THE EVERETT MARINE Terminal, where liquefied natural gas is imported into the Boston area, is in danger of shutting down for good.
For the past two years, the Everett terminal has existed primarily to provide gas for the Mystic power plant next door, which itself was kept open by subsidies from ratepayers across New England as an insurance policy against electricity shortages. Now that Mystic is shutting down, the fear of electricity shortages dissipating, the Everett terminal is being pitched as a hedge against a possible shortage of natural gas for home heating and cooking.
National Grid on Friday said it had negotiated a six-year contract with the Everett terminal to supply LNG to its Boston Gas subsidiary, which serves 950,000 customers. The utility asked the Massachusetts Department of Public Utilities to dispense with its usual ponderous pace and approve the contract by May 1 to avoid a shutdown later that month of the terminal. In a filing with the DPU that was posted online on Monday, National Grid said the consequences of inaction could be disastrous.
“There are no viable alternatives in the marketplace that offer the services provided by Everett to the Company,” the filing said. “If Everett were to close, it would significantly and adversely impact the Company’s ability to reliably serve its customers over the next several winters.”
Eversource Energy and other potential customers of the Everett terminal are expected to file similar contract proposals in the next few days – all to keep the LNG flowing.
The situation is another stark reminder that the region’s shift away from fossil fuels isn’t going to happen quickly.
In its filing, National Grid did a bit of “I told you so” analysis. The utility noted it previously backed the construction of an additional natural gas pipeline into the region that would have solved its gas supply problems. When that project failed to gain traction in the face of opposition from fossil fuel opponents, the company said it became reliant on imports of LNG from abroad to cover shortfalls.
“Although production of shale gas in the Marcellus and Utica basins primarily in Pennsylvania and Ohio has continued to grow in recent years, incremental supplies cannot reach the New England market because of pipeline capacity constraints in the region,” National Grid said in its DPU filing. “As a result, local distribution companies, such as National Grid, remain reliant upon LNG imports to meet a portion of peak day and peak season demand. With a limited number of parties able to import LNG into the Boston region, and only the Everett Marine Terminal able to vaporize directly into Boston Gas’s distribution system, the potential closure of the Everett Marine Terminal threatens Boston Gas’s ability to reliably serve its existing firm gas customers on high demand days.”
National Grid says its contract with the Everett Marine Terminal will initially drive up consumer bills by $3.50 during winter months, and increase an average of 1 percent year over year in subsequent years.
The utility said the agreement is compliant with the state’s Global Warming Solutions Act because it will not increase greenhouse gas emissions over current levels. “To the extent there is any increased gas usage due to this Agreement, it will likely be used to serve new customers converting from oil heating to natural gas. On this basis, the Company expects that the acquisition of gas supplies under the Agreement will reduce greenhouse gas emissions and contribute toward the Global Warming Solutions Act goals,” National Grid said.
