The People of America's Oil and Natural Gas Indusry

Time For New Approach on Energy Infrastructure

Mark Green

Mark Green
Posted December 20, 2016

With a new administration and a new Congress coming to Washington, Americans may hope for new policies to advance energy infrastructure construction in this country.

Change is needed. Even though more than 80 percent of registered voters support additional infrastructure, and policymakers talk about it as a pressing national need all the time, a number of factors – including anti-progress activism and government red tape – delay, stall and/or threaten to block new pipelines and other essential energy projects.

Forward-looking leadership will dismantle artificial impediments to safe development. This starts with a view that U.S. oil and natural gas abundance – thanks to plentiful shale reserves and hydraulic fracturing – is a national asset to be supported and expanded, its benefits distributed to all parts of the country via 21st century infrastructure. Conversely, the unacceptable status quo is that official processes are too easily hijacked by vocal minorities, and that modern energy and its infrastructure are someone else’s responsibilities – both to the detriment of the greater public good.

We often mention New England to illustrate how a lack of adequate energy infrastructure is harming consumers – both residents and businesses (see here, here and here). U.S. Energy Information Administration (EIA) figures show that the region’s consumers pay more for electricity than the rest of the country. Below, the average price of electricity for all sectors for New England (red) and the U.S. (blue) the past five Januarys, according to EIA:

electricity_prices 

This is largely due to natural gas supply constraints that come into play during peak heating periods. Recently, ISO New England, the region’s grid manager, announced that while regional electricity supplies should be sufficient to meet demand this winter, “constraints on the region’s natural gas pipelines could pose a challenge to reliable operation of the regional power grid.” ISO New England’s Vamsi Chadalavada:

“Winter has become a challenging time for New England grid operations. Especially during the coldest weeks of the year, the natural gas infrastructure in New England is inadequate to meet the demand for gas for both heating and power generation. In fact, we’ve identified over 4,000 megawatts (MW) of natural-gas-fired generating capacity at risk of not getting sufficient fuel on any given day.”

In New England the energy infrastructure issue isn’t academic or theoretical, it’s personal. A Providence Journal editorial noted that New Englanders pay more for electricity than other Americans and decried recent developments blocking additional pipeline capacity that would help solve the problem. The editorial:

We would all benefit from that, but the message has been twisted by those who insist, apparently without concern for people who struggle to pay their heating and electricity bills, that alternative sources of energy such as solar and wind should fill the gap. The objective, it seems, is to curb demand for fracked natural gas that is available in states such as Pennsylvania and West Virginia, and the activists seem to be succeeding. By curbing that demand, activists hope to shift the emphasis to renewable energy sources such as wind and solar, and encourage the New England region to turn to those in meeting its energy needs. The problem is it's not so simple. The power plants in New England have the capacity to produce 31,000 megawatts of electricity. In the next three years, with several plants coming offline, the region will lose 4,200 megawatts, and it could lose up to 10,000 by 2020. To fill that gap with renewables, it would take hundreds of wind turbines like those off Block Island, or more than 30 square miles of solar panels.

Carl Gustin, a consultant to the New England Coalition for Affordable Energy, writes in CommonWealth magazine that inadequate energy supplies could have longer-term economic impacts for the region:

New England’s recent energy policymaking has focused on reducing climate change impacts spanning decades.  Much less attention has been paid to the challenges facing the region in the next five to ten years when power plant retirements and lack of new infrastructure portend even higher costs, more price volatility, reduced reliability – and significant lost opportunities for economic growth. Not only does failure to address these challenges threaten regional economic competitiveness in the near-term, it undermines the region’s ability to attract energy-intensive advanced manufacturing companies in highly specialized industries such as life sciences, medical devices, aerospace, semi-conductors, and nanotechnology.  Those companies will look elsewhere unless their concerns about energy prices are addressed.

Infrastructure issues in New England and other parts of the country are key local and state concerns, but Washington has a role to play, too. Going forward, the federal government should support the notion of safe and well-regulated infrastructure – that as a country we affirm the need to build safe pipelines and other projects. This is critically important to fully harness the U.S. energy renaissance and for overall American progress.

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.