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The High Cost of the Lack of Pipelines

As we recently reported, while spot-checking the New England grid operator during a 4-day window in late January and early February, EEIA found that New England power producers were generating FOUR TIMES more electricity from burning high-emitting fuels (trash, garbage, wood chips and fuel oil) than from wind and solar.

Worse, wholesale prices of electricity throughout the region ran double or more the prices that other, well-supplied regional grids were paying.

The reason: supplies of natural gas were inadequate and more expensive due to lack of pipeline capacity from the Marcellus. This is the very predictable consequence of New England and New York state governments refusing permits for several proposed but now cancelled pipeline projects that would have solved the problem.

Now, the U.S. Energy Information Administration (EIA) confirms our findings and reports that this condition prevailed throughout almost all of January, worsening as the month went on. Here are EIA's charts depicting this:

In its February 10 post, EIA describes the situation more politely than we would: "Cold weather and constraints on natural gas pipelines to New England can sometimes limit the availability of natural gas delivered to power plants during winter months. These constraints can increase the price of natural gas in the region. In response, some generators may switch to lower cost or more readily available sources, including petroleum liquids."

In a recent interview with Fox Business, Toby Rice, CEO of Marcellus producer EQT, put it more bluntly. "The fix to high natural gas prices is increased production and investment in adequate infrastructure." The problem: "lack of adequate pipeline infrastructure," he said. "Natural gas prices here in Pennsylvania -- $3.50  well below what anybodys paying in the northeast. We need more pipeline infrastructure." He pointed to four pipeline projects that have been canceled since 2016, which could have served more than 25 million homes. Rice points out that these nixed projects have restricted nearly 10% of the nations natural gas supplies.

New York and New England elected officials and their appointed regulators may think their anti-pipeline and anti-natural gas policies are climate-friendly. In fact they are contributing to higher greenhouse gas emissions while inflicting significantly higher energy costs on their consumers and businesses  a lose-lose proposition. The solution: bring back those cancelled projects!

Americans everywhere will be far more supportive of an orderly transition to lower carbon energy if they are not unnecessarily victimized by much higher energy costs resulting directly from their elected leaders misguided zeal to restrict the pipeline availability of clean-burning natural gas.

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