By Toby Z. Rice
Winter Storm Fern has delivered a clear and uncomfortable reminder of how America’s energy system actually works when it is under stress.
During the storm, natural gas prices at Station 165 – located in Pittsylvania County, Virginia, where the Mountain Valley Pipeline (MVP) interconnects and Appalachian gas flows toward the Southeast – spiked to roughly $150 per thousand cubic feet (Mcf), nearly fifty times the national average price last year.
This was the result of scarcity pricing. In plain terms, the market was signaling that there was not enough infrastructure to move available gas supply where it was urgently needed.
When temperatures plunge, demand spikes, and reliability matters most, the grid depends on resources that are dispatchable, fuel-secure, and available around the clock. That dependence is not ideological; it is operational.
This is where permitting reform stops being an abstract regulatory debate and becomes a consumer issue.
While much of the nation is seeing historically high natural gas prices, the hardest hit regions are the very regions across the Eastern Seaboard that have seen proposed natural gas infrastructure blocked or delayed over the past decade.
Pipelines are proposed because there is anticipation of demand. When those pipelines cannot be built and the demand manifests, regions are forced to either turn to alternatives, force demand off the system through price, or both.
A good example is New England. While nationally, natural gas supplied approximately 41 percent of U.S. power generation during Fern, New England was powered by oil – accounting for roughly 39 percent of generation. With limited natural gas infrastructure and renewables unable to meet the demand, the region was forced to turn to a more expensive, more polluting source of power. This is not the clean, affordable future the people of New England were promised.
The painful irony is hard to miss. Policies intended to protect consumers and the environment can end up increasing prices and emissions during the moments of greatest vulnerability.
The Mountain Valley Pipeline, which is finally in service after years of litigation and delay, almost certainly would not have been built under today’s permitting regime were it not for an act of Congress. If that is what it takes to complete a single, critical pipeline, something in the system is fundamentally misaligned with reality.
Affordable and reliable energy is not optional; it is foundational. Every hospital, factory, and household depends on it. And every credible energy system depends on infrastructure that can actually be built, expanded, and operated.
Plans are underway to expand MVP and other pipeline infrastructure to deliver even more gas to regions that need it. Yet those plans are already encountering legal challenges based on assertions that additional infrastructure is unnecessary. Recent events prove otherwise.
Energy does not move on wishful thinking. It moves through pipelines and transmission lines that require permits that are timely, predictable, and grounded in law, not endless cycles of delay and litigation.
It is time to acknowledge reality. Demand is growing. Reliability margins are tightening. Winter Storm Fern is a warning that those margins will be exposed in the form of triple-digit natural gas prices. We need to return our nation to the reliable, affordable system we had just over a decade ago, and the way we can do it is through permitting reform that allows us to deliver energy when and where it is needed.
We need a permitting framework that is rigorous but workable, environmentally responsible, and decisive. One that allows critical infrastructure to be evaluated thoroughly and then, once approved, actually built and put into service. And we need this framework today.
Permitting reform is not ideological. It is practical. And it is urgent.
Toby Z. Rice is President & CEO, EQT Corporation, a global leader in Affordable, Reliable, Clean Energy.
This article was originally published by RealClearEnergy and made available via RealClearWire.
The Green Blob has gone from NIMBY to BANANA (build absolutely nothing anywhere near anything) nihilism. Voting out idiots who either do not recognize that or endorse it is the solution.
Wouldn’t New York State have enough gas just by fracking, if Pennsylvania can do it why can’t NY? Every Monday at 8:30 we told are smart New Yorkers are or so we like to believe. Obviously this whole dissertation is with tongue in cheek.
They “can’t” because the Democrat Party in New York made it illegal.
My automatic oil delivery did not happen on time and there was a spike in oil prices for a few days going from $3:50 to over $5:00 per gallon for a short time. With this planned obsolescence of oil two Hudson oil depots for barge delivery are no longer in operation. Does not bode well for the future.
Even worse if someone is using coal for heating, as a few may still be in areas where gas is only relatively recent (such as Vancouver Island).
You want a bigger tank and/or a higher re-order threshold.
“Something in the system is fundamentally misaligned with reality.”
Cue the Twilight Zone opening soundtrack and:
You unlock this door with claims beyond human imagination. Beyond is a world full of fright, a world of endless fear, a world of apathy and depression. You’re moving into a land with neither logic nor substance. You’ve just entered into the Alarmist Zone!
My apologies to the late, great Rod Serling, but I believe that about covers it!
This sounds like a problem to turn DJT loose on, right up his alley.
Demand, especially in North Carolina is growing both due to population increases and coal retirements. Other than the Transco system there really isn’t any interstate gas transportation in North Carolina. There is fairly good intrastate delivery options but not much upstream.
Transco was originally designed to move gas from the South to the Northeast, but Station 165 has become a hub to move gas to the Southeast.
Multiple projects in the works:
MVP Southgate would move 550,000 Dth/d from Station 165 southeast into North Carolina
Transco Southeast Supply Enhancement (SESE) would add 1,596,900 Dth/d from Station 165
MVP Boost Project proposes an added 500,000 Dth/d through additional compression on the MVP mainline.
With regard to New England, Transco has been trying for decades to get a pipeline through New York State (the Constitution pipeline) but has been blocked for political reasons. I believe it just won FERC approval but has a long way to go at the state level.
The now abandoned Atlantic Coast Pipeline would have mitigated these ga constraints in Virginia and North Carolina. It was fought tooth-and-nail in the courts by enviros with their fat coffers, so the utility gave up.
Utilities also have fat coffers- perhaps they should fight harder for the public.
The problem now is time. They are out of it. There are a few projects underway to increase the amount of natural gas transported, but there are bottlenecks throughout.
We cannot drill our way out of a delivery problem. We can only drill our way out of a supply problem. In 2027, the US will have enough gas, but it will be stuck in the wrong place. This makes pipeline operators (the “toll collectors”) the most powerful players in the energy ecosystem for the next five years.
The pain will start this year. This is the year many large contracts between pipeline companies and natural gas produces expire. New contract negotiations are underway. The new contracts being offered are not fixed rate as before; there will be various triggers that will automatically adjust rates during the contracted period. And the new base rates are double-digit increases over the past fixed rates.
Hang on to your hats, we’re in for a wild ride. If the winter of 26-27 is as cold as this one has been there will be significant problems in the US, particularly in the Northeast. If AI cranks up as expected, an average winter will be difficult to get through.
The Cost of Power: ABC57 digs into rising utility bills causing regional outrage
People in Indiana don’t seem to grasp what’s really driving up electricity price.
They blame data centers, bureaucracies, greedy gas companies. Everyone but the ruinables industries.
Very nice. What we need to do is hold those responsible for the lack of infrastructure accountable. We know who they are, it is time for them to pay up. Every outfit or individual involved in efforts or litigation to stop fossil fuel or nuclear infrastructure should be taken to court. They have caused untold damage, inconvenience, harm and death for no good reason.