Of course, much depends on Mother Nature. Meteorologists are predicting relatively mild temperatures for Europe and the Northeast this winter thanks to the weather pattern known as La Nina. Gas prices for next-month delivery have tumbled on both sides of the Atlantic as a warm autumn curtails demand. But in late October, the UK’s national weather service said the country’s chances of a colder-than-normal winter are increasing.
At the heart of the Northeast’s energy squeeze is natural gas. Even after Pennsylvania’s shale boom brought abundant supplies to the region’s doorstep, constraints have persisted.
That’s because New England and the Mid-Atlantic are more reliant on gas than ever. Coal-fired power plants have shut in droves, falling victim to environmental opposition and competition from cheap gas. Wind turbines and solar farms haven’t sprouted up quickly enough to replace them. And that bounty of shale gas in Pennsylvania? Concerns about climate change have scuttled plans for pipelines to bring it eastward. The Northeast’s dilemma reveals how the energy transition, at least in the short term, is ratcheting up the pain for consumers.
Almost half the electricity generated in New England and New York comes from gas. In extreme cold, heating may take priority over running power plants, which keep the lights on.
“The New England region has been on a lousy carousel ride for about a decade now trying to address the risk that comes each winter because of its over-reliance on a single fuel source,” Allison Clements, commissioner for the Federal Energy Regulatory Commission, said in an interview.
Heating oil and diesel are also part of the equation. The number of Northeast households that use heating oil has ticked lower as more switch to gas, but that’s little comfort to the almost 20% of homes there that still rely on it. The East Coast, the one US region dependent on foreign imports, has to vie with countries struggling to replace Russian supply. Refineries from Virginia to New Jersey have shut after failing to compete with larger Gulf Coast rivals.
A Third of Normal | US Northeast distillate fuel supplies trail the seasonal average
A diesel shortage, meanwhile, can have devastating economic consequences. The bulk of consumer goods moves on trucks and trains powered by the fuel, which is also used in manufacturing and food production.
The Northeast isn’t entirely isolated from oil and gas pumped from other US regions. It can pull supplies from pipelines snaking up from the Gulf Coast and other points west. Heating oil and diesel are also delivered by truck and train. In rare cases, they come by sea, though the law requires that only US-built ships deliver fuel within the country — and there aren’t many of those.
But in a deep freeze, the Northeast will need more supply from abroad. The bulk of it will come from Canada, and some will come from Europe, a region that will be hard-pressed to export fuel with its own energy security at stake as the continent pivots away from Russia.
Other supplies will arrive from overseas. Cargoes of liquefied natural gas set sail each winter from Trinidad under a long-term contract and arrive at a terminal outside of Boston. Shipments to the East Coast have also come from Nigeria and a handful of other countries.
On peak days in the winter, as much as 35% of New England’s natural gas supply comes from LNG cargoes, according to New Hampshire utility Unitil Corp. And the US will find itself in competition with buyers from the UK to Japan.
That’s also true for so-called distillates like heating oil and diesel. Last year, more than a fifth of the East Coast’s supply came from abroad.
Eventually, the Northeast may be able to wean itself off foreign fuel by ramping up renewable energy. But in the short term, there’s little relief in sight.
“It’s not gonna be pretty for the consumer,” said Robert Yawger, director of the futures division at Mizuho Securities USA.