticent to make that investment without long term contract with gas distribution and electrical generation companies, both of which are reluctant to make those long term commitments because of the volatility of the gas market.
Howard said another problem is that while the federal government, through the Federal Energy Regulatory Commission, established a system of oversight for the electric industry, called Independent System Operators (ISO), it has not yet taken that step to manage the nation’s gas industry.
The New England region is under the oversight of ISO New England Inc., the operator of the region’s bulk power system and wholesale electricity markets. ISO New England is the independent, not-for-profit corporation responsible for the reliable operation of New England’s electric power generation and transmission system, overseeing and ensuring the fair administration of the region’s wholesale electricity markets, and managing comprehensive regional electric power planning.
Howard said that there are more than 300,000 miles of gas pipeline in the country, but only five pipelines provide gas to the Northeast. There are plans to added pipeline capacity, along existing pipeline rights of way, with a target date of 2016 for competition, but the regulatory permitting review process has not yet risen to the level of state government.
The energy supply and volatility of the cost of energy in New England is also an economic issue. The how cost of electrical power and natural gas is putting companies, especially manufacturing firms, at a competitive disadvantage to similar industry in other parts of the country which have much lower energy costs.
High regional energy costs, passed on to the consumers, are also affecting “a meaningful economic recovery” in the region because resident have less “disposal income” to spend at local stores and businesses, Howard said.
Barbara Kates-Garnick, undersecretary of the Executive Office of Energy and Environmental Affairs, said the state is taking a holistic approach to meeting the state and regional energy demand. The first step is to reduce that demand through conservation. The second step is to foster other energy generation options, in particular renewable energy such as hydroelectric generation, wind power and solar generation.
Kates-Garnick said the pipeline infrastructure “is a big issue in New England, that lack of capacity,” but added that it must be resolved through a regional solution working in concert with the other five states.
“It’s a regional issue and we have to take a regional approach to make (pipeline) projects more viable,” she said.
The states are currently forming a regional energy planning board.
Gas-fueled electrical generation will continue to have a major role as it replaces coal and oil-fired generation plants and as nuclear plants, such as Vermont Yankee, are taken off line.
“We have to figure a way out of this energy dilemma,” Kates-Garnick said. “It’s a major issue and opportunity.”
The state is committed to reducing greenhouse gas emissions and to continue its efforts to increase sources of “cleaner energy”,” Kates-Garnick said. New energy technology, much of it being developed in the state, will also have a role in decreasing the regional dependence on fossil fuels.
