Posted by Carl Gustin, Coalition Spokesperson
More than 167,000 permanent and temporary jobs could be lost or forgone over the next five years if sufficient new energy infrastructure is not built to meet New England’s need for more affordable energy. That’s according to a recent study by the economic consulting team of LaCapra Associates and Economic Development Research Group, which was commissioned by the New England Coaliton for Affordable Energy.
Who gets hit by those job losses? Certainly the construction industry is hit hard, accounting for nearly one-half of those losses from underinvestment. Other sectors hit hard by not investing include manufacturing, retail trade and even health care and social assistance. Sectors hit hardest as a result of the resulting higher energy prices include retail trade, wholesale trade, transportation, financial services, education and, of course, construction. According to the study, those job losses reflect a $12.5 billion reduction in disposable personal income.
These are real job losses effecting real consumers and real businesses. And it comes during a prolonged period during which household incomes have not budged and thousands of employees have stopped looking for work.
Despite clear and compelling evidence that additional natural gas supplies, new transmission lines and new electric generation from traditional and renewable sources would help to lower costs, making energy more affordable, opposition to many projects remains intense. Much of that opposition reflects tensions between those who advocate for one form of energy over a more balanced, all-resource strategy. Such an all-resource strategy would provide flexibility, recognizing that transitions in markets characterized by large capital investments take time – usually decades – and instead of favoring either the environment or the economy, it would balance both.
New England has the resources to take such an approach – lower cost natural gas to the west, hydropower to the north, vast amounts of on-shore wind energy in remote areas and offshore wind off the southern coast. And it will continue its aggressive pursuit of energy efficiency and solar energy.
One of the latest examples of the more narrow approach comes from the Conservation Law Foundation. CLF once had a strong influence on energy policy as an advocate for a cleaner environment, lower costs and a stronger economy.
A decade ago CLF advocated for natural gas as the fuel of choice for new power plants. Its advocacy was influential in energy restructuring legislation that led to a dramatic increase in the number of plants operated by natural gas and more stable prices. The demand for natural gas skyrocketed. Today, 50 percent of New England generation is powered by natural gas, compared to just 15 percent in 2000. CLF’s argument was that natural gas was less costly and cleaner and would help combat global warming. In 1999, CLF’s Richard Kennelly noted in a Boston Globe story that “gas is very good news in terms of regional air quality.” New gas plants totaling more than 5,000 megawatts of power are operating or under construction around the region, Kennelly said, with as many as 12,000 additional megawatts ‘significantly advanced’ in government permit proceedings.”
Unfortunately, pipeline capacity did not keep pace with that growth. Instead of reaping the benefits of stable, low cost gas to the west, New England has been exposed to price volatility resulting from pipeline constraints. That led New England’s governors, other public officials, consumers, and businesses throughout the region to grow increasingly concerned about the affordability of energy. Businesses are threatening to locate outside the region and consumers, already strained by household incomes that have not grown in years, increasingly have to make payment arrangement with utilities.
Instead of advocating for the fuel that powers the plants they once favored, CLF now advocates for renewable energy virtually at the expense of all other sources. Instead of a balanced diet and integrated approach, CLF seems to have a singular focus on renewables that under any scenario are disadvantaged if consumers and companies gain access to lower priced gas.
While renewables – solar and wind – are still a small part of the region’s generation, their success has and will continue to place greater demand on natural gas generation at a minimum to back up the intermittent generation from renewables. CLF acknowledges this but that seems to be the extent of support.
It is important for energy planners and policy makers to recognize that between 10 and 20 percent of the region’s older power plants are at risk of shutting down and will need to be replaced. That’s on top of the 10 percent already scheduled to be shuttered in the next few years for economic and environemental reasons.
Wind and solar can’t replace that much capacity, and certainly not in the foreseeable future. Nor can even the most aggressive energy efficiency programs. Only natural gas will replace those units as they retire.
So what is CLF doing today? Fighting expansion of natural gas pipelines that would bring down prices to make energy more affordable for those low and middle income families who have not seen incomes rise in years.
Its argument: That energy storage and distributed solar, coupled with LNG, can meet the region’s needs – even this winter.
The LaCapra/EDRG study makes clear that additional natural gas supplies would provide year-round benefits. Other information makes clear that imports of LNG from places such Trinidad and Yemen, while an important resource, cannot meet power generation needs throughout the region – and its pricing is tied to world markets.
CLF has become an advocate for renewable energy at the expense of more traditional forms of energy including the vast amounts of low cost natural gas discovered in this country in recent years. It’s unfortunate because CLF once played a constructive role in framing energy policies more broadly.
We need only be reminded that in 1999, CLF’s then-president Doug Foy and his co-author David Marshall hailed industry restructuring and the introduction of competition when they wrote in the Boston Globe that “We can cut demand and increase supply….This is one of those rare moments in which the forces of economics and environmentalism are in alignment.”
Maybe now in 2015, we have another one of those rare moments. We should not let it pass.
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