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36 Comments

  1. The problem here is with electricity pricing and not pipelines. It is important to remember that gas serves more than merchant power plants. Gas provides home heating and hot water for most households.

    Functionally, gas pipelines enjoy no more privilege than power lines-above or below ground, water lines or sewers. The legal structures for each vary but the outcome, for the property owner, is the same. Pipeline financing is usually structured within the rubric of Master Limited Partnership.

    1. Gas utilities that serve heating loads generally commit to firm delivery and pay for that service. Industrial customers make the choice; if it is important to maintain business continuity, they will commit. Normally they simply shutdown when supplies are tight and prices rise.

      Electric power producers shouldn’t be favored with low, interruptible pricing and still expect to be able to operate and sell power during high price periods.

      1. Your point being “shouldn’t be favored with low, interruptible pricing” — but are. And the reason they are is because we have deliberately chosen to reward interruptible, zero marginal cost power with price signals above its actual market value as a way of subsidizing interruptible zero-margin power production.

        Germany, at least, is awakening to the reality that there is value in reliable capacity as well, and are debating ways to subsidize lignite plants to insure reliable capacity remains available.

        But whether for power, heat, or both, the natural gas has to get from its production fields to its consumers somehow. As production and consumption patterns shift, so must distribution. What I personally take home from stories such as these is that merchant energy markets are not all they’re cracked up to be,.that there remains some value in long-term planning for long-lasting infrastructure.

        This goes doubly (triply?) for hoped-for-but-yet-to-materialize deep-penetration wind+solar, with their co-requisite natural gas generation, gas production, gas distribution, and expanded electric grids. Sure, “the market” can give us in some sense a short-term locally “optimal” solution — if that’s what we really want. Because that’s what we have structured our markets to give. And if that “optimal” solution does not include reliable energy on cold cloudy days, its because we haven’t subsidized that market with price signals for reliable energy.

        And if we decide we don’t want to pay the freight for those price signals and can do the job cheaper with direct public subsidy for reliable energy, fine. Just don’t tout the result a “merchant market” — because it ain’t.

      2. I agree with you about pricing and the irresponsible behavior of some producers. Some of that is the product of the regulatory framework of the northeastern electric grid.

        In the ERCOT region, we have two markets, a wholesale and a retail and if you are any kind of producer, you sell into the wholesale market. It works pretty well except that the wind producers, until recently, were selling wholesale at negative rates(mostly in the spring and fall) and upsetting the wholesale market for nuclear and coal producers who can’t spin up and down on a moments notice. Wind producers can do this because they used to receive a direct credit of 2.5 cents a kwh, whether the demand was there or not.

        Another factor to consider is the war on coal power, which is occuring at various levels. The gas industry is really making hay with the war on coal. If national energy policy was less quick to dispense with coal, we would not have these pipeline issues in the northeast. Yes, I know coal is dirty, but for the moment, it is equal to nuclear in reliability and price stability. All else being equal, I am for the cleanest, most reliable generation which is available with price actually being a secondary concern.

        The only problem I have with gas generation is over reliance on it and that it will become absurdly expensive when the drillers and the pipeline companies get the export facilities they desire and they start selling the gas overseas. Then we will really be stuck.

        1. @jardinero1

          The gas industry is really making hay with the war on coal.

          I’d rephrase that. In many cases, the gas industry is financing the war on coal, directly influenced political decisions with industry representation in advisory and decision-making positions, and is supplying the academic arguments against using coal.

          See, for example, this story about Aubrey McClendon’s (who was CEO of Chesapeake Energy at the time) $25 million donation to the Sierra Club for the express purpose of funding its “Beyond Coal” campaign.

          http://science.time.com/2012/02/02/exclusive-how-the-sierra-club-took-millions-from-the-natural-gas-industry-and-why-they-stopped/

          In the halls of power, take a hard look at the professional activities of people like John Podesta, Hazel O’Leary, and Mac McClarty to see how the gas industry using a revolving door to influence political decision making.

          In academia, take a good look at MIT’s “Future of Natural Gas” report and notice who funded the glowing commentary about natural gas and compare that report to “The Future of Coal” or the “Future of Nuclear.”

          Though the Sierra Club stopped taking money from Chesapeake, they did not return any funds.

    1. The fact they don’t want to sell just doesn’t smell right. There’s something fishy near Denmark.

  2. If gas is to be exported, then it will by LNG tanker. Much of the gas is in the Bakken formation, so piping it to coastal ports requires a lot of pipeline.
    Are they even thinking about an INLAND port for loading LNG tankers?
    Perhaps the draft of LNG tankers is too deep?

    1. The gas also has to be liquified for export. Nobody on the east coast or the Great Lakes wants a liquification facility. If they are to be built anywhere, they will be built on the Gulf Coast and are actually being permitted and under construction in the present time. Most of the nation’s gas pipeline infrastructure originates on the gulf so piping gas there for export is less of a political issue than in the northeast.

      1. @jardinero1

        One aspect of the North American natural gas industry that gets little attention is the fact that Mexico, which used to be a significant US supplier country, has rapidly increased its own use of gas while not increasing its production. Over the past five years, a number of pipes between the US and Mexico have reversed flow and the US is now a net exporter of gas to Mexico. The volume is already substantial and growing.

        http://www.platts.com/latest-news/natural-gas/houston/us-gas-exports-to-mexico-will-more-than-double-21637857

        Our Marcellus shale formation is closer to major Canadian markets than gas from western Canada and is displacing that cross-country gas.

        http://www.eia.gov/dnav/ng/ng_move_expc_s1_m.htm

        IOW US exports don’t necessarily require LNG.

  3. When a new natural gas pipeline is constructed into an area, we need to speak about the (mega) tons of CO2 being newly delivered into that area. Not directly, of course, but effectively that is what is happening.

  4. @JohnGalt

    A bit to your south, you could find similar signs against uranium mining. How did the education effort go?

    Education is never something that should be spoken of in the past tense. It is an ongoing challenge and opportunity. The 119 million pounds of uranium still exist just outside Chatham, VA. The truth remains that the material can be mined safely and profitably.

    1. The truth remains that the material can be mined safely and profitably.

      Correct. So – In other words JohnGalt just goes for the easiest political answer he can muster with little or no cognitive effort.

      Virgina has close to 8000 natural gas wells with over 2000 fracked and is OK with fracking many more. Obama just opened up much to the east coast to oil exploration. Both are routinely far more destructive (land use, legacy, accidents) than best practice uranium mining but hey its too much trouble to research even basic facts on the matter.

      1. @John T Tucker

        Virginia also has 110 licensed and operating coal mines and a several hundred year history of extensive underground mining of a material that is arguably as dangerous as uranium.

        http://www.virginiaplaces.org/geology/coal.html

        The moratorium made some sense when it was initially imposed as a temporary measure when uranium was first discovered in Pittsylvania county. The state did not have any regulatory structure for that particular mining activity. The answer should have been to create the structure, not to maintain a permanent ban on a legitimate, safe, extraction enterprise.

        One of the interesting aspects of this particular debate has been the strong opposition by “conservative” Republicans who normally are fierce defenders of private property rights. The deposit in question is located well within the boundaries of two large family-owned farms. The nearest neighbors to the mine would be about a mile and a half away, with the exception of ancestral home of one of the families that owns the land. They intend to continue using that home even though it is within a few hundred yards of the proposed mine location.

      2. It’s impossible for far too many Americans to tolerate or even be willing to see any nuance in any issue. It would be impossible for them to even consider the potential benefits vs the potential detriment to any community regarding any economic activity. The willingness to delve into the nuances of a decision is flat. The affect, however, is high intensity. I wish I understood why.

      3. @JohnGalt

        The effort to build a pipeline is just beginning. As I acknowledged in my article, it is likely that Dominion will complete the project as long as the economics don’t change very much. They have eminent domain and support from FERC in their favor. They also have lots of friends in the fight that have far deeper pockets than the Coles family.

        The effort to mine uranium is also far from over. As you said, the economic case is not strong right now for any new uranium supply. Prices are weak because the market is still working off the excess capacity created by the tsunami that resulted in a complete shutdown of 54 plants in Japan plus 7 more in Germany.

        When China’s 28 nuclear plants under construction become 28 nuclear plants in operation, there will be some changes. If Japanese people get tired of ever increasing electric bills, perhaps they will realize that they are being played by their trading houses who are making bank by arranging oil and LNG imports.

      4. Comically sad:

        Poll: Only Germans Think They Are Helping to Fix Global Warming

        Only in Germany did the majority of poll respondents report that their country has a “mostly” or “somewhat positive” role in combating global warming.

        Because Energiewende has been accompanied by a rapid move away from nuclear power following the Fukushima disaster Germany has had to make up its energy deficit by increasing its reliance on coal for the first time in years. German CO2 emissions have actually been rising over past three years. ( http://time.com/3028723/germany-climate-change-coal-poll/ )

      5. … make up its energy deficit …

        @John T. Tucker

        There is no energy deficit in Germany!

        http://www.bloomberg.com/news/2014-06-26/germany-s-new-coal-plants-push-power-glut-to-4-year-high.html

        There’s a glut of electricity, much of it from coal power plants commissioned over 5 years ago when power prices were high (and before an expansion of renewables and announcement of nuclear phase out policy). Despite demand growth since the economic downturn of 2009, many of these plants are expected to lose money (as is typically the case when there is an oversupply). Yes, pretty comical that Time and others can be so misleading and continue to get basic facts and analysis wrong of the German situation.

  5. Last night Al Jazeera America ran a documentary entitled “Dirty Power”. I don’t know if it is available on their website, but it is worth viewing. I was impressed with its segment on NE, which gave both sides, pro and anti, equal shrift. On the pro side, they interviewed a former anti, who offered much the same arguments we see offered on this site. They also touched on technologies discussed here, such as small reactors cooled by materials other than water. Also of interest was their discussion of “problems” one wouldn’t normally consider concerning various energy issues, such as the high incidence of prostitution and sex slave trafficking in oil and fracking boom towns, such as those in North Dakota.

  6. Rod and others,

    Since Indian Point is just across the river from me, I was considering trying to take in some of the New York DEC meeting regarding the Indian Point pollution discharge permit. Not having attended one before, I’m curious if it would be worth my time. I’m interested in hearing some of the science behind the discussion, not interested in wackos with tinfoil hats, wearing skeleton outfits and laugh tapes to mock pro nukes. Any ideas as to whether I can expect more of the former or the latter?

    1. @Tim Wyant

      I’ve never attended a public meeting outside of the southeast/mid-atlantic region (South Carolina, North Carolina, Virginia and Maryland). I’ve never personally run across the antics that I know happen in other places like Vermont.

      My guess is that a meeting about Indian Point will attract a mix of people. It is worth going if you have a strong will, sign up early for the question and answer session, and plan to ask questions about the science behind the effort to force Indian Point to use cooling towers when the intake modifications that the company has proposed is a better engineering solution that balances environmental effects on water with those of effects on air, land use, and overall safety.

  7. Matt Wald (NY Times) wrote an interesting article last month about the downsides of fracked natural gas. According to the article, the flaring off of natural gas and the methane emissions are negating the reduced CO2 emissions that natural gas has as positive vs. coal:

    http://www.nytimes.com/2014/06/04/business/energy-environment/the-potential-downside-of-natural-gas.html

    Building and maintaining a large gas pipeline network is another big downside, a fact which is overlooked by the fossil fuel industry. I think having an all-electric home with an efficient heat pump is also more efficient from an infrastructure perspective.

    1. I read an article in Scientific American that discussed the CO2 that comes up the well with the natural gas. It quantified the relative amounts, and as I remember, there was *alot* of CO2 in the stream. I’ve been unable to find the article again. I read it a long time ago, like 10 or 12 years maybe. Anyone able to find it, please post the link.

  8. Upgrading existing pipelines is expected to be a colossal undertaking, with some systems still in use in large cities dating back to the late 1800’s and having on average thousands of leaks. Its a huge ongoing investment.

  9. Will they turn to Peter Schumlin and ask him to explain the pressure he put on Entergy to close Vermont Yankee? Will they turn to Deval Patrick and ask him to help people on Cape Cod understand the importance of Pilgrim or to Maggie Hassan with the same question about Seabrook?

    @Rod Adams.

    Is there a reason why you are leaving out Paul LePage (here)?

    He seems to be your best chance in NE, and is in a close three way race (seeking once again to decimate his State with knuckle dragging policies that appeal to some 1/3 of voters). From technology innovation to jobs, business competitiveness, carbon reductions, cost savings for ratepayers, and more … renewables (especially offshore wind and tidal) appear to be a no brainer for the state. Maine residents (and former employees) have a less than enthusiastic relationship with their decommissioned 25 year reactor in Wiscasset (and legacy of waste that is going nowhere and stands in the way of re-development of the site). With its poor safety ranking and 15 Cape towns voting to close down Pilgrim, I’m not sure residents of Cape Cod (pressuring Deval Patrick and his likely successor Martha Coakley) feel any different.

    1. @EL

      The pattern should have been clear, the statement in the post was aimed at the NE governors in states that have operating nuclear plants that are being pressured by ill-informed opposition to have them shutdown. Maine has no operating nuclear plants and no plants that can be restarted.

  10. Natural gas booming reminds me of any mining operation. They all seem to go great guns for a few years with bonanza strikes and then they go to bust and create more Western ghost towns. Will that happen with natural gas? With all this new expansion, how many years do we have until the dirt is sucked dry?

    Maybe, there’s another upside to all this new infrastructure. When the “natural” gas is gone maybe the vast piping network can be used for manufactured gas using small high temperature nuke plants as their source of process heat.

  11. States would be wise to break up the gas/electricity monopoly utility companies into separate gas and electric monopolies. Homeowners with current technology could choose to go all nat gas or all electric or any combination in between. Electric companies could negotiate with major pipeline suppliers to get gas for their generators, but would have to compete with the local gas companies for retail customers. My local electric monopoly also is also the gas monopoly and they are stodgy. I wanted nat gas installed to replace oil heat in my home and they wanted me to cover most of the cost of the infrastructure ($3,000) to run it down my street.
    The house is not rural, and is surrounded by streets that already have gas. The utility wants me to pay for their infrastructure even tho they already collect a monthyly charge for “distribution”. Even with the abundance and low price of nat gas it still has these kind of distribution problems. Farmers in the midwest are still using propane to dry corn when an agressive utility would have hooked a lot of them up to nat gas.

  12. Rod, you won’t be surprised to hear this, but I should let you know that the closure of San Onofre has also necessitated new “investments” ($$$ out of ratepayer pockets) in natural gas pipelines in Southern California. Our grid operator was forced to call on consumers to conserve (“FlexAlert”) on a random Thursday in February (2/6/14) because the polar vortex had created so much demand in the East that deliveries fell short in California. The FlexAlert was called for the whole state, even though PG&E still has Diablo Canyon providing 20% of its electricity! California has now reached absurd levels of dependance on natural gas. We normally only have FlexAlerts in the summer when our own demand is highest.

    Anyone who hasn’t already should begin to question the reliability of natural gas. It’s reliable if you personally have your own supply stored on-site, but it may not be available by pipeline when you — and everyone else — need it most.

    http://www.utsandiego.com/news/2014/Mar/19/natural-gas-pipelines-sdge-socalgas-project/

    Note how the cost of California’s new pipeline ($629 million) is nearly as much as the cost of just buying new steam generators for San Onofre again ($761 million in 2011 dollars). Insane.

    1. Coincidentally, the remodel I am currently doing in Glenville, CA is an old ranchhouse that is owned by a customer that installs gas pipelines. A small company, they did 23 million $ last year, according to the owner. This year he expects to do at least ten million more. He is busy all over the state.

  13. An interesting article here about a guy who spent twenty years finding gas leaks in Boston for the utilities, then turned whistleblower. The original plan was to bring a lawsuit on behalf of the city for all the trees being killed by the gas. Probing the soil under a lot of dead or dying trees would show zero oxygen levels, but unless the leaks were prolific enough to risk an explosion the pipeline companies would ignore them. The climate change effects only came into the picture later on.
    https://medium.com/matter-archive/the-environmental-scandal-thats-happening-right-beneath-your-feet-406a9f0d4166

    1. thanks for that. It was really interesting. I had no idea a gas leak could do that. Its not all that new of a concept either:

      From the 2007 Boston Globe:

      Gas leaks killing trees? ( http://www.boston.com/news/local/articles/2007/12/13/gas_leaks_killing_trees/?page=full )

      In 1922, a Massachusetts court found that a gas company was liable for damages for trees harmed by gas leaks in Salem. In a similar case in 1927, another gas company was required to pay damages to the town of Spencer. Also, according to researcher Spencer Davis Jr., in 1961, a gas company paid damages to New York City for killing trees (the New York Telegram headline was “Trees apparently killed by natural gas.”)

    1. @Mitch

      I don’t have time right now to sign up for their free trial. Can you summarize the article?

      Notably, a real nuclear industry comeback would decimate any hope of making money by selling carbon credits or offsets, which is apparently the market that “Carbon News” is aiming to serve.

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