Environmental Group: Governors' Natural Gas Proposal Too Expensive, Rushed

Jun 24, 2014

Credit natural gas drilling / Flickr CC

An Environmental Group says regional energy policy makers and the natural gas industry have too cozy a relationship. To prove their case the Conservation Law Foundation (CLF) released a series of documents obtained by right to know requests. Those indicated therein say the claim is overblown.

The release highlights a growing unease in the environmental community toward bringing new natural gas pipeline into New England.

For a few years now, representatives for the governors of New England have been trying to find a solution for electricity price spikes in the coldest months of winter. In January, they announced a plan: they would come up with a way to charge electricity consumers for new natural gas pipelines and new electric transmission lines connected to Canadian hydropower dams.

The CLF alleges this plan, which if it goes through will cost New England ratepayers billions of dollars, comes from straight from the gas industry.

“There’s a general hostility to really any public involvement in the process, it’s a very insider process, and we also see that they are inviting some people to the party, they’re inviting the pipeline companies and the large gas and electric utilities,” says Christophe Courchesne, staff attorney with the environmental advocacy group.

“Well, it’s sort of sad,” responds Tom Welch, the chair of the Maine Public Utilities Commission, who the CLF indicated in its brief as too cozy to natural gas developers and Maine business interests, “Let me put it this way, people are entitled to their own views and their own interpretations.”

Welch says groups of every stripe had ample opportunity to give input, and yes that included pipeline developers.

A Plan to Overbuild?

For Courchesne the real issue is the region really only has a natural gas supply problem during a few days of the year. He thinks it could be solved with some market tweaks, like letting liquefied natural gas coming from tankers into Boston Harbor take up the slack on the coldest days of the winter, or investing more in energy efficiency.

“A number the market participants who could offer that service are coming in and saying we could do this for much cheaper than building a multi-billion dollar pipeline across the region,” he says.

Currently there are at least two pipeline projects planned for the region: the Algonquin Incremental Market Project, which would bring somewhere between 400 and 600 million cubic feet of natural gas per day and the Tennessee Gas Pipeline which would carry somewhere between 1 billion and 2.2 billion cubic feet per day.

Courchesne’s group is not the only one making these claims: Environment Northeast, another group concerned about climate change, put out a paper claiming much the same last month.

And Vermont’s Governor Peter Shumlin has said he believes the region should be cautious about overbuilding infrastructure and getting stuck paying it off even if it’s not being used.

Defenders of the governors’ proposal say ratepayers are already paying billions of dollars every winter in over-market natural gas prices, and the solutions the environmental community is putting forward aren’t enough to keep those prices down.

“This is a context in which size matters, and obviously we’re going to continue to look this, but our preliminary view was they were vastly smaller in scale in terms of what was actually needed,” says Welch.

Welch says a lot of the proposals the CLF is looking for could serve as band-aids until the gas situation is solved, since new pipelines wouldn’t be in the ground until 2017 at the earliest.

But the plan is far from final, as a statement from Governor Hassan’s Spokesman Bill Hinkle makes clear the state has yet to sign on the dotted line for this proposal.

It reads in part: “Governor Hassan believes complete public scrutiny is an important part of this conversation before New Hampshire can move forward with the process.”

A Wavering Consensus?

There are big energy challenges coming for New Hampshire and New England: there are gigawatts of coal plants that are expected to retire in the coming decade, ever more homes in southern New England switching from heating oil to natural gas, and of course climate change to deal with.

For its part the CLF isn’t putting forward a comprehensive plan to deal with these challenges, they are just saying they think the solutions are smaller, and cheaper.

“In fact there’s a substantial risk we’ll be over-investing in this infrastructure when we could meet that need with smaller bites of the apple,” says Courchesne.

The CLF’s opposition to the pipeline expansion is in some ways novel. The group helped lead the effort to transition to natural gas power plants across the region in the 90s, as an alternative to coal.

Then environmentalists called natural gas a bridge to a clean energy future, now they call it a gangplank.

But there seems to be a strong consensus among regulators, the grid operator, industry groups and other energy watchers of all stripes that more gas pipeline is a must for New England. And the CLF and other environmental groups will have their work cut out for them if they hope to break that consensus. 

The Full Statement from Governor Hassan's Office:

"As you know, New England as a whole had significantly higher energy costs over the winter than most of the country, largely due to gas pipeline constraints.  High energy prices hurt our families and could limit our economic growth in the future. New Hampshire has engaged with the other New England states to continue to explore the most prudent ways to help lower energy costs for ratepayers while pursuing sustainable long-term clean energy solutions, working with regional stakeholders, including consumer representatives and other interests, to ensure that new resources are brought to the region in a cost-effective manner." 

"Representatives of the states have developed a preliminary proposal to present for public comment prior to seeking necessary regulatory approvals, and Governor Hassan believes complete public scrutiny is an important part of this conversation before New Hampshire can move forward with the process. This public process began with a presentation to a NEPOOL committee on Friday."

"Throughout preliminary discussions with other states, New Hampshire has been very clear that we will only move forward with proposals that reduce costs to ratepayers and that all proposals must respect state siting requirements and protect natural resources. The RFP process that the states are exploring does not commit New Hampshire or the region to moving forward with any particular project, as any decisions will be subject to public review and evaluated based on a variety of factors, including energy cost savings."

"In order to keep New Hampshire’s economy moving forward, continuing efforts to reduce energy costs and diversify energy sources remains a priority for the Governor. Governor Hassan continues to believe that New Hampshire deserves the latest technologies in order to protect what we all love about our state, and that any project must provide real benefits to the people of our state. And as for Northern Pass, Governor Hassan's positions remains the same: she does not support the project as proposed, and she does not support the use of eminent domain for the project."