In response to high-heating costs in New England, we’ve seen the annual debate about increased funding for federal subsidies in the form of the LIHEAP program which did indeed receive additional funding in the just-completed omnibus bill.
Meanwhile, another response has been a repeat of the Venezuelan-Joe Kennedy program to provide low-cost heating oil from Citgo. It’s highly effective socialist propaganda from America’s avowed enemy, Hugo Chavez.
A more effective, long-term approach would be to address the out-of-balance supply-and-demand equation in natural gas — a key heating fuel in the northeast — by increasing access to LNG. It’s an obvious point, but one that bears constant repeating, especially given the dedicated opposition to LNG projects from the red-herring mongers.
The South Coast Today (Mass.) newspaper carried a valuable op-ed today from Gordon Shearer, president and CEO of Hess LNG, owner of Weaver’s Cove Energy, which has proposed building an LNG terminal in Fall River.
This past August, ISO-New England, which operates the region’s power grid, issued its latest long-term market assessment. ISO-NE’s forecast showed that high natural gas prices would cost New England’s electricity consumers $10 billion a year, or more than double what they would be with low gas prices. This was the bottom line, true no matter how hard we conserve or move to adopt alternative energy technologies. This region depends on natural gas to generate 40 percent of its electricity today, and 80 percent of proposed new plants are also gas-fired.
For years, energy experts and policymakers have been warning about the decline of North American natural gas supplies in the face of growing consumption. Absent new supplies, prices will remain high or even go higher. There is almost a uniform consensus that we must turn to liquefied natural gas (LNG) imports to heat and light our homes. And the closer we can import that LNG to the areas where we use it, the lower the price will be and the more consumers will benefit. While we all agree that we need more natural gas, we cannot agree on the best way to bring it here.
Weaver’s Cove Energy has proposed to invest over $500 million to build an LNG terminal in Fall River. We looked at dozens of sites throughout New England, and determined that Fall River offered the best mix of ingredients needed for a successful LNG terminal: a deep-water port, proximity to the natural gas pipeline system, and a site large enough to meet or exceed federally mandated safety measures.
Shearer refutes the (often lame) arguments against the project, noting that the Federal Energy Regulatory Commission has found Fall River acceptable.
New England and Massachusetts are in desperate need of more energy supplies if the area wants to continue economic growth. The alternatives — more federal subsidies, giving political victories to Hugo Chavez, and long-term economic decline — are dangerous in their own right.
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