“The Polar Vortex is Coming”: Fracked Gas’ clarion call to build more pipelines.

During the winter of 2013–2014, the Northeastern United States was plunged into a deep freeze due to a seemingly rarified weather pattern known as the ‘Polar Vortex’. In the short half decade since, the phenomenon has become increasingly familiar, punctuating relatively mild winters with short-lived yet drastic deep freezes. Even as the science behind increasing climate instability that is driving these events is well documented, that doesn’t stop the gas industry from extorting this extreme weather for all its fear-inducing value in order to push more pipelines.

2019 Polar Vortex event across northeast | Source: Photojournal JPL/NASA.

Like clockwork, each season’s impending polar vortex delivers a new series of invectives against policy makers and their ‘keep it in the ground’ constituents to ‘lift the blockage’ against pipelines and unleash the power of the nearby Marcellus Shale to ‘warm the homes’, ‘feed the factories’ and ‘fire the power plants’ of the northeast region.

Collection of Headlines from recent years related to the Polar Vortex & the domestic push for pipelines in the northeast region | Various Sources.

While the circuitous irony of ever more pipeline inducing ever more GHG emissions — which in turn deliver ever more climate instability, which in turn deliver ever more polar vortex events— may seem absurdly obvious to anyone reading beyond headlines, exposing more subtle market conditions and regulatory regimes frustrating pipeline development takes a bit more work to manifest. Three accessible avenues to a fuller disclosure of fracked gas’ plight across the northeast region are available:

  • Historical price data analysis of northeastern Regional Transmission Organizations (RTOs)
  • Mapping and tracking of existing delivery infrastructures
  • Review of annual regulatory disclosures by northeastern RTOs and industry market materials

Historical price data analysis:

Undeniably, ‘modern’ gas development — aka ‘fracking’ — has been swift, determined and monumental in scale in virtually every shale play and resulting market across the nation.

Sources: Homeland Infrastructure Foundation-Level Data (HIFLD) + U.S. Energy Information Administration | Mapped by Author.

However, underlining price trends have been anything but impressive. In aggregate, the result is clearly evident at Henry Hub: shale gas pricing is at least stuck, if not slumping year-upon-year, at 2.5 dollars +- MMBtu.

Data Source: U.S. Energy Information Administration | Mapped by Author.
Source: eia.gov

This depressive plateau in the ‘upstream’ market (near well heads) is due to a myriad of factors playing out across various geographic and temporal scales. For the dense, coastal urban regions that typify the northeast, final price arbiters are end uses predominately behind ‘city gates’ such as local distribution companies (LDC’s), and increasingly, combined-cycle, base-load shale gas plants dotting the eastern seaboard. Here is where prices are disaggregated to the individual RTOs or ISOs — Independent System Operators. In the northeast, its New York’s NYISO; New England’s ISO-New England and the Mid-Atlantic’s PJM (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia).

Source: Homeland Infrastructure Foundation-Level Data (HIFLD) | Mapped by Author.

The three northeast ISO regions as mapped above are spatially consistent with the brunt of repeating polar vortex events. By analyzing historical price data held at each ISO, the exact days and hours marked by plunging temperatures coupled with surging wholesale electricity prices can be analyzed, offering a proxy of ‘downstream’ gas price movements as noted by U.S. Energy Information Administration:

Wholesale electricity prices are closely tied to wholesale natural gas prices in all but the center of the country.

The following 3-panel graphs and statistics for the full year baseline of 2013–2014 shows concurrent patterns throughout all three northeast ISO regions. Important to note here is the consistent but relatively short-lived ‘spikes’ in pricing during the ‘deep winter’ months when the polar vortex events occurred during the 2013–2014 period.

PJM — Day Ahead Pricing — 2013 2014 | Data Access via PJM Data Miner 2 | Chart by Author.
NYISO — Day Ahead Pricing — 2013 2014 | Data Access via NYISO custom reports | Chart by Author.
NE-ISO — Day Ahead Pricing 2013–2014 | Data Access via ISO — NE Reports | Chart by Author.

The next chart and statistic panels compare the 2017–18 season across all three ISO zones. Besides the consistent price shape, important to note here is the decreasing mean and median as well as the significant decrease in max price compared to the 2013–2014 season. This is largely due to the sustained downward pressure across all gas pricing hubs — the price of shale gas has been steeply discounted in intervening years since the 2013–2014 baseline season.

3 Northeast ISOs 2017–2018 Day Ahead Pricing | Chart by Author.
3 Northeast ISOs 2017–2018 Day Ahead Pricing Statistics | Analysis by Author.

A final series of graph panels below — a subset of the current 2018–2019 season dating November 2018 to March 2019 — disaggregates daily price points showing in detail the pricing ‘spikes’ concurrent with polar vortex events. What is also evident is price stabilization (or actual decreases) immediately before and after the events. This data view underscores the fact that extreme weather events are highly isolated relative to pricing; that is, long-term effects on actual pricing are negligible at best.

PJM Day Ahead ‘Deep Winter’ Season — blue dots = price recording + magenta line = smoothed data curve | Chart by Author.
NYISO Day Ahead ‘Deep Winter’ Season — blue dots = price recording + magenta line = smoothed data curve | Chart by Author.
ISO-NE Day Ahead ‘Deep Winter’ Season — blue dots = price recording + magenta line = smoothed data curve | Chart by Author.

Mapping and tracking of existing delivery infrastructures:

As demonstrated in the preceding data analysis, pricing trends are concurrent across all three northeastern ISOs. When ‘spikes’ do occur, they are short-lived and quickly rebound to, or even below, mean price points — which are themselves trending downward due to price depression across all nationwide hubs. While the ‘Polar Vortex is Coming’ is indeed a scientific fact of increasingly frequency, over time its impact on the northeastern regional grids is becoming both shortened and diminished. This finding is consistent with a 2015 analysis report by Skipping Stone for the Conservation Law Foundation which typified the problem in New England as one of ‘deliverability’, not ‘pipeline capacity’, i.e. building more pipelines to increase generalized capacity on a 365-days-a-year basis. As stated:

This is so because any pipeline capacity needed for such short time periods must be built (to have a big enough pipeline) and then purchased (as the result of pipeline regulation and economics) on a 365-days-a-year basis. As a result, a significant percentage of the capacity within any pipeline built to handle such peak demand spikes will only be used for a few days each year. Consequently, “pipeline capacity” is not the core metric for LDCs. Instead, gas “deliverability”, the ability of a gas company to meet its customers’ needs at a given location at a given time, is the critical factor.

The ‘deep winter’ constraint around ‘deliverability’ (approximately 50 discrete days from mid-December to mid-March) as noted by the study can be — indeed is year after year — solved quietly and easily in New England by a discounted tactic — liquified natural gas (LNG). A further qualification — imported LNG, not exported LNG, explains the enthusiasm gap: while the domestic gas industry frenetically pursues the export of LNG as ‘Freedom Gas’, by comparison, the import of LNG is both global and established.

In New England, the diminutive scale of this ‘deliverability’ solution relative to expansive northeastern pipeline buildouts is underscored by a singular LNG terminal in Boston Harbor, located upriver on the Mystic River, utilized to met regional ‘deep winter’ constraint. This facility — The Everett Marine Terminal, also known as the Distrigas Terminal (shown below) — is the longest-operating LNG import facility of its kind in the United States. The facility has connections with two interstate pipeline systems, as well as a local gas utility’s distribution system.

As LNG production and transportation has become a fully globalized and integrated market, recently the Distrigas Terminal began accepting shipments originating from none other than Russia. The first shipment by the Gaselys tanker, January 28th, 2018, originated at an LNG facility on the Yamal Peninsula, Russia. As expected, domestic pipeline pushers used the specter of this ‘russian pipeline’ as a severe indictment of the state’s inward-looking environmental and climate policies allegedly responsible for the inability to site domestic pipelines outwards from the Marcellus Shale.

ENGIE (Distigas) SA Everett import terminal | Google Earth Imagery, 2019.
Distigas Terminal LNG Vessel Traffic — December 2018 — March 2019 | Source: Sentinel Hub, False Color Imagery.

Further south in New York City harbor, the saga of pipeline deliverability vs capacity is playing out in real time over the Oklahoma-based Williams’ Northeast Supply Enhancement pipeline project (NSEP). Nearly concurrent with both New York and New Jersey State permit denials for the project, National Grid in NYC and Long Island, as well as Con Edison north of the city in Westchester County have threatened ‘gas moratoriums’. In the case of National Grid, the LDC states that unless the NSEP is built, they will fall short of a 14% capacity increase allegedly required for ‘midsize customers’:

National Grid announced in February that it had put 35 large customers on notice about a potential moratorium on new gas service, informing them of its inability to supply “firm” gas service to planned projects such as the redevelopment of Belmont Park. The new notifications to midsize customers — those with businesses of around 15,000 square feet — is the latest move by the company to highlight the need for the new pipeline.

What these threatening moratoriums fail to acknowledge is the core problem ascertained by the CLF report — ‘deliverability’ vs ‘capacity’ — specifically those few days in ‘deep winter’ that are then prescribed on a 365-days-a-year basis from pipeline operator to LDC to customer. The binary structure of the moratoriums — ‘do this or else’ — precludes any discussion of alternative methods to address ‘deliverability’ not for the majority of days-a-year that are easily serviced, but specifically ‘deep winter’ days.

Further missing from the impending moratoriums is the acknowledgement that current gas service grids in the New York region are mature and fully serviced. In effect, the NSEP would be designed implicitly for a proposed growth scenario, not existing service and infrastructure. Without grounding the problem as one of specific deliverability issues, during specific times, within specific geographies (growth expansions) and specific use types (midsize companies), the public is left with the impression that all gas service is potentially at risk of failure if certain mainline, interstate projects are not successful.

Con Edison New York Region Distribution System | Source: Long Range Plan 2019–2038.

Regulatory disclosures by northeastern RTOs:

As the gas industry deploys implacable PR tactics to bully the public, a very different tone is maintained year after year across northeastern ISO regions. In particular, both NYSIO and ISO-NE issue yearly regulatory outlook reports — the ‘Power Trends Report’ and the ‘REO’, respectively. While both reports indeed highlight the obvious impacts of weather constraints, the larger message is not build more pipelines at all costs but appropriate planning for an increasingly complex, varied yet resilient grid. Underscoring tempered optimism is unavoidable flat or decreasing domestic demand trends. These downward trends are largely due to innovations in the grid, both energy savings programs as well as ‘behind-the-meter’ power generation. As seen in the following graph and chart, 2019 short-term capacity is easily met in the NYISO region, and outwards to at least 10 years exists a downward demand trend.

May 1, 2019 — April 30, 2020 NYISO Required vs Available demand/capability | Source: 2019 Power Trends.
New York Baseline Energy and Demand Forecasts outwards to 2029 | Source: 2019 Gold Book.

Even as consumers within the northeastern region are lead to believe in the inevitability of evermore demand and thus evermore pipelines, industry insiders are aware downward regional demand poses a significant threat to infrastructure expansion. As stated in the 2015 CLF report:

They [industry interests] are aware of New England’s low load factor and that the region only needs the extra capacity some 50 days a year and, as a result,
producers do not see the economics of a New England supply-push pipeline working for them. Producers evaluate pipeline projects from a “cost–of-use” perspective, and the cost to support a year-round project to meet a highly seasonal demand is not a “good bet” for those with other, better alternatives.

Culled from a recent industry slide deck, the following chart graphic shows just how ‘behind’ the northeast region has fallen from just a few ‘high demand’ states now driving the narrow bulk of domestic demand.

Source: S&P Global Platts — Northeast LDC Gas Forum

This slumping demand coupled with persistent upstream glut is an untenable condition for robust industrial expansion. As ever, a proximate marcellus shale and eastern seaboard vexed by increasingly frequent polar vortex events, remains a powerful narrative ploy proven to deliver pipeline projects. Commingled with newly minted ‘Freedom Gas’ sloganeering, the ‘Polar Vortex is Coming’ trope may prove durable beyond just pipelines to connect emerging coastal LNG ports and vast storage facilities as the new ‘national security’ imperative. Taken together, these narrative framings are both spatially congruent and reciprocal in extending the reach of shale gas infrastructure throughout the Northeast — even as they are utterly incompatible with regional ratepayer interests and damning to the very survivability of the global commons.

Reference List:

How Climate Change May Affect Winter “Weather Whiplash”

New York — Indian Point shutdown and the rise of shale gas

Natural Gas — Middle Ground — Vox

PA’s Gas Power Problem

Canada — cost of pipeline constraints (Oil)

What Happen’s When You Don’t Build Pipelines

Amid Deep Freeze, New Englanders Can ‘Thank’ N.Y. Gov. Cuomo For Their High Energy Bills

Natural Gas Demand Hits Record As Cold Bomb Targets Northeast

New England’s Known Need For More Natural Gas Pipelines

Steep discounts on this ‘forgotten commodity’ is costing Canada $23 million a day

Natural Gas Proves Reliable and Resilient During Polar Vortex

Americans Need More Oil and Natural Gas Pipelines

US Northeast midstream sector urged to fight back to lift gas project efforts

In bitter cold, gas barge off Massachusetts helped keep down New England energy prices

The Energy Industry’s Secret Campaign to Get Us to Build More Power Plants

Freedom Gas will be used to Justify Oppression at Home and Abroad

Skipping Stone — Solving New England’s Gas Deliverability Problem Using LNG Storage and Market Incentives

ISO — New England January 2019 update

2018 NYISO Gold Book

NYISO — Reliability and a Greener Grid — Power Trends 2019

Price of gas — factors, eia.gov

Capacity Withholding — New England

Gas — Long Range Plan — Con Edison

Natural Gas Assessment — New York State Energy Plan 2009

ISO-NE Natural Gas Infrastructure Constraints

PJM- Data Miner 2

ISO-NE Energy, Load, and Demand Reports

Natural Gas Market Hubs (geospatial data)

Stephen Metts is a GIS analyst and instructor based in New York State. His research interests covered in this article include the development, transport and constraints of shale gas infrastructure; climate science, change and adaption; and applied data visualization for the energy sector.

GIS Analyst & Instructor | Shale Gas Impacts, Environmental Justice & Climate Change Issues

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