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Study: Lack of energy infrastructure would cripple New England

A study funded by trade groups representing the oil and natural gas industries is predicting dire consequences for New England if the region doesn’t improve its energy infrastructure by the end of the current decade.

The 68-page report released Thursday was prepared for the New England Coalition for Affordable Energy, a Boston-based advocacy group. But it was sponsored by two energy trade groups, the American Petroleum Institute and America’s Natural Gas Alliance.

The report predicts that homes and businesses across the region could collectively pay $5.4 billion more than what they are paying now for energy costs. It also claims the region could be facing 167,000 jobs lost or not created as a result of higher energy costs.

The combination of higher energy costs and lost jobs would reduce the amount of disposable income available to New England by more than $12 billion.

Alvaro Pereira, principal consultant at La Capra Associates, one of the study’s authors, said in a conference call that the report examined “multiple types of infrastructure to reduce energy costs including natural gas pipelines, electricity transmission lines, renewable and non-renewable electricity generation.”

“We looked at that and compared it with the cost impact of continuing to rely on existing infrastructure,” Pereira said.

Carl Gustin, spokesman for the New England Coalition for Affordable Energy, said the high level of employment loss being predicted in the study would be “caused by the combination of higher energy costs and the loss of additional infrastructure investment.”

Gustin insisted that the fact that the funding for the study came from two trade groups whose members might benefit from the construction of energy infrastructure “has not had any influence on the outcome.”

“It’s an objective economic analysis,” he said.

In related news, Energy Transfer bidding for Magnum Hunter stake in pipeline unit.

Officials with Eversource Energy, which is part of both an electric transmission line project and an expansion of existing natural gas pipelines in New England, said in a statement that the results of the study are “not surprising.”

“In the last two years alone, we have seen the tremendous market impact of a volatile natural gas supply, with billions added to the seasonal cost of wholesale energy and rate increases for customers across New England,” the statement read in part.

Eversource is a major partner in the Access Northeast natural gas transmission pipeline expansion plan, along with Spectra Energy and National Grid. Hartford-based Eversource has also proposed the Northern Pass electric transmission line project to bring hydro-electric power from Canada.

“Access Northeast presents the most sensible solution to New England’s natural gas constraints, supplying more than 60 percent of the region’s power plants with the fuel they need to meet peak demand,” Eversource officials said in the statement. “Because this project expands the existing Maritimes & Northeast and Algonquin Gas transmission lines, there is minimal environmental and social impact from construction and operation of the project.”

Joel Gordes, a West Hartford-based energy consultant, questioned the conclusions reached in the study.

“The year 2020 is only 4 1/2 years away, so that seems to be a very large amount of money given the time frame,” Gordes said regarding the economic impact. “And my sense is that this report is viewing things in economic isolation, without taking account other factors going on in the national and world economies.”

Gordes recalled that less than a decade ago, the energy industry proposed creating a floating terminal in the middle of Long Island Sound, where liquefied natural gas would be offloaded from ships and transferred to transmission pipelines. The so-called Broadwater Energy facility would have been 10 miles south of New Haven.

But amid protests from resident in both Connecticut and New York State, New York Gov. David Paterson rejected the Broadwater plan outright in April 2008. Gordes said dire predictions then about what would happen to energy costs in New England if Broadwater was not built failed to materialize.

“Energy is very complex and though we try to make predictions about it, we’ve done a crappy job of it,” he said. “Broadwater was supposed to be the save-all because they were going to use cheap (liquefied natural gas). Than we start getting natural gas from shale and all the Broadwater talk went away.”

This article was written by Luther Turmelle from New Haven Register, Conn. and was legally licensed through the NewsCred publisher network.

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