New England ISO

Producers in the Marcellus and Utica shale plays could be moving a lot more natural gas into New England, if only there was enough pipeline capacity to get it there. An increasingly gas-hungry neighbor to the nation’s most prolific production area, New England has added precious little capacity to transport gas, and the fates of game-changing pipeline projects that have been proposed hang in the balance. The region’s unique gas-delivery challenges, their market impacts and possible solutions are the subject of RBN Energy’s newly released Drill Down report, “Please Come To Boston—New England’s Ongoing Gas-Supply Dilemma”. Today, we provide a preview, and highlight some of the report’s findings.

The much-discussed shortfall in natural gas pipeline capacity into New England has been largely mitigated this winter because generators—encouraged by low oil prices and incentives to lock in backup supplies of oil and LNG—are ready, willing and able to switch their dual-fuel power plants away from pipeline natural gas and onto oil and LNG-sourced gas if market conditions warrant. But now that prices for those fuels are more attractive, could switching to oil and imported LNG during winter’s coldest days and nights actually be a longer term solution to New England’s pipeline capacity problem instead of just a stopgap until new pipelines are built? Today, we begin a look at the changing economics of burning oil and LNG-sourced gas to help power New England when the region turns arctic, and what they may mean for proposed pipeline expansion projects.

This winter the Northeast US is being blasted with record cold weather. As a result, daily natural gas prices in both New York and New England have spiked more than $30/MMBtu above the US benchmark at Henry Hub, LA. But the average price you’ll pay for natural gas in the region will likely depend on whether you root for the New York Giants or the New England Patriots. With their dismal records and embarrassing mistakes, it’s not easy being a Giants (or Jets) fan these days. But on average – thanks to new gas pipeline capacity added this past fall, natural gas prices in New Jersey and New York have remained less volatile relative to US benchmark Henry Hub, LA than prices in New England. That is because the six-state region continues to suffer from woefully inadequate gas transmission infrastructure. Today we begin a two-part analysis of the still-stalled effort to deliver more supplies to gas-hungry New England.