Weather exposes need for more gas pipeline capacity

From Don Santa, president and CEO of the Interstate Natural Gas Association of America:

A recent magazine article summed up this winter with the headline “Thanks to fracking, natural gas supplies (barely) withstand ‘polar vortex’ assault.” 

It is certainly true that this winter would have been far more troublesome without our new domestic natural-gas abundance. But supply is only one side of the coin. The other side is infrastructure, and, indeed, pipelines make new shale gas supplies possible. 

{mosads}Despite their location on the doorstep of the Marcellus Shale — the single largest natural-gas deposit in the country — chilled Northeastern consumers faced natural-gas price spikes this winter as an unprecedented surge in demand from power plants and homeowners overwhelmed limited pipeline infrastructure. As the temperature in New York City plummeted to 7 degrees Fahrenheit on Jan. 22, the price to deliver natural gas into the city spiked to a record $123 per thousand cubic feet on the spot market. On the same day, it cost less than $5 to purchase the same volume of gas at the Henry Hub in Louisiana, the benchmark for U.S. natural-gas prices. 

Why? Because capacity is limited on the last few miles of pipeline needed for delivering Marcellus Shale gas to consumers in New England and New York. The Arctic weather has exposed some critical bottlenecks in the region’s pipeline infrastructure, underscoring the need to add more pipeline capacity so that all consumers can realize the full benefit of low-cost energy.

As many as 10 pipeline projects are in the works to deliver an extra 2 billion cubic feet of gas from the Marcellus Shale into the Northeast and Mid-Atlantic. Half that capacity won’t be completed until late 2018, so lawmakers in Congress are trying to accelerate the process.

The arduous federal regulatory approval process for constructing natural-gas pipeline infrastructure can take three years or longer. The House has debated and approved legislation (H.R. 1900) authored by Rep. Mike Pompeo (R-Kan.) to bring some discipline and accountability to the pipeline permitting process. We support this legislation and hope the Senate will act soon to move it forward. It is one of the few areas where Congress can make a measurable improvement to allow Americans to take full advantage of new natural-gas supplies by constructing the pipeline network that will be needed to keep pace with dynamic shifts in supply and demand.

We should not assume that the current natural-gas pipeline and storage infrastructure will be sufficient to handle present and future supply development. Natural gas has given the U.S. a phenomenal advantage. But to realize this advantage fully, we need to build the infrastructure that will permit all Americans to benefit from the shale revolution.

Washington, D.C.

EPA rules could mean higher electricity bills

From Peter Glaser:

Environmental Protection Agency Administrator Gina McCarthy’s statements on Feb. 25 that EPA regulations will provide states “flexibility” in achieving greenhouse gas emission reductions from coal-fueled electric generators will be taken with a grain of salt by those who have learned to watch what the EPA does rather than what it says. 

A few years ago, when the EPA adopted its regional haze regulations, the environmental agency promised that states would have maximum flexibility in designing plans to reduce hazy conditions at national parks and wilderness areas. But when it came time for the EPA to approve or disapprove those plans, the flexibility vanished and the EPA disapproved many state plans on the grounds that it wanted more stringent emissions controls. 

Indeed, with the administrator saying that its climate change rules will be designed to achieve “very significant emission reductions,” the issue for large parts of the country that are dependent on low-cost coal power is not so much how much flexibility the EPA will provide states in implementing its mandated emission reductions — it’s how much coal power the EPA intends to drive out of the market, and therefore how stringent the EPA’s mandated emissions reductions will be. 

For millions of Americans, the most direct impact of new EPA rules could be skyrocketing electricity bills. Let’s hope it never comes to that.

Washington, D.C.

Nation’s vulnerability to foreign oil a security issue

From Seldon B. Graham Jr.

Oil and ethanol information for the year 2013 is finally in. Foreign oil imports were 2,817,325 thousand barrels. U.S. oil production was 2,721,019 thousand barrels. Ethanol production was 316,964 thousand barrels.

Thus, total U.S. oil demand was 5,538,344 thousand barrels. Foreign oil imports are 51 percent of total oil demand. Ethanol is less than 6 percent of total oil demand.

Compare the 51 percent foreign oil imports to the 19 percent foreign oil imports prior to the 1973 Arab oil embargo. The United States is nearly three times as vulnerable to foreign oil imports now as it was before the Arab oil embargo. This is a critical national security issue.

It is impossible for ethanol production to ever get above 6 percent of oil demand because ethanol production peaked in 2011. Ethanol was to replace oil. This is a critical energy issue.

Austin, Texas