Brad Kane
Leaders of the American and Canadian energy industry urged the six New England states to take a regional, holistic approach to energy and environmental policy, similar to the plan under review in Connecticut.
For Connecticut, Massachusetts, and the rest of the New England states to lower their energy costs and increase their environmental commitment, they need to — as a group — evaluate the growing resource demand and decide which types of fuel for home heating, power generation, and transportation work best for the region, according to the participants at the U.S./Canada Energy Trade & Technology Conference Nov. 2 in Boston.
"Energy is in the industry to get the economy back on track," said Karen Alderman Harbert, chief executive officer for the U.S. Chamber of Commerce's Institute for 21st Century Energy in Washington, D.C. "We are going to be relying on the same sources of energy we use today for quite a bit of time."
The attendees and speakers were strongly supportive of expanding the use of natural gas from American shale formations for home heating and transportation in New England. They chided the recent federal decision to block the construction of the Keystone XL pipeline to bring oil from Canadian tar sands into America.
Bringing American shale gas and Canadian tar sand oil to New England would greatly decrease the region's reliance on foreign resources and lower energy costs in the region, said Glenn Zacher, partner, with Canadian law firm Stikeman Elliott.
"The trick is how to deliver that supply to market," Zacher said.
With shale gas, for example, New England doesn't have large access to the resources in the Midwest and West because the region doesn't have the proper transmission structure, said Richard Paglia, vice president for marketing at Texas- based Spectra Energy, which has proposed a pipeline to New England. The transmission companies need commitment from the region to increase their natural gas use, because the pipelines cannot be built on speculation.
"Without building the infrastructure to de-bottleneck these supply constraints, we will continue to be at an energy disadvantage," Paglia said.
Connecticut took a leap toward natural gas commitment in October when Gov. Dannel P. Malloy unveiled the state's comprehensive energy strategy. The plan focuses on having cleaner, cheaper, and more reliable energy sources in Connecticut. It advocates a $6.7 billion expansion of the natural gas distribution system to lower home heating costs, and including Canadian hydropower as a renewable source of energy to decrease electricity costs.
This policy will help Connecticut bring in the resources necessary to make its energy cleaner, cheaper, and more reliable, said James Robb, senior vice president for enterprise planning for Hartford-based Northeast Utilities. It shows companies such as Spectra that Connecticut has a commitment to natural gas.
"It is a real chicken and egg problem," Robb said. "You can't build in small increments for every customer that comes along."
New England as a whole could use a similar agreed upon strategy to develop and use energy resources, Robb said. The six different states have different legislative and regulatory bodies, and the policies differ and can change from year-to-year.
Texas, a state with 10 million more people than all six New England states combined, was successful in proliferating the use of retail electricity suppliers — instead of having utilities supply electricity — because it used the force of its size and didn't waver from its commitment to its goal, Robb said.
Committing to policies that lower energy costs such as retail energy suppliers and natural gas ultimately provides for a cleaner global environment, said Gaëtan Thomas, president and CEO of New Brunswick, Canada, utility NB Power.
When energy prices rise in a region — New England has the highest electricity rates of an American region — businesses will outsource their work to places with lower costs. This growth in places with less commitment to the environment causes total greenhouse gas emissions to increase, having a larger impact on the environment, Thomas said.
This outsourcing also has a negative impact on the economy, Thomas said. As China and the American South increase production, their energy costs will rise as demand rises, causing an increase in the price of goods and services globally.
New England and Canada need a well-rounded energy policy that factors both renewables and fossil fuels to make cleaner and cheaper energy, Thomas said.
In order to support the development of renewable technologies while not burdening ratepayers with the costs of subsidies, New England states should remove the mandatory renewable energy charges on customers' bills, said Badar Khan, president of Pennsylvania electric retail supplier Direct EnergyUpstream. The burden should be shifted to the electric retail supply industry, where customers can choose to buy power directly from renewable installations.
"Change should be driven by end customers," Khan said. "Long-term, sustainable growth comes from customer demand."