Report Says Mass. Needs More Natural Gas

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How will new administration respond?

A new report indicates that Massachusetts will need more natural gas supply, even if demand is reduced and more renewable energy is added to the mix.

Former Gov. Deval Patrick, who left office last month following the election of Republican Charlie Baker, requested the report to address complex questions about energy demand and natural gas supply. While leaders from the business and utility spheres were calling loudly for natural gas capacity expansion in recent years, environmentalists and clean technology advocates were raising objections. Environmental advocacy groups such as the Conservation Law Foundation (CLF) claim that New England can meet its power needs by curbing demand and incorporating renewables, and that natural gas expansion would undermine renewable energy initiatives.

The latest report, by Synapse Energy Economics Inc., of Cambridge, Mass., is entitled Massachusetts Low Gas Demand Analysis: Final Report. It examines natural gas demand in eight different scenarios ranging from a “base case” to a “low demand case,” in which demand decreases and hydropower electricity is imported from Quebec. In every case, natural gas demand exceeds supply until 2020. After 2020, demand also exceeds supply in several scenarios.

With a less liberal administration in place and this new report in hand, Massachusetts could re-ignite the regional initiative to place a tariff on electric rates to help subsidize natural gas pipeline construction. Five of the six New England states approved the plan in 2014, but Massachusetts balked, stating that it was unclear whether the region could reduce its natural gas demand by improving energy efficiency and increasing renewable energy supplies.

Michael Ferrante, President of the Massachusetts Energy Marketers Association (MEMA), said the report contained no surprises. “We’ve been aware that natural gas supplies are constrained and that the electric utilities have had to pay for expensive natural gas,” he said. He noted that there has been “a bit of a tidal shift” in how environmentalists view natural gas. Methane leaks are increasingly being seen as a significant environmental problem, and environmental advocates are speaking publicly about natural gas expansion being an impediment to the development of more renewable energy supplies.

Ferrante said he is optimistic that the administration of Charlie Baker will be more favorably disposed to working with the Oilheat industry than the Patrick administration was.  “I believe his approach is more balanced, and he will take a more open approach regarding the value of our fuel and what we have done with it,” he said.

Massachusetts looked like a Bioheat® fuel leader in 2006 when the state passed the nation’s first Bioheat mandate, but the Patrick administration derailed the initiative by declaring Bioheat usage voluntary. Since then, the Oilheat industry has succeeded in securing clean fuel mandates in most Northeast states calling for ultra low sulfur heating oil and Bioheat blends.

“Baker is more business-friendly, especially with regard to small business, but time will tell,” Ferrante added.

Baker last month filled three key energy posts in his administration. Robert Haydon will serve as Commissioner of the Department of Public Utilities. Angela O’Connor will chair the Department of Public Utilities. And Ron Gerwatowski will serve as Assistant Secretary to Matthew Beaton, Baker’s Secretary of the Executive Office of Energy and Environmental Affairs.

The new appointees have some notable industry experience. O’Connor founded the New England Power Generators Association and served as its chairperson for six year. She also served as vice president of energy policy at Associated Industries of Massachusetts. Gerwatowski is a former senior vice president for regulation and pricing at National Grid.

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