BEAT believes that most of the gas that would come through the proposed pipeline would be exported to Europe and/or Asia.
Here are our reasons for believing this.
The proposed pipeline would run from Pennsylvania, through Wright, New York to Dracut, Massachusetts. This pipeline would carry 2.2 billion cubic feet of natural gas per day. This is almost 4 times more than the 0.6 billion cubic feet per day once requested by the New England governors. (Now Massachusetts is questioning whether we need any more gas. A study [off-site link] is underway to see what the best ways to meet our energy needs would be.) Where would the extra gas go?
A pipeline currently runs southward from the Canadian provinces of Nova Scotia and New Brunswick to Dracut, Massachusetts. The company that owns this pipeline has asked for permission to reverse the direction of flow in this pipeline so that it travels northward from Dracut to Nova Scotia and New Brunswick.
A slide from a Kinder Morgan presentation seems to already take this directional change into account.
Terminals in New Brunswick and Nova Scotia have applied for export licenses for their terminals. The terminal in New Brunswick (Canaport) has already received its permit and has a capacity to export 1.2 billion cubic feet per day. Here is a page taken from the website of the Federal Energy Regulatory Commission (FERC) showing pending export applications. Note the two pending applications in Nova Scotia. [Now there is a 3rd proposed export terminal – Bear Head in Richmond County, NS [off-site link] – October 2014]
Will these ports actually export to overseas markets? Here’s part of a news story from Bloomberg News.
Here’s the beginning of a press release from Pieridae Energy in Canada.
Why would companies want to export their natural gas? Here is a graph showing the relative prices being paid for natural gas in the United States (Henry Hub), Europe, and Asia.
The price of natural gas in Europe is three times the US price. The price in Asia is five times the US price. So not only will most of the gas coming through this pipeline be exported, but we will have to start competing with higher European and Asian prices if we want any of the gas to stay here in New England. And to add insult to injury, the New England governors have asked that this pipeline be partially financed by electricity customers through a tariff.