Algonquin Gas Transmission

New England is hell-bent on decarbonizing quickly, and it’s been making some progress. But like it or not, the region still depends heavily on natural gas for both power generation and space heating, and gas supplies are stretched to the limit during periods of extreme winter demand. Worse yet, the Everett LNG import terminal, which for years has fed a big, soon-to-close gas-fired power station and supported the Boston area’s gas grid, may be on the verge of shutting down. Well, help may finally be on the way. Enbridge recently proposed an expansion to its 3-Bcf/d Algonquin Gas Transmission pipeline system. The question is, can it get built in a region notorious for its opposition to energy infrastructure projects? In today’s RBN blog, we discuss Enbridge’s Project Maple and the role it could play in New England’s aggressive plan to reduce its greenhouse gas (GHG) emissions.

Natural gas utilities and power generators in southern New England will have access to additional gas supplies this winter as Spectra Energy brings its 342-MMcf/d Algonquin Incremental Market (AIM) project into service. But Kinder Morgan’s planned 72-MMcf/d Connecticut Expansion has been set back a year (to November 2017) due to permitting delays and, more important, a multi-state effort to enable electric distribution utilities (EDUs) to contract for gas pipeline capacity for generators appears to have died, and with it prospects for at least one major project. Is New England destined to remain gas-supply constrained for years to come?  Today we consider recent developments regarding gas supply in the northeastern corner of the U.S., and what they may mean for Marcellus/Utica producers.

Developing new natural gas pipeline capacity in the Northeast isn’t easy. Environmental rules are tough, local citizens are well-organized, and—in New England in particular—the electricity market structure is not, shall we say, pipeline development-friendly. Still, with gas needs in the region rising, and all that Marcellus gas close at hand, midstream companies are doggedly and creatively pursuing pipeline projects, and making some headway. Today, we update efforts to advance the Constitution Pipeline, the Northeast Energy Direct project, and Access Northeast, all of which are planned to help move Marcellus gas into the heart of New England.

Natural gas prices at New England City Gates spiked up $6/MMBtu during a recent cold spell in November only to fall back $4/MMBtu last Friday (November 30, 2012) on forecasts of warmer weather. There have been three periods of price volatility in New England during the past year.