In Bad Trade Off, New England Forsakes Natural Gas For Petroleum

[thackney]

In Bad Trade Off, New England Forsakes Natural Gas For Petroleum
https://www.forbes.com/sites/ellenrwald/2017/12/27/in-bad-trade-off-new-england-forsakes-natural-gas-for-petroleum/#4cfa0bc12bfa

In New England, an overall concern for the environment and safety has actually led to further risks to the environment.

New England has been at the forefront of converting its fossil fuel power plants to use cleaner burning natural gas. In fact, the region’s electricity generation is over 50% reliant on natural gas. In addition, many New Englanders have gas lines in their homes and use natural gas for heating and cooking.

However, natural gas prices in New England are also the most expensive in the nation, because state and local governments have fought to keep out the pipelines needed to transport it into and around the region. Natural gas prices across the United States dropped with the advent of fracking, and it would be easy and cheap to supply New England with natural gas from the nearby Marcellus shale region. Several companies have tried to build pipelines to bring this gas to New England, but they were stymied by hostile local governments and ultimately by a 2016 ruling from the Supreme Judicial Court of Massachusetts that forbade utility companies from entering into long term natural gas deals with the intent of passing on charges to customers. After the legal case was decided in Massachusetts, Kinder Morgan withdrew plans for a new pipeline...

[thackney]

Cold snap makes N.E.world's priciest gas market
http://www.lowellsun.com/news/ci_31555169/cold-snap-makes-n-e-worlds-priciest-gas
12/28/2017

...In New England, spot prices more than tripled to the highest in over three years and turned the region into the world's priciest market.

Total U.S. gas consumption jumped 31 percent to 115.7 billion cubic feet on Tuesday from Friday. That's the most ever for this time of year in PointLogic Energy data back to 2007. Not only have more homes converted to the fuel from oil in Connecticut through Maine, the region's generators are more reliant on gas to produce electricity than anywhere else in the country....

[thackney]

Select Spot Prices for Delivery Today
https://www.eia.gov/todayinenergy/prices.php
DECEMBER 28, 2017

Natural Gas
($/million Btu)

New England   21.00
New York City   17.65
Mid-Atlantic   19.14
Midwest   3.15
Louisiana   2.76
Houston   2.69
Southwest   2.60
Southern CA   2.74   
Northern CA   2.89   
orthwest   2.59   

[IsailedawayfromFR]

It's really easy to see here the dearth of pipelines in NE.

[InHeavenThereIsNoBeer]

$10 to China, $21 to New England?

[thackney]

$10 to China, $21 to New England?

Spot market for delivery today, well, yesterday actually.

Demand exceeded capacity to supply in the short time frame.

For comparison, last week:

https://www.eia.gov/naturalgas/weekly/#tabs-prices-2

[thackney]

$10 to China, $21 to New England?

http://www.naturalgasintel.com/data/data_products/daily?location_id=NEAIROZ1&region_id=northeast

When the pipelines are bottlenecked and there isn't sufficient storage in the area, and a significant cold snap spikes demand...

[Cyber Liberty]

Can't see the article because Forbes doesn't like my ad-blocker, and I'm not turning it off because they're one of the reasons I have one.  Does the article mention anywhere that New England liberals foam at the mouth about fracking?

[thackney]

Can't see the article because Forbes doesn't like my ad-blocker, and I'm not turning it off because they're one of the reasons I have one.  Does the article mention anywhere that New England liberals foam at the mouth about fracking?

It focuses mostly on their blocking of the new pipelines.  Fracking in Western New York if allowed wouldn't help if they still block the pipelines.

[InHeavenThereIsNoBeer]

http://www.naturalgasintel.com/data/data_products/daily?location_id=NEAIROZ1&region_id=northeast

When the pipelines are bottlenecked and there isn't sufficient storage in the area, and a significant cold snap spikes demand...

That is one heck of a spike (and drop).   Thanks for the info.

I followed the link, but couldn't find an option to look further back.  I was curious about how rare an event this was.

Who eats the extra cost in a case like this?  Is this something where the utility has to pay threw the nose for a couple days and then recoups the cost over time from the end user?

[thackney]

A little more searching and I find prices even worse farther to the east.

[Bigun]

It focuses mostly on their blocking of the new pipelines.  Fracking in Western New York if allowed wouldn't help if they still block the pipelines.

I've heard it said that if you play stupid games you might win stupid prizes.  Seems like those folks up in the Northeast might have won one!

[thackney]

That is one heck of a spike (and drop).   Thanks for the info.

I followed the link, but couldn't find an option to look further back.  I was curious about how rare an event this was.

Who eats the extra cost in a case like this?  Is this something where the utility has to pay threw the nose for a couple days and then recoups the cost over time from the end user?

It depends on how you are metered and contracted both for natural gas and electricity.  Electricity spiked as well.  A big user like a factory may buy at predetermined pricing or at market rates.  Depends if they want to prepay for a smaller risk or gamble along with the weather.

[thackney]

I've heard it said that if you play stupid games you might win stupid prizes.  Seems like those folks up in the Northeast might have won one!

I remember this type of pricing with storms for Chicago in the mid 90s.  We built some really big pipelines to that area, mostly from Canada in the years following.

[IsailedawayfromFR]

I've heard it said that if you play stupid games you might win stupid prizes.  Seems like those folks up in the Northeast might have won one!

When I lived in the Northeast, the idiots there would not let the gas pipelines come through, they turned off nuclear power plants like Shoreham and of course would not allow coal to be used to generate power.  Instead, I had a 250 gallon tank and burned heating oil to heat my home and water.

The libs there could always depend upon a sympathetic Congress to bail out the residents there with heating oil credits.  Although this practice is not in vogue now, the folks who NIMBY are fine with heating oil trucks driving all over the country delivering oil.

[anubias]

Can't see the article because Forbes doesn't like my ad-blocker, and I'm not turning it off because they're one of the reasons I have one.  Does the article mention anywhere that New England liberals foam at the mouth about fracking?

Me either.  I’m not dealing with Sonobi.

[Joe Wooten]

I remember this type of pricing with storms for Chicago in the mid 90s.  We built some really big pipelines to that area, mostly from Canada in the years following.

Including one that ends at the Aux Sable gas processing plant about 4 miles from my house....

[thackney]

Including one that ends at the Aux Sable gas processing plant about 4 miles from my house....

Not one of mine.  They were all clean, dry NatGas, ready to feed distribution.  Gas Processing is upstream of that type of pipeline.

http://www.ogj.com/articles/2014/11/aux-sable-to-expand-illinois-plant-s-fractionation-capacity.html

Aux Sable Liquid Products—owned by Enbridge Inc., Veresen Inc., and Williams Partners LP—has been receiving liquids-rich gas streams from the Bakken via the newly built 77-mile Tioga lateral that connects Hess Corp.’s recently expanded 250-MMcfd Tioga gas plant with the Alliance pipeline at Sherwood, ND (OGJ Online, Mar. 24, 2011; Sept. 27, 2011).

The success of Aux Sable’s rich gas premium strategy, said Tim Stauft, president and chief executive officer of Aux Sable, along with increasingly volumes of liquids-rich gas from the Bakken, Duvernay, and Montney plays, has resulted in higher heat-content gas arriving at the inlet of the Channahon plant.

[Joe Wooten]

Not one of mine.  They were all clean, dry NatGas, ready to feed distribution.  Gas Processing is upstream of that type of pipeline.

http://www.ogj.com/articles/2014/11/aux-sable-to-expand-illinois-plant-s-fractionation-capacity.html

Aux Sable Liquid Products—owned by Enbridge Inc., Veresen Inc., and Williams Partners LP—has been receiving liquids-rich gas streams from the Bakken via the newly built 77-mile Tioga lateral that connects Hess Corp.’s recently expanded 250-MMcfd Tioga gas plant with the Alliance pipeline at Sherwood, ND (OGJ Online, Mar. 24, 2011; Sept. 27, 2011).

The success of Aux Sable’s rich gas premium strategy, said Tim Stauft, president and chief executive officer of Aux Sable, along with increasingly volumes of liquids-rich gas from the Bakken, Duvernay, and Montney plays, has resulted in higher heat-content gas arriving at the inlet of the Channahon plant.

I think that was the last gas pipeline built in Illinoisy. Lawsuits have delayed the rest, though I have not been keeping up on it the last 3-4 years.

[thackney]

I think that was the last gas pipeline built in Illinoisy. Lawsuits have delayed the rest, though I have not been keeping up on it the last 3-4 years.

There have been others.  Not a lot but the NatGas Pipeline capacity was built out pretty well before.

For example:

Rockies Express Pipeline
http://www.tallgrassenergylp.com/pipelines/rex/


Zone 3 is bi-directional flow and enabled the pipeline to flow up to 4.4 billion cubic feet per day of natural gas in Zone 3. West-to-east long-haul capacity on REX is 1.8 billion cubic feet per day.