America is the Saudi Arabia of Natural Gas, but not in the Northeast

U.S. gas production rose to a record of more than 37 trillion cubic feet last year, up 44% from a decade earlier. Yet the infrastructure needed to move gas around the country hasn’t kept up. Pipelines aren’t in the right places, and when they are, they’re usually decades old and often too small.

Earlier this year my family dealt with the consequences of the age and lack of natural gas infrastructure in America in a direct way. We, and thousands of other residents of Newport and Middletown, Rhode Island, suffered a natural gas outage in the coldest week of winter. Here’s what I wrote then:

Your Survival Guy: Out of Gas in Newport

You may have read that Newport, RI lost natural gas service Monday, impacting 7,000 customers and approximately 10,000 people.

It’s reported that a single faulty valve froze at National Grid’s distribution center dozens of miles north in Weymouth, Massachusetts, causing the system’s pressure to drop significantly.

Newport is located at the end of this gas line system, making it most vulnerable to a loss in pressure.

Imagine your head being Weymouth and your foot being Newport and you get the idea.

Monday morning was bitter cold at zero degrees, with a windchill that had a real feel of about negative twenty. It looked like smoke was rising from the ocean as the warmer water evaporated into the brutally cold air.

Note to self: Now it makes sense that an army of National Grid trucks were on their way into Newport.

The high demand for gas to heat residents, combined with a loss of pressure in Weymouth, and perhaps the explosion in Ohio (see below) hours later created a perfect storm.

A precipitous drop in gas line pressure can cause furnace pilot lights to go out. If gas pressure is restored and the pilot is out, houses fill with gas, not heat. That’s why National Grid shut down gas to Newport while other areas upstream maintained enough pressure to continue running. With no gas in Newport, and no heat Monday as temps dipped into single digits, it made for a long night as Governor Raimondo declared a state of emergency.

And now for the fix:

The gas valve for every home needs to be individually turned off by about 1,000 National Grid workers and sub-contractors. Then pressure can be brought back into the lines. Pressure can’t be added safely while the gas line is still open into your home with pilots out.  Even auto-lighting pilots are at risk since they’ve probably been stopped out and need to be reset (according to my new technician friend at the Grid).

Now from various sources we’ve been told it will take two days to shut off the valves, and then another few days for a technician to go back to each house to help you get your furnace up and running. I don’t doubt the time estimate here, but I also sense some of the higher ups are managing expectations.

Some of my quick takeaways.

Note to self: Make sure you have enough firewood for the fireplace so you don’t have to drive to pick up more—even though the mist from the ocean was very pretty at sunrise.

Also: Call National Grid. I spoke with two extremely helpful reps. One at the call center who was more than happy to give a field worker my cell phone number to call when he was on my property. There is never any downside to being nice in a disaster when emotions are raw. He called to let me know he shut off the gas and will let the technician know to call me when they’re ready to turn it back on so I can meet him.

Do this: Have a network of contacts. They’re called friends and family for a reason.

Power outages are a lot easier than natural gas outages.

Houses that use oil for heat: For everyone in Newport who has oil has heat, it might not be a bad idea to keep it if you’ve been considering changing to natural gas.

I’ll continue letting you know what I’ve learned. One more tidbit: Rhode Island’s gas lines are the second oldest in the nation. I’m not comfortable with this.

P.S. There was a 30-inch natural gas line explosion Monday morning at 11:30 in Summerfield, OH on the Texas Eastern Gas Line owned by Enbridge which feeds to the Algonquin Gas Transmission which feeds to the northeast. This could have been the straw that broke the camel’s back, but results from an investigation won’t come out for at least six months or mid to late July when this will be a distant memory for many.

P.P.S. To say we have a pipeline problem is a vast understatement. Shortages of pipeline capacity in the U.S. oil patch could put upward pressure on global oil prices as the main source of growth in world oil supply is curtailed. John Kemp reports for Reuters:

U.S. oil production is running into capacity constraints, which are starting to have a material impact on the global availability of crude, causing the market to tighten and putting upward pressure on prices.

The biggest problem is the lack of sufficient pipeline capacity to move oil from shale wells in western Texas and eastern New Mexico to refineries in the Midwest and export terminals on the Gulf Coast.

But production in the Permian Basin has also been constrained by shortages of labour, equipment and materials, which have pushed drilling, pressure pumping and completion costs sharply higher.

P.P.P.S. How can a frozen valve even be remotely involved with a disruption of natural gas service needed to heat homes across New England? Aren’t they sort of in the heating business? Duh.

Your Survival Guy: Out of Gas in Newport Day 4

Newport, RI has no natural gas, and the inside of homes here are hovering in the low to mid 40s. This has been National Grid’s second largest gas outage since Hurricane Sandy. And what’s odd is that it was supposedly created by a spike in demand and a faulty valve. If you’re in the heating business, wouldn’t you be ready for spikes in demand in the winter and make sure valves are in working order? Plus, there was no disruption to our electricity, and according to BU Professor Nathan Philips, regional policy dictates gas must go to heating needs before it gets to power generators.

“I’m not buying Enbridge’s explanation until more facts are known,” said Phillips. “We have had cold snaps as bad or worse over the last few years without such a system-level failure.”

From The Projo:

Greg Cunningham, vice president of the Conservation Law Foundation, was also skeptical. Utilities like National Grid plan their system needs years in advance and tie up contracts for supply and space on pipelines to guarantee they can meet customer demand, he said. Those plans, which factor in days of extreme cold and periods of extended cold, must then be vetted by regulators, such as the Rhode Island Public Utilities Commission.

“Yes it’s been cold, but it hasn’t been that cold and it hasn’t been that cold for that long,” said Cunningham, an environmental lawyer. “This idea that a few cold days in January have triggered some issue with their gas supply just doesn’t make sense.”

In its statement that attributed the outage to higher demand, Enbridge acknowledged that a “temporary reduction in available natural gas supply exacerbated the conditions that led to this disruption in service,” but did not explain the cause of the reduction. The company has not responded to repeated attempts to clarify its statement.

It’s hard to say whether one malfunctioning valve could have caused the situation, until more is known about its type, size and location, said Don Deaver, owner of Deatech Consulting in Texas. Cold weather could be a factor in system problems if demand increases so much that more gas is being pushed through a pipeline and forces up pressures, he said.

“When you have high amounts of gas, the velocities can cause turbulence and chatter and mechanical problems in a valve,” he said.

Mark McDonald, president of NatGas Consulting in Massachusetts, questioned why other areas didn’t feel any impacts if there was a larger transmission supply problem. He said that National Grid must bear some responsibility for the situation.

Still, Bob Ackley, owner of Gas Safety Inc. in Massachusetts, said that it’s widely known in the industry that Aquidneck Island is a place with poor supply because it has only one link to the distribution network and because of its location at the very end of a branch line that runs off the main Algonquin trunk, which brings gas to New England from the Midwest and the South.

Providence and other parts of Rhode Island are not only supplied by lines with higher pressure, they also have multiple links to the system, which, said Ackley, could explain why no other areas suffered severe drops in pressure. National Grid cited the same reasons for why a similar event somewhere else is highly unlikely.

Ackley said that if a single valve is found to be the culprit, it shows a serious problem with the gas system.

“If you’re going to rely on this, you can’t put thousands of people at risk with no alternative,” he said.

Your Survival Guy: Out of Gas in Newport Day 5 (and 5 to go)

Good Morning. Today is day five of no natural gas service in Newport, RI. After a mild yet stormy day yesterday with temps in the low 50s, this morning is sunny with temps in the low to mid 30s.

It’s hard to believe a mechanical issue could be the culprit of this man-made disaster. And that’s what it is. Because the United States is the Saudi Arabia of oil and natural gas. Take a look at the Marcellus formation in PA and you can see that it’s the lack of pipelines that are keeping Newport in the cold. The thin and narrow pipeline capacity that feeds natural gas to the Northeast is like sipping on a straw from a swimming pool.

And yet everyone touts the windmills and solar that don’t work in tandem on a calm day like today, or a cloudy one like yesterday. And politicians talk about green energy initiatives to garner more votes while energy efficient windows do nothing to heat homes.

As of Friday, we are still in the shutoff phase, where each gas connection to homes needs to be turned off. Most of the approx. 6,400 gas meters have been shutoff, but around 200 remain. These are the tough ones. To lawfully gain access when nobody’s home, for example, a rep from National Grid is aided by a locksmith and watched by a police officer. This takes time. The forecast is calling for colder weather.

Once the meters are off, National Grid will re-pressurize the Newport system. Then licensed technicians (by law) must go house to house to relight the furnace of every home. We were told last night by Governor Raimondo this could take five to six more days.

The last major natural gas outage that was man-made was in New Mexico in 2011, it knocked 30,000 out of the grid. It was a low pressurization problem with a faulty valve (frozen) much like this one. After months of investigation and hand-wringing, it turned out that protocols put in place from a similar event years earlier where not followed. And if you read the hearings from the task force of politicians and officials, it’s full of thank yous and drama, but light on solutions. When government’s involved, only acronyms take the blame.

Looking forward it’s hard to see how a lack of pipeline capacity, an antiquated system and aging infrastructure get fixed in a clean energy world. Once upon a time, natural gas was clean. The way things feel today, natural gas is the new coal and if they can’t stop the fracking they’ll do their best to take away the (paper) straws.

Your Survival Guy: Out of Gas in Newport: 80% back on the Grid

Happy Monday Morning, it’s good to be back on the grid with natural gas service restored to 80% of Newport customers. If you were at your home this weekend, then you had several opportunities to intercept a National Grid truck/crew to turn on your gas. I’m guessing the final 20% are vacation homes etc. and could take longer, but the worst is over.

This was a unique outage. There are three towns comprising Aquidneck Island: Newport, Middletown, and Portsmouth. Newport had 6,400 outages (not all homes/hotels were impacted because they pull from a different gas line), Middletown 350. If you had friends or family in one of these towns or had a hotel room, you had a place to go.

But, had this been an island-wide emergency, I believe our best course of action would have been to evacuate off island. A natural gas outage is a different problem than a power outage. When there’s no gas, it’s extremely difficult to operate comfortably with space heaters and no hot water. Food would be harder to come by at some point as all business would be impacted. Then there’s the problem of who’s going to watch your house if you leave. Not an easy problem to solve.

A few things to keep in mind.

• Always have enough water and food to last at least a few days.
• Have cash on hand in case you need to evacuate. It saves you from having to stop at an ATM, and cash is quick to use in any transaction.
• Always keep your cars full of gasoline.

You just don’t know what you’ll need to do until the problem is resolved. There’s never any downside to being prepared.

Your Survival Guy: Out of Gas in Newport, Now What?

Now that Newport, RI is back on the natural gas grid, I want to share with you a conversation I had with an owner of a successful natural gas operation. He said that the problem basically comes down to the fact that the green movement is spending the money and has politicians in its back-pocket. The utilities aren’t spending the money for political messaging.

As a result, what consumers end up with is a grid that’s woefully antiquated, as was witnessed firsthand last week in Newport, RI.

It’s too easy for elected officials to follow a Pied Piper like Al Gore and an aggressive, well-funded green movement at the expense of the silent majority who need reliability, not dreams.

Here’s yet another story of Al Gore sticking taxpayers with the energy bill:

Political leaders in a college town in central Texas won wide praise from former Vice President Al Gore and the larger Green Movement when they decided to go “100 percent renewable” seven years ago. Now, however, they are on the defensive over electricity costs that have their residents paying more than $1,000 per household in higher electricity charges over the last four years.

That’s right – $1,219 per household in higher electricity costs for the 71,000 residents of Georgetown, Texas, all thanks to the decision of its Republican mayor, Dale Ross, to launch a bold plan to shift the city’s municipal utility to 100 percent renewable power in 2012 when he was on the city council.

In short order, Ross was elevated to celebrity status, appearing in scores of articles and videos, both at home and abroad. Al Gore made it a point to feature the Texas Republican mayor at renewable energy conferences as well. Ross was even featured in one of Gore’s documentaries.

But while Ross was being lauded far and wide, the residents of his town were paying a steep price. His decision to bet on renewables resulted in the city budget getting dinged by a total of $29.8 million in the four years from 2015 to 2018. Georgetown’s electric costs were $3.5 million over budget in 2015, ballooning to $6.3 million in 2016, the same year the mayor locked his municipal utility into 20- and 25-year wind and solar energy contracts to make good on his 100 percent renewable pledge.

By 2017, the mayor’s green gamble was undercut by the cheap natural gas prices brought about by the revolution in high-tech fracking. Power that year cost the city’s budget $9.5 million more than expected, rising to $10.5 million last year, according to budget documents reported by The Williamson County Sun.

Whether Mayor Ross and his colleagues on the Georgetown City Council were motivated by good intentions, political machinations, or mere vanity is unknown. What is known is that Georgetown’s municipal utility, an integral part of the city budget, is hemorrhaging red ink thanks to those long term renewable energy contracts.

The deficits were triggered by the drop in natural gas prices—now the mainstay of the U.S. electric grid, having displaced coal—which caused the city to sell its surplus wind and solar power at a steep discount into Texas’ wholesale energy market. City leaders had to lock in a large excess of wind and solar power to be able to lend credibility to their 100 percent renewable claim, since wind and solar power can’t be relied on to keep the lights on 24/7/365. And, even with that surplus, there are times when Georgetown draws traditional fossil fuel power from the Texas grid, making the city’s “100 percent renewable” claim nothing more than spurious sloganeering.

That a city in Texas (which voted for President Trump) claimed to be “100 percent renewable” generated significant “man bites dog” notoriety. But as University of Houston energy expert Charles McConnell noted, “It’s not kind of misleading, it’s very misleading, and it is for political gain.”

Most Texas residents have the ability to choose their electricity provider in a competitive statewide market, leading to electricity prices that are among the lowest in the nation: 18 percent below the national average in 2018, and 48 percent below prices in green energy pacesetter California.

But Texas’ electricity market excludes municipal utilities like Georgetown’s from competition, leaving consumers without choice and allowing political decisions – rather than market forces – to determine the mix of electricity suppliers.

Georgetown is now trying to renegotiate its costly long-term wind and solar energy contracts—this, after the city council agreed to skimp on needed electric infrastructure investment to make up their budgetary shortfall.

Mayor Ross had previously reveled in trolling President Trump, boasting to a German TV show that, “I make decisions based on facts… unlike the president,” then opining that “It was a huge mistake to withdraw from the Paris climate accords…”

One wonders what Mayor Ross thinks about the ongoing unrest in France, initially sparked by a climate change fuel tax hike that has since been rescinded, under pressure, by President Macron.

The mayor, who not long ago was approaching ubiquitous status with the media, could not be found by the local press to comment on his city’s budget-busting power deficit, declining to comment by both phone and email.

Meanwhile, Texas legislators – who are unlikely to wind up on German TV – have the power to introduce a  bill with the potential to free Georgetown’s ratepayers from the city’s electric monopoly, giving them the same ability to shop around for electricity now enjoyed by some 20 million of their fellow Texans.

Wonder what Al Gore will have to say about that?

Preventing the Next Natural Gas Outage

I’ve been writing to you lately about the gas outage in Newport, Rhode Island that my family and 7,000 others suffered during the cold snap last week. Needless to say, losing heat and hot water in the winter is an uncomfortable experience at best. Thanks to the support of a solid network of friends and family, my family was able to endure the outage, but many residents had it rough.

In Minnesota, residents are in the grip of the Polar Vortex, and extreme low temperatures are causing them to draw on their natural gas supplies at a rapid pace. Xcel Energy, the area’s utility company, is sounding the alarm, asking residents to reduce their consumption of natural gas to keep enough in the system for everyone to maintain some level of heat. CBS Minnesota reports:

Xcel Energy is advising residents in parts of central Minnesota north of the metro to turn down their thermostats and reduce their natural gas use.

According to the energy provider, the extreme weather conditions have resulted in a “significant” strain on Xcel Energy’s natural gas system.

“We need those in Becker, Big Lake, Chisago City, Lindstrom, Princeton, and Isanti to reduce use of natural gas. Until further notice, you are urged to turn down your thermostat to 60 degrees or lower and avoid the use of natural gas appliances including hot water,” Xcel Energy said.

WCCO’s Reg Chapman said shortly before noon Wednesday that Xcel Energy is asking customers to lower thermostat to 55 degrees.

Xcel Energy says residents’ cooperation is critical to prevent widespread natural gas outages. The company also suggests using electric space heaters.

An interruption in the natural gas system occurred on Tuesday around 10:30 p.m. in Princeton. Xcel says about 150 customers are without gas service in Princeton. Xcel Energy says they anticipate gas to be back on Thursday.

Impacted customers have been provided hotel rooms while Xcel Energy works to restore service. The utility is also providing affected customers with space heaters.

Green Dreams and Gas Nightmares in the Northeast

There’s an ocean of natural gas in Pennsylvania’s Marcellus Shale formation, but you wouldn’t know it based on the paltry natural gas infrastructure running from the area into the nearby population centers of the Northeast. Despite troves of cheap natural gas only a short way away over land, 20% of New England’s natural gas is delivered via expensive liquefied natural gas (LNG) shipments to Boston’s Everett LNG terminal. Freight Waves, an industry journal, reports that in Westchester County, New York, nearly on top of the Marcellus Shale play itself:

Con Edison (ED: NYSE), a New York utility provider, announced on January 18 a moratorium on new natural gas customers in Westchester County, beginning on March 15. The reason given by the utility was “new demand for gas is reaching the limits of the current supplies to our service area.” Politico reported that New York State’s reluctance to construct new natural gas pipelines is preventing adequate supplies from reaching growing economic centers in New York City, Long Island and Yonkers.

But in New England, things are even worse. Politicians have mandated a shift away from coal, placing the burden of the region’s energy production on natural gas. Those same politicians however, have prevented any new supplies of gas from getting to the region via pipeline. Freight Waves reports:

“The New England states used to be dependent on coal, oil, nuclear and hydroelectricity,” said Dan Kish, senior fellow at the Institute for Energy Research. “And they’ve shifted quickly to natural gas for generation, and they’ve shifted so fast that its caused huge draws of natural gas into the system [pipelines] without increasing infrastructure.”

Kish said that the United States is the world’s largest producer of natural gas and has among the lowest natural gas prices, especially in regions where natural gas is produced. He blamed the lack of supply in New England on political opposition to the use of fossil fuels.

Instead, New England’s politicians have spent their time endorsing “green energy.” Despite promises that such ventures would be sustainable, they have proven themselves anything but. The Wall Street Journal reports on the failed wind turbines of Falmouth, Massachusetts, writing:

In 2009 and 2011, Falmouth broke ground on two wind turbines on 314 acres of city land next to the wastewater-treatment facility and dog pound. It paid for the first turbine with a $5 million, 20-year municipal bond, and it received $5 million in federal stimulus money to build the second. Falmouth planned to sell some of the energy it generated to the electrical grid of utility company Eversource, formerly known as NStar, so the city anticipated the turbines would generate $1 million to $2 million in annual profit.

Residents quickly grew disillusioned. The turbines rose nearly 400 feet, and light flickered eerily through the blades, which whirled in a circle big enough for a 747. Barry and Diane Funfar, who lived fewer than 1,700 feet away, began suffering from headaches.

Ms. Funfar struggled to sleep, and her husband’s heart started to pound. “The problems were unbelievable,” Ms. Funfar says. “Barry couldn’t live with them. He was bothered every minute [the turbines] were running. I was bothered, too.”

The couple built their home themselves in 1979, and their adult children live nearby, so they didn’t want to leave. Mr. Funfar complained to the city, and he was “no lone voice crying in the wilderness,” according to court records. The Funfars sued, as did other residents who reported hearing “thunderous and thumping” noises and feeling “powerful pulses, which are characteristic of low-frequency sound.” A real-estate appraiser testified that homes close to the turbines had lost 20% of their value.

In 2015 the Massachusetts Appeals Court ordered Falmouth to turn off one of its turbines, ruling that it lacked proper permitting. And in 2017 Barnstable County Judge Cornelius Moriarty ordered both turbines shut down as a public nuisance. “We had our home paid for before the turbines, and now we owe more than it’s probably even worth—over $500,000,” Ms. Funfar says. “We wanted to leave it to our kids, but if we died today, our kids couldn’t afford the home.”

Falmouth is taking a “daunting” financial hit, says town manager Julian Suso. Insurance covered most of Falmouth’s legal fees and nuisance settlements, but the remaining liability is “certainly in excess of $100,000,” he says. On Jan. 15, selectmen voted 4-1 against relocating the turbines within town limits, with one abstention. It will cost between $1 million and $2 million to dismantle and remove them.

Falmouth’s turbine fiasco isn’t an isolated incident. Other New England towns have faced hard realities after spending scarce taxpayer resources on green dreams (see here and here for two such examples). The residents of Cape Cod were lucky enough to avoid plans to develop offshore wind there before they got started.

I have written to you lately of the recent natural gas outage in Newport, Rhode Island. Tim Horan, President of National Grid’s Rhode Island operation said of the outage, “This appears to be a lack of gas transmission supply to our system.” This isn’t the first time in recent years that low supply in the New England natural gas grid has caused problems. Last year, New England’s power grid, powered mostly by natural gas, was straining as natural gas was diverted to feed demand for heating during a cold snap. VPR reported then:

Gordon van Welie, head of ISO New England, has said for a while now the Northeast has a natural gas problem.

On the coldest days, lots of natural gas gets diverted to heat homes. For power plants, that means high spot prices and less fuel to make electricity.

In a report released last week, ISO New England mentions “rolling blackouts” if the future grid is unable to meet winter demand. That statement was met with divergent reactions from several energy and advocacy groups.

“We’re very close to the edge in New England,” van Welie told lawmakers. “We need to find a way of relieving this constraint one way or another. Either through investment in the pipeline infrastructure, or continued investments in other sources of energy that will take the pressure off the gas pipeline, or reducing demand on the system.”

Van Welie told senators in 2013 more gas pipes were needed to solve the problem.

Several attempts to do that failed, and today, van Welie said expanded capacity is unlikely to happen in the near future.

Click to enlarge.

You can see on the map to the right that New England has retired major sources of energy without replacing them with other options. Planned expansions to pipelines in the region haven’t happened, and no new capacity has been existed. Without increased natural gas infrastructure in New England, problems are likely to persist.