Skyrocketing wintertime Northeast gas prices are a pipeline problem and not due to a paucity of regional natural gas supply, a lawmaker from Maine told U.S. Energy Secretary Ernest Moniz, speculating on potential additional supplies if the Maritimes & Northeast Pipeline (M&NE) is reversed to tap the Marcellus.
During a Senate Energy and Natural Resources Committee hearing on Tuesday, U.S. Sen. Angus King (I-ME) asked Moniz to use DOE to help coordinate federal and state efforts to expand natural gas pipelines throughout New England.
"This is an infrastructure problem and it's absolutely urgent for our region," King told Moniz. "We went into natural gas in a big way, as you know, starting in about the year 2000; now 50-60% of our electricity comes from natural gas. A lot of people, like myself, switched to natural gas to heat our homes and the winter before last we had the highest natural gas prices in the world...
"It's a pipeline problem, not a gas problem, as you know. And I think it’s going to take an all-of-the-above kind of strategy in terms of permitting. It's a really urgent problem for the region…And this is a problem of our system -- it's either federal or state, we don't have regional entities..."
There are projects in the works to help alleviate the gas-constrained Northeast market, Moniz said. However, a worry expressed by King is the potential reversal of the existing Spectra Energy’s M&NE to serve any of several proposed East Coast liquefied natural gas (LNG) terminals that have suggested that they could make use of M&NE capacity (see Daily GPI, Feb. 12; Feb. 3; Oct. 31, 2014).
"I would hope that you would consider as that [M&NE] project moves forward inserting a requirement that that gas be divertible during times of peak demand -- rather than going to Canada, that there be a provision that during peak demand it be retained in the region,” King said. However, there is currently not a project planned to reverse M&NE, although the idea has been talked about, Spectra Energy spokesman Steve Rankin told NGI.
"There are several proponents proposing LNG export terminals near our pipeline, and we have been in general discussions with them, but we don't currently have any plans in place to reverse the pipeline. To move forward with that, we would need to have firm contracts in place...that would underwrite basically our efforts to design a reversal in whatever way to serve existing customers and other future customers like LNG export terminals," Rankin said.
It is possible, though, to reverse M&NE, Rankin said. Other Spectra pipelines have expansions in the works to serve the Northeast market area, such as Algonquin's Incremental Market and Access Northeast projects, as well as the Atlantic Bridge project, which would involve M&NE facilities (see Daily GPI, Feb. 6, 2015).
"We have three expansions in various stages of development, and that would bring more gas supply from the Marcellus into the Maritimes & Northeast Pipeline system as well," Rankin said.
"Like all of our markets in Atlantic Canada, our contracts for gas supply that our customers have in place are indexed off of Boston prices, so if there's an impact on Boston pricing by adding more capacity to bring Marcellus supply in and just making it a more liquid trading point, it could lower the price a little bit. Experts have sort of indicated to us that that could happen. So all three of them really impact on Maritimes; it's just whether the facilities are on there or not is the question."
King's call for pipeline infrastructure to serve the Northeast is contrary to what some in New England have been saying about pipelines: that they don't want them for environmental or other reasons (see Daily GPI, Jan. 23).