Natural gas inflows to the US northeast region are changing significantly due to massive indigenous production increases from the Marcellus Shale. In fact, according to the EIA, there have been days in 2013 when the northeast was a net-gas exporter to Eastern Canada.
“Natural gas production in the northeastern United States rose from 2.1 billion cubic feet per day (Bcf/d) in 2008 to 12.3 Bcf/d in 2013,” the EIA wrote in its Today In Energy series.
Source: U.S. Energy Information Administration, based on Bentek Energy
Note: The Northeast includes Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, West Virginia, Ohio, and Kentucky.
The increased supply has resulted in greater natural gas use, mostly for power generation, and has also generally reduced natural gas prices. However, this has not always led to lower electricity prices for residents in states like Massachusetts where infrastructure bottlenecks caused brief but dramatic spikes in gas and power prices last winter.
“According to the U.S. Department of Energy, on Jan. 25 natural gas prices in New England reached $35 per million Btu while prices in the rest of the country remained below $4 per million Btu. In February electricity prices increased 400 percent during one cold spell,” executive director of the New England Ratepayers Association Marc Brown wrote in an editorial today.
Utilities are uncomfortable when their portfolios of generation fuels become over weighted with any particular supply source. And cost increases are often passed on to ratepayers, which can be treacherous both politically and socially.
Brown argues for rational energy infrastructure changes free from self-interested political deals, but fails to offer a solution:
“Putting all of our eggs in the basket of one fuel source is asking for trouble and will only further add to what are already the highest electricity rates of any region in the lower 48. Legislators and stakeholders need to take a more discerning look at the future of our energy grid and promote policies that will provide the region with dependable, reliable, affordable electricity, not one that is profligate with politically preferred projects that offer nothing but high electricity rates to the individuals and businesses that pay the bills.”
