It should come as no surprise to anyone in the energy industry, that New England is facing an energy crises. Energy prices skyrocketed last winter, the effects of which were felt by residents and businesses alike. Due to heavy natural gas constraints as a result of inadequate pipeline capacity, last winter New England paid roughly 4.2 Billion more dollars for natural gas than western Pennsylvania, where natural gas is abundant. The average high trade for the Tennessee Gas Pipeline (TGP) Zone 6, last winter was an astronomical $80-$100 per dekatherm (dth). Algonquin hit as high as $90 per dth for spot pricing. These unprecedented pricing trends can be expected to continue until adequate supply is introduced into the New England Market.
Pricing trends for the winter of 2014 look equally tumultuous, with base load Nuclear slated to go down for maintenance, and two major base load coal plants set to be retired, both of which will increase the demand for natural gas in the New England Region. Although the United States has hundreds of years of natural gas available, the pipeline infrastructure serving New England is inadequate to meet current demand trends for both heating and energy generation.
With Kinder Morgan Partner LP, the owner of the Tennessee Gas Pipeline (TGP), announcing its planned project to bring low cost, abundant Marcellus Shale Gas into the region, New England is now looking at 3 expansion projects, which are slated for completion by 2018, to help ease the supply issue.
New pipeline supply into our region will bring back low cost power, generated by clean domestic natural gas. With low cost gas and power comes good paying manufacturing and industrial job, a much needed natural stimulus to the New England economy. New England can win back jobs lost to southern states, and with these jobs, a state like New Hampshire can bring back what we used to refer to as “The New Hampshire Advantage”. This project will not only create jobs for the building of the pipeline, but will also have a substantial impact on creating jobs and stimulating the NE economy down the road.
The proposed pipeline will have scaleable volume of between 800 MMcf/d and 1.0 Bcf/d. Slated to be open for service on November 1, 2018, the project will involve two stages, first connecting TGP 317 to Wright, N.Y, and then connecting Wright to Dracut, Massachusetts. While final details of which towns and areas this pipeline will travel through are not yet finalized, there is good indication that some relief will be coming to New England by 2018.
So What about the Winters before 2018?
If you are heavy user of natural gas, it would be extremely advantageous to find a Natural Gas Portfolio Manager. Freedom Energy Logistics has a proven track record of saving their clients millions of dollars through their proven intelligent portfolio management techniques. For Information on how Freedom can help protect your company from volatile winter pricing, visit our website at felpower.com, call us at (603)-625-2244 or Email Solutions@felpower.com