Supporters of expanding the pipelines that deliver natural gas to New England are hailing a preliminary report from Massachusetts as evidence that the region needs more natural gas to reduce future energy costs.
The report, commissioned by Massachusetts, suggests energy costs in that state will rise without an increase in natural gas supplies, which are currently constrained by limited pipeline capacity.
However, opponents of expanding the pipeline infrastructure, who advocate for increasing energy-efficiency efforts and using alternative energy sources, claim the report is too limited in its geography to influence the regional conversation because it focuses only on Massachusetts.
While the report focuses on energy costs in Massachusetts, the discussion of expanding natural gas pipeline infrastructure is a regional one. In January, the six New England governors unveiled a first-of-its kind effort to expand natural gas pipeline capacity in the region through public subsidies. Another report estimated that if natural gas prices in New England were closer to that of other areas of the Northeast, electricity customers in the six-state region could save $1.5 billion a year, with $120 million of that savings in Maine. However, that regional effort stalled in August and may be dead because of Massachusetts politics. It’s unclear how this report will impact politics in that state, which will have a new governor next month.
The Massachusetts Department of Energy Resources commissioned Synapse Energy Economics, based in Cambridge, Massachusetts, to complete the report. The state commissioned it after groups like the Conservation Law Foundation and Acadia Center, which oppose the public subsidization of pipeline expansion, argued that a more thorough investigation was needed of how alternative energy sources would impact future energy costs.
The preliminary report, which doesn’t factor in the major pipeline expansions that have been proposed, was released Thursday at a stakeholder meeting in Boston. Its official release date is listed as Dec. 23, but it’s not clear whether the report will be released on Tuesday.
The report contradicts what the opponents of gas pipeline expansion have claimed, which is that alternative energy sources are a viable replacement for pipeline expansion, said Anthony Buxton, a partner at PretiFlaherty and chair of its energy and utilities practice group.
The report is “historic” because it was commissioned by natural gas’ opponents, but instead of supporting their positions, it proves “beyond a shadow of a doubt that … Massachusetts desperately needs more natural gas pipeline capacity,” said Buxton, who is spokesperson for the Coalition to Lower Energy Costs, a group that wants to increase the supply of natural gas to New England by at least 2 billion cubic feet per day. Buxton also represents Kinder Morgan, a company that has proposed a pipeline project that could increase the amount of natural gas entering New England by 1.2 billion cubic feet a day.
“The opponents of gas proposed 28 different alternatives to be considered in eight different scenarios, they hired the most liberal consultant firm in New England, one that’s strongly identified with the objectives of the Conservation Law Foundation and others, ran the model and came out exactly where we came out,” Buxton said Monday. “It’s quite stunning and what it shows is the opponents don’t understand the New England grid.”
Peter Shattuck, director of clean energy initiatives at Acadia Center, a Rockport-based nonprofit, doesn’t see it that way. The report is a step in the right direction, Shattuck said on Monday, but is constrained by a number of factors that limit its influence and import.
“I think it’s an important first step,” he said. “But we have a new batch of governors and they need to replicate this analysis on a regional level so it’s fully capturing the potential of alternatives.”
Besides being focused on only Massachusetts, the report is constrained by the fact it doesn’t take falling oil prices into account or future carbon costs imposed by states with mandates to reduce carbon emissions over the next several decades, Shattuck said.
The preliminary report from Synapse looks at eight different scenarios, each of which assumes a different configuration of variables that include use of alternative energy resources, low or high energy demand, low or high cost of natural gas, and the availability of hydropower from Quebec.
The report shows that in five of the eight scenarios, including the ones in which alternative energy sources were factored in, the energy costs for Massachusetts over the next 15 years would increase anywhere from $400 million to $6.2 billion more than in a theoretical scenario based on current conditions.
The two scenarios in which the report shows a savings include an assumption of low natural-gas prices. However, that’s an assumption that can’t be made, according to Benji Borowski, an associate at PretiFlaherty who attended the Dec. 18 stakeholder meeting.
“We don’t think that’s a world that could ever happen,” he said, “because our pipelines are constrained, there is imbalance (between supply and demand) and natural gas prices can’t go down with that imbalance.”
Patrick Woodcock, director of Gov. Paul LePage’s energy office, wrote in an email Monday that he not prepared to comment on the preliminary Synapse report.
“I don’t think I want to comment on it until it is done, but the preliminary report does show a need for additional natural gas infrastructure – not surprising at all,” he wrote. “It will be interesting to look at all the scenarios to see what level of gas is optimal.”
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