Opposition to pipeline construction to be costly for New England heating

Fuel Fix:

A Federal Energy Regulatory Commission study is warning that infrastructure constraints in New England could send the region’s natural gas prices soaring this winter from recent lows to among the highest in the world for a second year.

The commission’s Energy Market Assessment, delivered last week, noted that while forecasters didn’t expect the coming winter to be as severe as last year’s, there is a risk for a colder-than-normal season. The threat — combined with a continued infrastructure shortage — has sent an October measure of winter futures prices for gas near Boston to an average of more than $21, about 80 percent higher than traders bid them up before the last winter, according to the regulator’s analysts.

The Federal Energy Regulatory Commission, or FERC, oversees a large sector of the midstream and electricity industry.

After the briefing last week, commissioner Tony Clark laid out his interpretation of the problem: A lack of infrastructure has isolated natural gas markets in New England and the Northeast.

“That’s a huge concern,” Clark said at the presentation, “That seems to be what’s driving all this. It’s really not a supply problem that we have in this country, but we have a rather severe infrastructure problem.”

Related: Northeast U.S. gas at decade-high for winter on supply concern

The United States natural gas market is organized around numerous local hubs where gas is shipped from producers and then distributed to consumers and other uses such as electricity generation. The going rates for gas at those spot markets usually vary slightly as local demand and supply change, especially through the seasons.

Markets in New England have seen large seasonal swings in the two winters as natural gas demand has grown and the infrastructure to supply the region has been congested.
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When the supply is constricted it is rationed first to homes for heating.  That means some electric utilities will have to shut down operations which means manufacturing plants get shut down for lack of power.  Some of the problem could be relived with local supplies of gas in New York, if the fracking phobic left were not blocking drilling.  I think there is also a lack of leaderhip on the issue in New England which is infested with the anti energy left.