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NEW ENGLAND’S IN TROUBLE: Power sector officials and utility heads in the Northeast foresee another pricey and precarious winter ahead for New England, with the foremost worry being the region’s ability to procure adequate fuel supplies when more is needed to combat extreme cold weather.

State regulators, gas and electric executives, and leadership of grid operator ISO New England shared their thoughts at the Federal Energy Regulatory Commission-hosted New England Winter Gas-Electric Forum yesterday, where the need to quickly develop an “insurance” plan for the winter — including ordering liquefied natural gas shipments to supplement fuel supplies during peak demand — became a central theme across the four panels of testimony.

Who said what: James Daly, vice president of energy supply for electric and gas utility Eversource Energy, which serves parts of Connecticut, Massachusetts and New Hampshire, told FERC’s commissioners frankly that “fuel is the problem” for the region.

“It's because there isn't enough capacity available on the interstate pipelines on extreme cold winter days other than for the heating load,” Danly said. In other words, infrastructure limitations preclude the transport of larger volumes where gas demand increases.

Prices this winter are going up 60-100% over what they were last winter, he said. Note that gas and electricity prices already were exceptionally high during periods of last winter.

With the war in Ukraine, conditions now are even more volatile than this time last year, Daly noted. Winter natural gas futures on New England’s Algonquin citygate benchmark have seen trading in the $30-$40 range per MMBtu this summer. Algonquin spot prices are currently in the $7 per MMBtu range, for the sake of comparison.

Daly and other participants spoke to the need to bring LNG to the region to be on standby for extreme cold.

“We need LNG on the peak cold winter days, and this is what a lot of this conversation has been about,” he said. “We need LNG for power generation because there's nothing else available on the pipes.”

Richard Paglia, vice president of marketing and business development for Enbridge, said the sector’s “hands are tied” in the short term where fuel supply is concerned.

“We don't have a lot of tools left in the toolbox in the short term, at least on the gas side. LNG, making sure we have adequate supply, is about it,” Paglia said.

A perennial problem for New England: New England’s pipeline constraints and fuel supply issues are well established. The region had the second-most interstate natural gas pipeline capacity additions last year, according to the Energy Information Administration. But officials across parties have agreed that New England needs more arteries to improve system reliability and minimize the threat of extreme cold-driven blackouts of the sort that led to the deaths of more than 200 people in Texas in February 2021.

At the same time, proposed interstate pipelines have faced challenges from environmental groups and some Democrats, such as former New York Gov. Andrew Cuomo, who blocked permitting for pipelines that would bring gas into New England.

The prospect of allowing more shipments of LNG into New England by easing enforcement of the Jones Act, too, has proved controversial in recent years – and caused a significant rift among advisers to President Donald Trump.

Part of the larger story: In February of this year, New England’s tight supply conditions triggered a campaign, led by mostly Democratic senators who serve New England states, hoping to convince the Biden Energy Department to restrict U.S. liquefied natural gas exports and in a bid to lower prices domestically.

Remember: That occured before the war in Ukraine began, and before the administration committed to facilitating more LNG shipments to allies in Europe, so that issue could well arise again.

Jim Robb, president and CEO of the North American Electric Reliability Corporation, wrapped New England’s outlook into the context of NERC’s broader reliability assessments that have been a focus all summer.

New England is “at the tip of the spear” when it comes to winter reliability issues, Robb said yesterday, but its lot is not altogether different than that which grid operators in California, Texas, and the Midwest are trying to manage right now.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

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BERNIE TAKES ON MANCHIN-SCHUMER PERMITTING DEAL: Sen. Bernie Sanders went on a tear yesterday against the permitting deal between colleague Joe Manchin and Majority Leader Chuck Schumer, setting the tone for this intra-coalition battle over a deal that’s being slammed by liberal activists as a propping up of the oil and gas industry.

The Senate “has a fundamental choice to make,” Sanders said on the Senate floor. “We can listen to the fossil fuel industry and the politicians they pay who are spending huge amounts of money on lobbying and campaign contributions to pass this dirty side deal, or we can listen to the scientists and the environmental community, who are telling us loudly and clearly to reject the side deal and eliminate the $50 billion in tax breaks and subsidies Congress is already providing to big oil and gas companies each and every year.”

Sanders isn’t alone. House Natural Resources Chairman Raul Grijalva went public with his concerns over the permitting deal pretty immediately after the terms of the Manchin-Schumer Inflation Reduction Act deal was announced, pledging to push for a standalone vote on any final language.

Grijalva is one of more than 70 House Democrats who signed on to a letter addressed to House Democratic leadership today opposing the deal. The deal is full of “anti-environmental and anti-environmental justice provisions,” the letter said.

But other Senate Democrats are getting behind permitting reform. Sens. Ron Wyden, Brian Schatz, and Martin Heinrich are all indicating that reforms are necessary to timely build renewable energy projects.

Schatz told Politico that “like it or not,” Congress has to “change some federal laws” in service of clean energy and climate change goals.

YELLEN OPTIMISTIC ABOUT GAS PRICES DRIVING DOWN INFLATION: Treasury Secretary Janet Yellen said yesterday that the recent drop in U.S. gas prices could put additional downward pressure on inflation, even as she acknowledged concern over the broader global energy crisis in the West driven by Russia’s war in Ukraine.

"Gas prices have been falling now for essentially 80 days in a row, which is certainly good news," Yellen said, speaking to reporters yesterday in Detroit. "And it caused headline inflation to actually go into negative territory in July and I think there will be some further impetus in the next report — gas prices have continued to fall."

This marked the twelfth consecutive week that the nation’s average retail fuel price has fallen, according to analytics firm GasBuddy.

Crude oil is trading down near its lowest levels since January, too. WTI closed at $83.5 per barrel yesterday. Brent closed at around $89.

On EU energy crisis: Yellen also had more to say on the energy crisis gripping European allies, who are formulating and proposing emergency measures to help consumers being crushed by high energy prices.

She talked up the Biden administration’s campaign to facilitate more shipments of liquefied natural gas to the EU, which has pledged since the beginning of the war to gradually reduce imports of Russian gas. Russia, instead, has ripped off the Band-Aid, reducing to zero volumes through the Nord Stream pipeline.

"We're doing everything we can on the LNG front to be helpful,” Yellen said. She mentioned the administration’s effort to impose a price cap on Russian oil, “which I think can also be helpful."

Yellen and other supporters of an oil price cap — remember that a cap on natural gas prices is now also on the table, according to the European Commission — insist that it can be done in a way that avoids major disruption to markets, but some are quite skeptical about it functioning as intended.

“My view is these [price caps] will quickly result in Russia responding by cutting off ‘unfriendly countries,’” Jonathan Stern, a distinguished research fellow at the Oxford Institute for Energy Studies, told Jeremy.

“Unfriendly” countries hearkens back to the label with which Vladimir Putin began branding EU customers who criticized his war effort and supported sanctions against Russia.

“Whether that’s what we want,” Stern said, referring to more cutoffs, “as we move into winter with energy prices already very high and concerns about energy shortages depends on your view of the best way to help Ukraine.”

CALIFORNIA ASKING FOR DEMAND REDUCTION AGAIN: California ISO has instituted another “flex alert” for today covering hours of 4:00 to 9:00 p.m., asking consumers to conserve electricity to help it manage peak demand conditions being driven by high temperatures.

The grid operator has been asking the same of power customers all week long. Temperatures have been reaching well into the 100s and marking new records in several regions.

Operators have been able to avoid load shedding despite the close margins, and officials, including Gov. Gavin Newsom, have praised Californians for heeding calls to use appliances and air conditioners more sparingly and thereby avoid blackouts.

The Rundown

Houston Chronicle How California managed to keep the power on when Texas couldn’t

New York Times Europe is sacrificing its ancient forests for energy

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MONDAY | SEPTEMBER 26

The 6th annual, five-day National Clean Energy Week kicks off in Washington, D.C.