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New England does not need new pipelines: Enviro group

5 Apr 2017, 4.24 pm GMT

New England does not need new pipelines: Correction

Updates statement by Todd Piczak

Washington, 5 April (Argus) — New England's winter gas and electricity needs can continue to be met without natural gas pipeline expansions, an attorney with an environmental group told the Energy Bar Association annual meeting in Washington this week.

David Ismay of the Conservation Law Foundation recommended during a panel discussion that liquefied natural gas from peak shaving facilities in the region be released in a way that incentivizes the users of the fuel to generate power, among other options.

"LNG and propane deliverability in the region adds 2 Bcf (56.6mn m³)," he said. "This is how lights stayed on in the polar vortex."

In the extreme cold of January 2014, pipelines serving the US northeast were fully utilized and power plants of all types scrambled for fuel. Federal and state regulators and grid operators responded with a review of procedures to coordinate gas and electric service efforts.

Ismay's group participated in a successful 2016 effort to defeat a proposed change to Massachusetts law to allow electric distribution companies to purchase gas pipeline space and release it to merchant power plants.

A ruling by the state supreme court encouraged Enbridge, then Spectra Energy, to delay its Access Northeast natural gas pipeline project expansion until 2019 or later.

Ismay said energy efficiency and demand response in periods of high energy usage have the greatest cost savings. He also recommended adding compression and looping on gas pipelines, and electric storage facilities.

Gas industry officials insisted that the fuel shortages will remain serious. Renewable energy generation may not be enough on high demand days, explained Macdara Nash, vice president of distributor National Grid. LNG has its own reliability issues, he said, and gas use is rising as customers convert from oil products.

Todd Piczak, assistant general counsel at Kinder Morgan, said neither the Federal Energy Regulatory Commission (FERC) nor the Independent System Operator of New England want to address the problem of gas capacity that merchant generators do not want to pay for when they are not using it. They can only recover those transportation costs for the few days a year when power prices stay exceptionally high, and use cheaper but less reliable gas transportation instead, he said.

Kinder Morgan last year shelved a massive expansion of the Tennessee Gas pipeline, called Northeast Energy Direct, because not enough shippers signed up for its services.

FERC just wants to fix pipeline operations to serve generators, Piczak said. "But at the end of the day, FERC order 809 does not create capacity," he said.

Order 809 was adopted by FERC in 2015 to synchronize the scheduling of the gas and power industries to attempt to avoid supply shortages.


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