America is the world’s largest natural-gas producer, but New Englanders’ capacity to stay warm in winter may hinge on the fate of an expensive, 53-year-old import plant that its owner has threatened to shut down.
Constellation Energy plans to retire a Massachusetts power plant at the end of May. That will eliminate the biggest user of the liquefied natural gas, or LNG, that is imported through the company’s neighboring Everett Marine Terminal. Constellation said it is trying to line up new gas buyers to keep the terminal running. If it cannot, it will likely close the import facility as well.
But New England utilities rely on imported LNG to keep them supplied in winter when demand peaks. Without it, severe cold could leave them, and their customers, in a bind, the utilities have said in public hearings and in letters to regulators.
The situation on the Mystic River shows that despite 25 years since the first shale well was fracked in Texas, the benefits of the American drilling boom remain unevenly distributed. Swaths of the country are flooded with cheap gas, and export facilities have cropped up to sell the excess overseas. Other areas, including New England, are bereft of fuel and pay up for energy.
New England residents paid about 43% more for natural gas in the first quarter of 2023 than the U.S. average, according to the Energy Information Administration.
Weaning off those supplies without shortages during the coldest days is also emblematic of the challenges involved in a smooth transition from fossil fuels to renewable energy.
National Grid, which has more than two million gas customers in Massachusetts and New York, feeds fuel from Everett into its pipelines around Boston and also trucks it to storage tanks across the region ahead of each winter, said James Holodak Jr., the utility’s vice president of energy supply.
“We don’t see any other near-term plausible solution in the event that Everett closes if gas demand does not decline as drastically as some may anticipate,” Holodak told federal regulators at a hearing last year.
A big issue is how to cover the terminal’s overhead, most of which is currently recouped through New England electricity bills tied to the nearby power plant.
Constellation said it would close the Mystic Generating Station at the May 31 expiration of that deal with regulators, a two-year agreement intended to bolster the region’s energy supplies.
Regulators point to a December 2022 incident as an example of why utilities need quick access to reserves of natural gas. A winter storm caused demand to surge. Gas wells in Appalachia froze and pressure dropped dangerously low on the Consolidated Edison’s pipeline system around New York City. The utility tapped its own LNG reserves to stave off damage that could have knocked out service and taken months to repair.
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