New England is at a crossroad in its energy planning decision-making. The last time the region faced such critical decisions about investment in infrastructure sure to affect issues of reliability, costs and the environment was the 1980s over the future of nuclear power.
In moving away from conventional fossil-fueled generation, there are many questions and crucial facts to be considered besides costs. Chief among them is timing and the ability to operationally integrate such resources into the grid. This will take time. So, we must have a plan during the transition to ensure reliability at reasonable cost to consumers.
Pivotal to determining this transition plan is the assessment of the need for additional natural gas pipeline capacity. The myriad of studies on this issue and the visceral nature of the debate is reminiscent of the nuclear days of the early 80s. All of the gas studies have had dramatically different results and implications – from zero need to 2.2B/bcf. I cut my teeth in the energy industry during the nuclear plant abandonment cases. One of the lessons learned from that era that we could apply to today’s debate is to recognize circumstances that change during the debate and assess whether these changes warrant a change in commonly held assumptions.
For example, in the early 80s, as utilities plowed blindly into the nuclear construction era, they failed to recognize the permanency of the dramatic drop-off in load growth, the failure of oil to hit $100 per barrel as assumed in their economic analysis, the post-TMI (Three Mile Island) cost escalation and political fallout from TMI and the beginnings of the concept of conservation.
The justification for completion of projects became an incremental cost justification – building them is cheaper than building something else or abandoning the construction. There was a steadfast refusal to consider alternatives. A clear case of quagmire decision-making.
Are we doing that again with respect to gas pipeline expansion? Can the commonly held beliefs about the need for more gas stand up to the recent developments with respect to the glut of LNG and continued low cost oil? Are these facts game-changers or just temporal distractions from a path to long term solutions? Can we rely on these opportunities long enough to get us to these alternative resources without large scale expansion of gas pipeline capacity?
As we make these important considerations, let us not forget the lessons of the not-too-distant past and let us not make the same mistakes again.