You can find out some really interesting things from listening to podcasts. Today I listened to the Tipping Point New Mexico podcast about as they discussed Joe Biden's energy policies and how they impact energy production in New Mexico and the rest of the country. It was a very informative discussion, but one item they touched on caught me completely by surprise.
It was mentioned that if the coal burning power plants in the northeastern United States wanted to convert from coal burning to clean natural gas there would be major problems due to a lack of pipelines and that the region was being forced to buy it from Russia.
Russia?
That couldn't possibly be true could it? Why would anybody have to buy natural gas from another country when the United States is the largest producer of the product in the world?
Well there are several reasons, all of which are somewhat idiotic.
First problem, the states of New York, Massachusetts and New Hampshire have canceled new gas pipeline construction citing environmental concerns. These new pipelines would have supplied enough natural gas from neighboring Pennsylvania to keep up with the demand that is taxing the inadequate pipelines already in place.
An interesting article in Oil & Gas 360 points out:
Gov. Cuomo’s threat appears to be short sighted as alternatives he stated were shipping gas via trucks vs. pipeline delivery. Those alternatives would be more costly to consumers, with more environmental and safety risk. With no new gas pipelines allowed in the state and no fracking, future winters could be very cold for New Englanders and New Yorkers…a man-made catastrophe. Under Cuomo, New York has unilaterally halted interstate pipeline construction, undermining the ability of other northeastern states in the region from accessing low-cost, American natural gas.What is the issue with solving this supply problem with increased pipeline capacity through New York? Perhaps political obstacles driven by environmental groups? Over the past two years, two major natural gas pipeline projects have been cancelled due to regulatory issues. Massachusetts and New Hampshire blocked the $3 billion Access Northeast Pipeline.
People in New England should have access to reliable and affordable natural gas produced here in the United States, not in Russia’s Arctic. Expanding the pipeline capacity from the Marcellus shale gas fields in Pennsylvania to the New England region makes more sense than importing LNG. Even the Boston Globe has criticized the importation of LNG from Russia into the Everett LNG Import Terminal near Boston’s Logan Airport.
There is a lot of great information in the piece which you can read HERE.
Now, you may wonder why Boston is buying natural gas that has to travel 4500 miles from Russia when we have so much of the product here in America. Pipelines aside, why aren't they just having it shipped by tanker from nearby Pennsylvania or as the podcast suggested refineries here in Louisiana?
Well due to the 1920 Merchant Marine Act (also known as The Jones Act) that would be illegal.
The act states:
So for you to ship anything produced in this country from one American port to another you have to use a vessel built in this country and presently there are no vessels that can safely transport liquid national gas being built here. It also means that you simply couldn't purchase such a ship from anywhere else in the world either.
It is against the law.
So, why not just appeal the Jones Act? Here are some reasons for keeping the one-hundred year old act in place from Defense News:
The Jones Act requires that all vessels carrying goods between two U.S. points be American-built, -owned, -crewed and -flagged. This policy provides stability to the U.S. maritime industry and helps to sustain 650,000 American jobs, resulting in $150 billion in economic benefits each year. Most importantly, the Jones Act advances our national security by helping maintain a vibrant domestic shipbuilding industry and maritime workforce. Our shipbuilders supply the military with warships, and U.S. mariners play a key role in transporting military personnel and equipment overseas in times of crisis.
Our nation has always depended heavily upon maritime commerce. Our land is knit together by a vast network of sea and river ports, where waterborne vessels deliver food, natural resources and manufactured goods to market. These supply lines are important in every season, but they have become especially crucial during the COVID-19 crisis. Seaports have enabled front-line workers to continue bringing essential goods to our communities, as well as lifesaving ventilators, testing supplies and personal protective equipment to doctors and nurses treating patients.
This critical movement of goods has been secured by the Jones Act.
To imagine life without this law, consider the risks we would face if foreign-owned companies were allowed to conduct our domestic trade during this pandemic. Foreign companies would be able to influence the flow of domestic goods and resources that are keeping our economy afloat. Thousands of now-secure American jobs throughout our shipbuilding and maritime workforces would be threatened, and foreign governments could gain even more undue leverage over our economy.
This is a complicated problem indeed.
It would seem that eventually the matter is going to be forced as the present administration pushes for more green sources energy. Eventually those canceled pipelines will become mandatory to supply new natural gas power plants in the northeast and because of that it will inadvertently open up a supply for consumers as well.
It's hard to believe that citizens are being deprived of natural gas from an adjacent state due to environmental hysteria and a hundred-year-old act coming together to form a barrier that forces them to purchase it from one of this countries political and economic adversaries.
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