On Thin Ice

Ah yes, the numbing air and piercing winds of another winter have begun to take form in the Northeast over the last several weeks. Winter is officially almost here, and with it comes all the usual baggage of icy streets, short days, and longer nights. Under the blessings of our “modern day” energy infrastructure, vast swaths of the region are usually unscathed by the brutal cold. 

Energy demand in the winter is always highest on the coldest days or weeks. The laws of physics have enshrined this as given, due to the need to keep our bodies in the temperature range of thermal comfort. For the most part, aside from a 2003 blackout that cost $6 billion and resulted in 96 new reliability standards, the grid in this region has been up to snuff on the worst of days.  

This blackout was quite widespread, affecting a large portion of the eastern seaboard. The action taken immediately following the incident has so far been sufficient. Despite the lack of bumps in the road since, a report published by a research group at Carnegie Mellon following the blackout highlights the risk. And this was in 2008. The paper deemed that many of the patterns and trends, such as “inadequate transmission investment” and “lack of system-wide reliability management” exist and threaten grid stability. Many of these remain true in 2023.

Yet, here we are, two decades later with nothing disastrous to show for it. When twenty years pass, it can be easy to become comfortable again. Time has a remarkable ability to allow one to fall into a state of amnesia. And while all the wounds of 2003 have healed on the surface, the structural similarities to this time period combined with an increasingly turbulent energy landscape in 2023 has facilitated a precarious energy situation. One that’s on thin ice. 

In order to properly assess the risk, it’s important to know what the current state of affairs looks like. New England is currently heavily reliant on natural gas, a cheap and energy dense mixture of gaseous hydrocarbons. It accounts for a huge chunk of the electricity generation, and an even bigger chunk of the heating systems. It is absolutely and undoubtedly critical, yet if one is to look at the map of the gas pipelines, it's easy to think it is a backup source of power.

For those not familiar with the pipeline landscape in the United States, this is objectively poor infrastructure. Especially considering the geographic proximity to one of the most gas dense regions in the nation in Pennsylvania/West Virginia. Below is a photo that nicely stacks up New England to the rest of the country.

According to 2021 figures from ISO New England, the Regional Transmission Organization (RTO) that oversees the bulk of electric power systems and transmission lines, 53% of the electricity used is derived from natural gas. Despite this, not only has the region has shown little willingness to secure its most vital source of energy, the opposite has been done as blocking additional infrastructure investment is now the status quo. 

This includes the canceling of a 2.1 mile, 12-inch natural gas pipeline that would have increased capacity in central Massachusetts as well as the canceling of a license agreement that would have allowed Bristol, VT residents to connect to a nearby gas line.

I would normally applaud this effort to wean off fossil fuels, however, it is driven by a complete lack of interest in the preservation and investment in other reliable forms of clean energy, such as nuclear.

Instead of ramping up investment in the most consistent and energy dense source known to mankind, again, the opposite is being done. Pilgrim Nuclear Power Station was closed in 2019, leaving only Millstone and the Seabrook Nuclear Power Plant in Massachusetts as the only sources of nuclear energy in the region. (Still accounts for 26% of electricity generation though!)

Well, what about other energy generation sources? Renewables such as solar and wind are rarely suitable to support the grid in its most critical moments of harsh winter temperatures. With regards to hydropower, the region seems to be doing everything in its power to remain vulnerable. A Maine jury this summer had to finally intervene and overrule a two-year old vote to block construction of a transmission line in Maine that would bring in hydropower from Quebec (project massively over budget of course, because...America). The people of Maine actively voted against both energy security and clean energy.

Energy blindness has hijacked rational decision making in the region, leaving millions solely reliant on the hydrocarbons that many have fought so vehemently to eliminate.

A huge irony in this dilemma exists in the fact that New England is closing oil and coal plants, and refusing to build pipelines to the most rich natural gas regions in nearby Appalachia, yet a sizable chunk of the region’s energy on its coldest days are sourced from liquified natural gas (LNG) imports. LNG is natural gas that has been cooled down into a liquid state for ease of transport without need for pressurized storage or pipelines. 

The U.S. has had a massive LNG awakening of sorts, going from the single largest importer and a minor player in the export game, to now the single largest exporter in the world. However, due to the perplexing nature of the severely outdated Jones Act, New England can’t tap into the bounties of LNG that our nation produces. The Jones Act, enacted in 1920 to protect the domestic maritime industry, prohibits the movement of ships between U.S. ports by foreign-built vessels. With the U.S. not having built any LNG carriers since at least before 1980, the existing fleet of tankers ensures that it is illegal to ship LNG from any of the many terminals along the Gulf of Mexico to New England. 

The result of this is New England sources all of their LNG from Trinidad & Tobago. Yes, you read that right. The Everett LNG terminal in Massachusetts is currently responsible for 82% of the nation’s imports, and all of it comes from T&T according to the EIA. On the coldest of nights, where LNG imports can make up a third of the region's natural gas supply, New England is highly dependent on diesel-powered tankers lugging LNG around 2,000 nautical miles. Absolutely nuts. To add insult to injury, utilities are also forced buyers in an increasingly competitive spot market due to the Russian invasion of Ukraine amongst other geopolitical happenings. This in return hurts the wallets of constituents across the region. 

The utilities may not have to worry about a competitive spot market for much longer, however, as the shuttering of the Everett LNG terminal looms large in the future. This would sever LNG capacity in the region. Currently scheduled to retire after May 2024, this may be one of a series of death knells to grid stability. 

When access to natural gas gets cut off in New England, the last resort is burning oil, a dirty and carbon intensive energy generation source. With net-zero deadlines approaching closer by the day, the region has clearly become unserious about reducing reliance on hydrocarbons in the depths of winter, or even the burning days of summer. The virtue signaling and support of irrational energy policy decisions have ultimately crumbled the already unstable energy foundation that is our grid. And now, it poses a great barrier to our ability to move to a clean and sustainable economy. 

Too much of a good thing can ultimately blind one from the bad. Delusions created under the warm blanket of energy security over the last several decades have now finally shown up through cracks. And while many of the irrational decisions can be reversed in due course, it may soon be time to clean out the fireplaces. 

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Disclaimer: The views, thoughts, and opinions expressed in this writing belong solely to myself and do not reflect the views of my employer.