Report: New England electric sector will face gas supply deficit

A recently released report on the adequacy of New England’s natural gas pipeline infrastructure has identified the potential for shortfalls in gas supply to electric generators through 2020.  The November 20, 2014 report, Assessment of New England’s Natural Gas Pipeline Capacity to Satisfy Short and Near-Term Electric Generation Needs: Phase II, was prepared by consulting group ICF International for regional electric grid operator ISO New England Inc.  It found “a high probability that the electric sector will have a gas supply deficit on 24 to 34 day per winter by 2019/20.”

The Phase II report follows on a 2011/12 “Phase I” study by ICF of the adequacy of the natural gas pipeline infrastructure in New England to serve the combined needs of the core natural gas market and the regional electric generation fleet.  In the years since the Phase I study, existing natural gas and electric power systems have experienced significant changes, with further changes projected.  ISO-NE also identified the need to extend the power sector gas supply adequacy analysis beyond the peak winter and summer demand day, to examine supply adequacy throughout the peak winter demand period (December 1 through February 28).

ICF’s Phase II report presents its updated findings given these changes.  Its conclusions include:

• Despite the likelihood of 450 MMcf/d of new interstate natural gas transportation capacity being added by the end of 2016, the New England market is likely to remain supply constrained through 2020.
• Updating projections for energy efficiency has a significant impact on projected gas consumption for electric generation. The studied cases reduced projection winter peak day gas consumption by as much as 550,000 Dth by 2019/20.  However, this was not sufficient to eliminate the projected winter peak day supply deficits.
• Future imports of liquefied natural gas (LNG) into the region are likely to be well below the rated capacity of the import terminals.  Neither the Northeast Gateway nor Neptune offshore import terminal has received any shipments since 2010, and neither was projected to receive any future LNG shipments in this study.
• The Maritimes & Northeast Pipeline from Eastern Canada into New England is expected to continue to flow at full capacity on a peak winter day. Eastern Canadian gas production is expected to decline overall from 2015 through 2020, even as the Deep Panuke field ramps up its production. Historically, the Canaport LNG terminal in St. John, New Brunswick, has been managed to keep the pipeline full on peak winter days (when New England gas demand and gas prices are highest). In the future, with fewer LNG shipments coming in, the pipeline will flow full on fewer winter days, reducing natural gas supplies into New England.
• The Winter Near-Peak analysis indicates that gas supply deficits may occur not just on peak days, but also on multiple high demand days throughout the winter. Based on projected gas supplies, local distribution company (LDC) demands for retail gas supply, and electric generator gas demands, there is a high probability that the electric sector will have a gas supply deficit on 24 to 34 day per winter by 2019/20.

With the Phase II report now in ISO New England's hands, the grid operator has an updated analysis of the adequacy of the region's natural gas pipeline infrastructure to meet all the demands on it through 2020.  ISO New England describes itself as playing three critical roles: grid operation, market administration, and power system planning.  From all three of these perspectives, projections of a high probability of gas supply deficit for the electric power sector are troubling.  ICF's findings thus may shape how ISO New England -- or state and federal regulators -- reforms the New England gas and electric markets.

January 25, 2011 - Ruby Pipeline

Photo: a recent view of the beach in Seal Harbor, Maine.

Last week, I had the chance to see the development of the Ruby Pipeline in northern Utah.  Construction of this project started in July 2010, and work is proceeding along the 680-mile route from Wyoming, across Utah and Nevada, to Oregon.  The project is aiming to begin shipping gas from the Rocky Mountain region in June 2011.  The pipeline will interconnect with other pipelines serving local distribution companies with customers in California, Nevada and Oregon.  It is being developed by El Paso Corporation, the owner of North America’s largest gas pipeline system and one of the continent's largest independent natural gas producers.

Here's a link to the project's website and a PDF of the route map.  I saw a portion of the route across Box Elder and Cache Counties in Utah, where the pipeline runs along the Wasatch Front and climbs up over a pass to Cache Valley.  The pipeline itself generally runs underground (buried about 3 feet deep).

If you're really interested, here's a link to the pipeline's tariff (a 236-page PDF).

2/2/10

A nuclear renaissance? President Obama's proposed $28.4 billion budget request for the Department of Energy includes a lot of nuclear power, of both utility and military natures. On the power side, as part of an emphasis on a clean energy economy, the budget includes expanded loan guarantees and incentives for up to 10 new nuclear reactors. As Secretary Chu put it, "This budget supports new approaches to energy research and invests in the next generation of scientists and engineers, and it will spark new clean energy projects nationwide, including restarting the American nuclear power industry." Is whether nuclear power is "clean" still considered controversial? On the military side, the budget proposal speaks of "deterrents", with over $1 billion for a combination of nuclear nonproliferation and weapons development.

As the nation's largest energy consumer, the federal government is trying to cut its energy costs too. President Obama has called for federal agencies to trim greenhouse gas emissions by 28% by 2020 - a reduction in federal energy use of 646 trillion BTUs, and up to $11 billion in costs - although some costs will be required to achieve this savings.

Veolia has completed its divestiture of waste-to-energy plants in the USA, selling the Miami-Dade contract to Covanta.

In Maine, the PUC has approved the installation of smart meters by CMP, the state's largest utility. These meters can be read remotely, which is estimated to save ratepayers $25 million over 20 years -- in addition to enabling time-of-use and other smart grid solutions.

Also in Maine: Maine Liquid Methane Fuels LLC won approval from the Brewer Planning Board last night for its plan to develop Maine's first liquid methane fuels energy plant. The proposed $50 million facility will connect to the Maritimes & Northeast Pipeline, liquefy natural gas, and load it into trucks for distribution. The idea is that where demand density for gas isn't high enough to support pipe distribution of gas, trucks can be an efficient way to get relatively inexpensive gas to consumers. We will see in 2011, when the Brewer plant is slated to begin operations.