The Shocking Russian "Collusion" of Massachusetts' LNG Imports from the Russian Arctic Enabled by Those Against Domestic Pipelines: Clear Environmental and Climate Hypocrisy

The Shocking Russian “Collusion” of Massachusetts’ LNG Imports from the Russian Arctic Enabled by Those Against Domestic Pipelines: Clear Environmental and Climate Hypocrisy

OK the collusion part is rather indirect and an attention-grabbing headline but it is true that Everett LNG import terminal near Boston, Mass has taken a couple shipments of LNG, part of which has come from the Yamal export terminal in the Russian Arctic, a project in which the majority shareholder is actually under sanctions by the U.S. in response to Russian aggression in the Ukraine.

One might ask the question: Why does Massachusetts need LNG from Russia, Qatar (some of the gas from those shipments also likely came from Qatar), and other countries when there is a huge gas field a few hundred miles away with so much excess gas that the price is very cheap compared to the global market? Well the answer is simple: lack of gas pipeline infrastructure to supply the gas to the New England region where 50% of electricity is produced by natural gas. In the future new gas power plants are slated to be built and more coal, fuel oil, and nuclear plants are slated to be retired so that by 2024 the issue of serious lack of natural gas availability is expected by system operator ISO New England to be a major problem resulting in high consumer electricity prices and possibly rolling blackouts. They also note that they barely escaped rolling blackouts this year during the polar vortex cold spells. Luckily they were saved by switching to burning fuel oil in the dual-fuel plants that can burn both gas and oil and the LNG shipments. However, at one point they were dangerously low on oil supplies. They were also dangerously close to air pollution emissions limits from burning the oil. New York governor Andrew Cuomo is also to blame since he and his state environmental review people have for years routinely blocked pipelines slated to go through his state – which is a necessity for the New England states since New York has them landlocked.

Quoted from the Boston Globe article referenced below:

“To build the new $27 billion gas export plant on the Arctic Ocean that now keeps the lights on in Massachusetts, Russian firms bored wells into fragile permafrost; blasted a new international airport into a pristine landscape of reindeer, polar bears, and walrus; dredged the spawning grounds of the endangered Siberian sturgeon in the Gulf of Ob to accommodate large ships; and commissioned a fleet of 1,000-foot icebreaking tankers likely to kill seals and disrupt whale habitat as they shuttle cargoes of super-cooled gas bound for Asia, Europe, and Everett.”

In terms of environmental performance the Environmental Performance Index has the U.S. in the top tier (top 15%) while Russia is near the bottom. NIMBYism is big in the U.S. northeast with significant resistance to local fossil fuel projects compared to the rest of the country. Gavin Law of energy analysis firm Wood MacKenzie notes that LNG has 5-10% more carbon emissions in its life cycle than pipeline gas mainly due to the energy expended in liquifying and then re-gasifying but it is unclear whether that includes shipping it from the other side of the world - since most LNG tankers burn onboard LNG for fuel. LNG shipments are best shipped as locally as possible. Oddly enough, it is illegal to ship gas from U.S. export facilities to U.S. import facilities due to the 1920 Jones Act which cites where the ships are made and what nationality are the crews – “none of the world’s fleet of almost 500 tankers meets the requirements of the 1920 Jones Act, which mandates that vessels moving between U.S. ports be built and registered in the country and be crewed by Americans.” That seems a little bizarre to many people.

Since the excess greenhouse gas emissions are not produced within the northeastern states’ borders they don’t appear in their accounting and this is of course a deception. This is important because the main reason cited for denying pipeline infrastructure is carbon emissions. A recent energy bill in Massachusetts has continued to inexplicably maintain that pipelines are not necessary and sees winter-only global LNG shipments as fine. They hope to build new renewable capacity, including some offshore wind and bring more Canadian hydro-power via new transmission lines but these projects will take years and it is unclear if they would even offset the plant retirements.

Also from the Boston Globe article are some words from Obama Energy Secretary Ernest Moniz:

“Natural gas has shown itself to be an important bridge to a clean energy future,” said Ernest J. Moniz, the former secretary of energy in the Obama administration. “For New England, expanding the pipeline capacity from the Marcellus” — the area of shale gas production in Pennsylvania — “makes the most sense.”

“Life cycle emissions for LNG imports to Boston certainly are higher than they would be for more Marcellus gas,” he said.

Nearby New Jersey (not officially a part of New England) has also been facing difficulty and opposition getting the Penn East Pipeline built. They fortunately are not landlocked by New York but they are subjected to winter price spikes due to lack of pipeline capacity. The pipeline offers hope of mitigating spiking winter prices and of lower overall pollution and carbon emissions

Meanwhile, no one has really explained why a Russian company under sanctions has been able to sell their product, LNG, on the U.S. market. One uncertainty is that the Russian gas was first delivered to European LNG storage tanks where it is mixed with other gas from places like Qatar, Algeria, and Trinidad and taken from there on a different ship to the U.S. Apparently, such a scenario allows them to duck the sanctions – so the question is why have sanctions if they can be worked around?

References:

Our Russian ‘Pipeline’ and Its Ugly Toll – by Editorial Board, in The Boston Globe, Feb. 13, 2018

Why the U.S. is Buying Natural Gas from Russia: Quick Take Q and A – By Rob Verdonck and Anna Shiryaevskaya, (Bloomberg QuickTake), in Washington Post, Jan. 22. 2018

Letter: Penn East Pipeline Means Lower Energy Costs for NJ – by Michael Drulis, in Mycentraljersey.com, Feb. 19, 2018

New ISO-NE report warns fuel supply could harm reliability – by Peter Maloney, in Utility Dive, Feb. 14, 2018