US northeast gas utilities stopping new service

Market: Natural gas
27/02/19

Three municipal natural gas utilities in the US northeast have imposed moratoria on new gas service amid a lack of sufficient natural gas pipeline capacity in the region.

Utility Con Edison in January said that after 15 March it would no longer accept applications for new connections in the majority of its service area in Westchester County, New York, because of pipeline constraints. Later that month Holyoke Gas & Electric in Massachusetts said it was unable to accommodate new gas service because of a lack of availability in the region. And Middleborough Gas & Electric in Massachusetts said this month it would stop accepting requests for new natural gas service, also because of a lack of capacity.

Pipeline constraints in the region even prompted a state emergency response in Rhode Island last month. Utility National Grid on 21 January had to stop gas deliveries to about 7,100 customers in Newport and Middletown because of low linepack on Algonquin Gas Transmission amid high demand upstream. Temperatures there fell to as low as 2°F (-17°C) that night, causing state governor Gina Raimondo to declare an emergency and bring in the National Guard to assist.

Demand for natural gas is outpacing availability, Con Edison said in its moratorium announcement. Those sentiments echo comments made by midstream company Enbridge this month. Chief executive Al Monaco said demand for more capacity in the region is on the rise, while pipeline constraints result in consumers "paying through the nose" for higher-priced peaking supply from oil generation and LNG imports.

"It's never been more clear that we need additional natural gas infrastructure, and nowhere is that more evident than in the US northeast," Monaco said.

But new pipeline development faces an uphill battle in the region, which is a veritable graveyard of projects that have stalled or were cancelled amid environmental opposition, regulatory hurdles and a lack of consistent funding. Progress on Enbridge's own 984mn cf/d (27.8mn m³/d) Access Northeast pipeline halted in June 2017 with the company saying gaps in regional energy policy prevented it from garnering enough funding to operate year-round, instead of just when demand spikes in the wintertime.

Pipeline developers have had some success shepherding brownfield expansions with a limited footprint through the regulatory process. But state environmental agencies have denied key permits for large-scale lines in the region, including the 1 Bcf/d PennEast pipeline, the 628mn cf/d Constitution pipeline and the 500mn cf/d Northern Access pipeline, leaving those projects in regulatory limbo.

Holyoke Gas & Electric said it receives its gas from Tennessee Gas pipeline's Northampton Lateral, which has become severely constrained because of a "dramatic increase in demand over the last two decades." Middleborough Gas & Electric said the interstate natural gas pipeline that feeds its territory" has been at capacity for some time." Con Edison said it would pursue "non-pipeline solutions" to demand through clean energy technology.

Last month the New York Department of Public Service said it would review natural gas supply and demand in Westchester County to determine the changing market conditions that gave rise to Con Edison's moratorium there and develop recommendations.

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21/11/24

Cost of government support for fossil fuels still high

London, 21 November (Argus) — The cost of government measures to support the consumption and production of fossil fuels dropped by almost a third last year as energy prices declined from record highs in 2022, according to a new report published today by the OECD. But the level of fiscal support remained higher than the historical average despite government pledges to reduce carbon emissions. In an analysis of 82 economies, data from the OECD and the IEA found that government support for fossil fuels fell to an estimated $1.1 trillion in 2023 from $1.6 trillion a year earlier. Although energy prices were lower last year than in 2022, countries maintained various fiscal measures to both stimulate fossil fuel production and reduce the burden of high energy costs for consumers, the OECD said. The measures are in the form of direct payments by governments to individual recipients, tax concessions and price support. The latter includes "direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates", the OECD said. These government interventions come at a large financial cost and increase carbon emissions, undermining the net-zero transition, the report said. Of the estimated $1.1 trillion of support, direct transfers and tax concessions accounted for $514.1bn, up from $503.7bn in 2022. Transfers amounted to $269.8bn, making them more costly than tax concessions of $244.3bn. Some 90pc of the transfers were to support consumption by households and companies, the rest was to support producers. The residential sector benefited from a 22pc increase from a year earlier, and support to manufacturers and industry increased by 14pc. But the majority of fuel consumption measures are untargeted, and support largely does not land where it is needed, the OECD said. The "under-pricing" of fossil fuels amounted to $616.4bn last year, around half of the 2022 level, the report said. "Benchmark prices (based on energy supply costs) eased, particularly for natural gas, thereby decreasing the difference between the subsidised end-user prices and the benchmark prices," it said. In terms of individual fossil fuels, the fiscal cost of support for coal fell the most, to $27.7bn in 2023 from $43.5bn a year earlier. The cost of support for natural gas has grown steadily in recent years, amounting to $343bn last year compared with $144bn in 2018. The upward trend is explained by its characterisation as a transition fuel and the disruption of Russian pipeline supplies to Europe, the report said. By Alejandro Moreano and Tim van Gardingen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Investment funds’ net long on Ice TTF reaches new high

21/11/24

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21/11/24

Investment funds’ net long on Ice TTF reaches new high

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Cop: Talks in Baku torn between mitigation and finance

21/11/24

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21/11/24

Cop: Talks in Baku torn between mitigation and finance

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Cop: EU, four countries commit to 1.5°C climate plans

21/11/24

News

21/11/24

Cop: EU, four countries commit to 1.5°C climate plans

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LNG diversions to Europe reach double digits

19/11/24

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19/11/24

LNG diversions to Europe reach double digits

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