What single phrase can instantly transform a child’s joy into disappointment when unwrapping a brand new toy? “Batteries not included!”
Consider the products hawked on home shopping channels and infomercials—the ones promised to solve all your problems and offered at an unbeatable price. They seem like steals until you discover hidden expenses that balloon the final bill well beyond the advertised cost. When the item arrives, reality sets in: you use it only a handful of days annually, not daily as the commercial suggested. Calculating the actual cost per usage reveals a dramatically different picture from what marketing promised.
Would such a purchase still qualify as a bargain in retrospect? Would you have bought it at all? The answer hinges on various considerations, not least the alternatives you might have chosen instead.
This dynamic parallels, on a vastly grander scale, the natural gas pipeline proposals garnering significant attention throughout New England. Advocates contend these projects will funnel inexpensive natural gas from Pennsylvania’s Marcellus Shale region into New England, addressing everything from winter supply shortages to year-round electricity costs. Yet here lies the catch: New England state officials propose funding these $5-6 billion projects through rate increases imposed on every homeowner and business across the region for 15-20 years without interruption.
Who bears the financial burden? The consumers themselves. This arrangement eliminates any meaningful incentive to control expenses or limit construction to genuinely necessary infrastructure.
Another troubling question emerges: might these consumer-funded pipelines become export routes for natural gas leaving the country, enriching pipeline companies while those who financed them see no benefit? A recent statement from one proponent acknowledged that New England’s proposed pipeline projects could indeed serve export purposes.
By the time this “cheap gas” reaches consumers’ utility bills, will it remain economical? Can it compete with power plants’ current energy purchases, which include liquefied natural gas supplementing pipeline supplies during frigid winter days? No guarantees exist.
Addressing peak demand during New England’s harshest winter days requires supplemental natural gas—that much is certain. However, shouldn’t a solution targeting only peak demand be preferable to massive, costly pipeline expansion? Why construct and enlarge pipelines to meet demand peaks 30-40 days yearly? It only would if pipeline companies don’t have to assume financial risk, but rather have consumers pay the costs. Natural gas pipelines have historically been financed on a ‘pay as you grow’ basis. Much of the local natural gas demand growth has resulted from natural gas utilities signing on additional heating customers. But this growth is already being accommodated by previously announced incremental pipeline capacity projects that will be placed into service over the next few years. Beyond this, future load growth is uncertain and/or minimal due in large part to renewable energy, conservation, and energy efficiency efforts. In addition, more homes and businesses are choosing to generate their own power rather than purchasing it from a utility, which will further temper future demand.
Before spending consumer dollars on subsidized, overbuilt, and expensive new pipelines, consumers should demand that all existing natural gas infrastructure—pipelines, on and off-shore LNG vaporization facilities, or local utility LNG storage—be fully utilized, and all practical and affordable alternatives brought to bear. The worst-case scenario is that large new pipelines will be built, and they quickly prove to be “white elephants.”
No one possesses foresight about these matters. Crude oil prices collapsed unexpectedly; similarly, future Marcellus shale gas prices remain unknowable, particularly for the coldest days when New Englanders need natural gas most. History shows Pennsylvania gas prices have spiked during harsh winter days—last winter included—matching New England’s experience. Supply and demand drive these spikes: that’s the fundamental reality.
A preferable approach exists: continue supplementing pipeline gas with LNG to meet the 30-40 annual peak demand days. This proves less expensive and disruptive than financing year-round pipeline construction that would burden consumers for decades. The LNG alternative requires no new shipbuilding; New England’s infrastructure already stands ready. All components arrive packaged together—including the batteries.