Intelligence brief: ISO New England laments pipeline constraints; Green light for three Florida projects
Gas industry news you need to know
ISO New England laments pipeline constraints
Natural gas has come to dominate New England electricity generation, but pipeline constraints mean consumers cannot reap the year-round benefit of low-cost natural gas, ISO New England CEO Gordon van Welie said his State of the Grid 2016 speech.
The share of natural gas in electricity generation rose to 49% in 2015 from just 15% in 2000. During the same period, oil’s share of generation fell from 22% to 2%, and coal’s fell from 18% to 4%. Nuclear remained relatively steady at 30%, as did hydro and other renewables at 15%.
“Coal- and oil-fired resources rarely operate any more. They’re typically called on to run only during the summer when electricity demand is highest, and in the winter when natural gas pipelines are constrained or spiking natural-gas prices make them more economical. Because they rarely run, they rarely get paid in the energy market, and that’s a major driver of generator retirements in New England,” van Welie said.
The solution, he said, is additional energy infrastructure, including natural gas infrastructure to meet growing demand for natural gas for both heating and power generation.
When demand for gas is high and natural-gas pipelines are constrained, wholesale prices can increase dramatically, van Welie explained. At unconstrained times, he said, prices at ISO New England’s Algonquin City Gate average $26.86/MWh versus Midcontinent ISO Chicago City Gate prices of $28.78/MWh. But in the peak of winter it can hit $76.64/MWh in New England, compared to $29.31/MWh in Chicago.
ISO New England is the regional transmission organization serving Massachusetts, Connecticut, Rhode Island, New Hampshire, Vermont and Maine.
With natural gas the primary fuel used to produce electricity in New England, it typicallys set the price for wholesale electricity (Source: ICE / ISO New England)
Green light for three Florida pipelines
The Federal Energy Regulatory Commission has approved three separate but connected natural-gas transmission pipelines in Florida and the south-eastern United States.
In total, the projects will involve the construction and operation of about 685.5 miles of pipeline and 339,400 hp of compression to provide transportation services for up to 1.1 billion cubic feet per day of natural gas.
The upstream project, Transco’s Hillabee Expansion Project, will create capacity for Sabal Trail’s customers to access upstream natural gas supplies. The middle project, the Sabal Trail Project, will extend from an interconnect with Transco’s system at the Tallapoosa Interconnection in Tallapoosa County, Alabama, to an interconnect with the downstream project, the Florida Southeast Project, near Intercession City, Florida. The Florida Southeast Project will extend to a delivery point with Florida Power & Light at its Martin Clean Energy Center near Indiantown, Florida.
Some opponents of the pipelines had alleged that they would be used to export gas, but the FERC said in its finding that the applicants had demonstrated sufficient domestic demand for their projects.
“Ninety-three percent of the total design capacity of the Sabal Trail project is subscribed under precedent agreements with initial terms of 25 years,” it said. “This is persuasive evidence of market need for this project. Even though the market, in its consideration of alternative means for addressing energy needs, could have selected renewable energy alternatives and energy efficiency gains, we find that the precedent agreements sufficiently demonstrate the need for the project.
After California leak, operators urged to take more care
The US Pipeline and Hazardous Materials Safety Administration (PHMSA) has called on operators to tighten their safety procedures in order to avoid a repeat of the recent leak that saw a state of emergency declared in California.
The PHMSA’s 12-point advisory reminded operators to identify potential leaks and failures caused by corrosion, chemical damage, mechanical damage, or other material deficiencies in piping, tubing, casing, valves, and associated facilities.
Recommendations included: periodic inspections of the wellhead assembly and attached pipelines for each of the wells used in an underground storage facility; periodic functional tests of all surface and subsurface safety valve systems and wellhead pipeline isolation valves for proper function and ability to shutoff or isolate the well as required for operational and emergency situations; and monitoring of all wells for the presence of annular gas or liquids.
Southern California Gas Company’s Aliso Canyon Well SS25 failed on October 23, causing an uncontrolled natural-gas leak in the Porter Ranch area on the northern outskirts of Los Angeles. More than 4,400 households have been relocated due to the natural gas odorant, and a relief well is being drilled to plug the leak, which is believed to have come from the subsurface well casing. The Aliso Canyon underground storage field can store up to 86 billion cubic feet of natural gas and is the second-largest storage facility of its kind in the United States, according to the PHMSA.