As Rhode Island consumers grapple with natural gas prices up to 30 percent higher than a year ago industry officials promise relief is in the pipelines. Two natural gas pipelines from Canada plus a new transport source of liquefied natural gas (LNG) from the Caribbean have started supplying New England in the last year and a half, said Thomas M. Kiley, president of the New England Gas Association.
These three projects have increased the region’s daily pipeline capacity by about 25 percent, Kiley said, and even more projects are in the offing – although not soon enough to protect consumers from digging a third deeper into their pockets this year to pay their gas bills.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
The Portland Natural Gas Transmission System, a $500 million project completed in February of 1999, made its first deliveries in early March of that year. It installed 292 miles of pipeline from the Quebec border in western Canada to Portland, Maine where it interconnects with a new joint facilities pipeline and then heads on to Dracut, Mass., where it connects with the Tennessee Gas Pipeline.
Then in May, 1999, the Atlantic LNG project started delivering LNG from Trinidad and Tobago through a $1 billion liquefaction facility where gas is “frozen” to negative 260 degrees Fahrenheit and then shipped via the LNG tanker Matthew to Distrigas of Massachusetts Corp. in Everett, Mass. The Cabot LNG project, part of an international consortium, Kiley said, also expanded pipeline interconnections from Distrigas to both the Algonquin and Tennessee pipelines.
Finally, the Maritimes & Northeast Pipeline was completed in late 1999 and began its first natural gas deliveries in January, 2000 from the Sable Island Offshore Energy Project of Eastern Canada where there’s “huge, enormous reserves,” Kiley said.
This pipeline project includes two new compression stations in Maine and more than 200 miles of new pipe from the Maine/New Brunswick border to a joint facilities point south of Portland, Maine – and a delivery capability to New England of approximately 400 million cubic feet per day, Kiley said.
With all these new projects, New England’s daily pipeline capability has increased from 2.8 billion cubic feet in early 1999 to about 3.5 billion cubic feet per day today, Kiley said, an influx of pipelines that makes natural gas an increasingly flexible choice for consumers.
Prior to 1992, when the Iroquois Gas Pipeline began linking North American markets and western Canadian natural gas supplies, the Algonquin and the Tennessee pipelines were the only sources of natural gas for the New England market. That meant freezing conditions in the Gulf of Mexico, however rare, had the potential to stall delivery.
But not anymore. “New England now isn’t dependent on one region,” Kiley said, and now has more than 33,000 miles of pipeline and main, 1,777 miles of transmission and 31,410 miles of distribution.
Several more pipeline projects and infrastructure enhancements are planned in the next few years for New England to meet the growing demand for natural gas, Kiley said. These projects include El Paso Energy/Tennessee Gas Pipeline’s “Eastern Express New England” and Duke Energy/Algonquin Gas Transmission System’s “HubLine,” which involves 24 miles of pipe hooking through the Maritimes & Northeast Pipeline to travel partially underwater to a power plant in Weymouth, Mass.
Gas is on the rise
According to the U.S. Department of Energy, Energy Information Administration, pipeline capacity entering New England increased by more than 50 percent from 1990 to 1998.
Liquefied natural gas represents a significant source of New England’s peak day supply, Kiley said, with storage of approximately 14 billion cubic feet of LNG located in various terminals around the region which are owned and operated by local distribution companies. Peak day deliverability is approximately 1.4 billion cubic feet per day.
Besides the growth in domestic pipeline capacity imports have also played an increasing role in New England’s natural gas supply, rising from 11 percent in 1988 to 53 percent in 1999. The main trading partner is Canada, which supplied 38 percent of regional gas supply in 1999. Also contributing are liquefied natural gas imports from Algeria, Australia and since mid-1999, Trinidad and Tobago.
LNG imports in 1999 totaled nearly 100 Bcf (billion cubic feet), more than double 1998 levels and contributed to about 15 percent of 1999’s regional market consumption.
In 1999, LNG provided about 90 billion cubic feet or 16 percent of New England’s total consumption, Kiley said, and although transportation fuel is an added component of its costs LNG is still “competitively priced with the pipeline gas.”
Kiley also said there has also been “extraordinary interest” in the New England market for new natural gas-fired electric generation.
Right now about 15 percent of the country’s power plants are fueled by natural gas, said Stephen Leahy, NEGA’s vice president of policy, but more than 90 percent of the planned additional generation facilities are gas-powered or duel-fueled, capable of using both oil and gas.
Determined by market
Over 25,000 megawatts of new gas-fired generation has been proposed with ISO New England, although what eventually gets developed is subject to the dynamics of the new deregulated market, Kiley said.
But most industry projections are for from 6,000 to 9,000 MWs of new gas-fired plants to come on-line in New England over the next few years. The current capability of New England’s electric system is about 25,000 megawatts with a new peak recorded this past July of 22,500 megawatts.
Among new plants proposed are two located in Rhode Island that are already approved by the New England Power Pool – a 350-Megawatt facility called Indeck North Smithfield LLC and a project by FPL Energy LLC to build a 500-megawatt combined cycle gas-fired plant in Johnston.
A groundbreaking is scheduled for the Johnston plant this Thursday, Oct. 26, but residents in North Smithfield and Burrillville have staunchly opposed the Indeck plant. At press time that project was still under review by the state Energy Facility Siting Board, which can approve major power plant developments in the state over the objection of local governments and residents.
The latest power plant to come on line in Rhode Island was a 265- megawatt plant in Tiverton developed by Energy Management Inc. of North Dartmouth, Mass.
Although New England is one of the most “active” natural gas markets in the country, Kiley said, with natural gas representing 18 percent of the region’s primary energy consumption, it still lags behind the national average of 24 percent.
New England consumes far less coal than the national average and far more oil.
