In 1980, under the first administration of Governor Jerry Brown, California decided it wasn’t going to build any more power plants but would follow Amory Lovins’ “soft path,” opting instead for conservation and renewable energy. By 2000, with the new digital economy sucking up electricity, a drought in the Pacific Northwest cut hydropower output and the state found itself facing the Great California Electrical Shortage.
You know what happened next. For weeks the Golden State struggled to find enough electricity to power its traffic lights. Brownouts and blackouts cascaded across the state while businesses fired up smoke-belching diesel generators to keep the lights on. Governor Gray Davis finally got booted out of office but the state didn’t rescue itself until it threw up 12,000 megawatts of new natural gas plants.
At that point California officials decided that the whole thing had been engineered by Enron and other out-of-state merchant providers and the charges and lawsuits flew. No Democrat ever learned a lesson. The state is now 60 percent dependent on natural gas for its electricity — twice the national average — and its electric bills are almost twice that of surrounding states. Industry is headed for the door.
So how have California’s liberal counterparts on the East Coast managed to avoid the same fate? You’d think a region that could produce Elizabeth Warren and Bernie Sanders plus legions of college students trained to hate fossil fuels would have no trouble pursuing the same green dreams. Well, it’s about to happen. In the next few years New England will be facing a full-scale power shortage.
Last week the governors of the six New England states met in an emergency session at Bretton Woods, New Hampshire, to discuss what to do about the pending crisis. Significantly, they asked the premiers of five of Canada’s provinces to attend. That makes sense because if the region is going to get electricity from anywhere it is probably going to be from north of the border.
In a hell-bent campaign to rid itself of any form of dirty, messy “non-renewable” energy, New England has been closing down coal and oil plants for the last decade. In 2000, 18 percent of New England’s electricity came from coal and 22 percent from oil. Today it’s 3 percent coal and 1 percent oil. Meanwhile, natural gas — the fuel that everybody loves until you have to drill for it — has risen from 15 percent to a starkly vulnerable 52 percent, just behind California.
There’s only one problem. New England doesn’t have the pipelines to bring in the gas. Nor is anyone going to allowed to build it, either. Connecticut and Massachusetts are only a short distance from eastern Pennsylvania, where fracking for natural gas has leapfrogged the Keystone State into third place for overall energy production. Yet a proposal by Sempra Energy of Houston to expand its existing pipeline from Stony Point, New York, has already met fierce resistance from people who want nothing more to do with fossil fuels and construction is highly unlikely.
It’s not as if it’s not needed. Last winter, when record low temperatures hit, there just wasn’t enough gas to go around. Utilities that service home heating have long-term contracts and get first dibs. You can’t stockpile gas the way you stockpile coal, so power plant operators were left bidding against each other for what was left. Prices skyrocketed from $4 per mBTU to an unbelievable $79 per mBTU and electricity prices spiked to ten times their normal level. Just to put things in perspective, during the first four months of last winter, New England spent $5.1 billion on electricity. In the whole of 2012, it had spent only $5.2 billion.
And that’s just the beginning. New England is now limping along with 33,000 megawatts of electrical capacity, which barely meets its needs. At one auction last winter, the New England Independent Systems Operator, which manages the grid, came up 145 megawatts short — an almost unheard of occurrence. Yet in the next two years the region will be closing down 1/10th of its capacity in a bid to rid itself of anything that does not win favor with environmentalists. First to go will be the last of four coal plants at Salem Harbor, which can no longer meet the EPA’s new regulatory requirements. Next Brayton Point, the largest remaining coal plant, will be retired for the same reason. Finally, a continual barrage of protests and legislative attacks has persuaded Mississippi-based Entergy to close the Vermont Yankee Nuclear Station and “let the Yankees freeze in the dark,” as they used to say in Texas and Louisiana. The reactor provided 75 percent of Vermont’s electricity and 4 percent of the power for the region, carbon-free.
“It’s going to be very tricky for New England over the next three to four years,” says Gordon van Welie, CEO of the Independent Systems Operator of New England, which run the grid. Van Welie begged the region not to close down Vermont Yankee and Brayton Point, but who listens to anyone who understands electricity anymore? Interestingly, New England only got through last winter by regularly importing 1,400 megawatts from Indian Point, the two nuclear plants on the Hudson in neighboring New York. Says New Hampshire energy consultant William P. Short III, “Without Indian Point, New England would have been toast.” As you might expect, New York Governor Andrew Cuomo and most of the state’s Democratic politicians are trying to close down Indian Point as well.
Naturally, all this is falling hardest on people who hold blue-collar jobs. The Gorham Paper and Tissue Company in New Hampshire was forced to reduce production and lay off workers in the depths of last winter. The Great Northern Paper Co. in Maine laid off 200 workers and closed down for four months. In fact, if you want to know why we have “income inequality” and a “disappearing middle class,” look no further than the class warfare being waged on American industry by upper-educated elites snugly ensconced in the digital economy or sitting in Washington writing regulations telling everybody else what to do. “We’re going to have an economy that operates only nine months of the year,” complains Maine Governor Paul LePage, the only Republican in the region.
So where will New England be getting its electricity? Almost daily the newspapers are filled with stories about how the region is “going green” and about to enter the delightful world of “clean energy.” It’s sheer fantasy. No one has the slightest notion of what it would entail. You would have to cover half of the Green Mountains with windmills to recover the power lost at Vermont Yankee and even then it would only work when the wind is blowing. Almost as soon as the news came about the closing of Vermont Yankee, one company proposed building a power plant that burned wood in the wilds of western Massachusetts. However, someone soon discovered that burning wood produces smoke and carbon dioxide as well. It was quickly shouted down. It’s probably just as well. At one point Massachusetts drew up plans to harvest wood for electricity and discovered it would soon strip the state of its forests.
So the only “clean energy” left in New England these days is hydroelectricity — generated in Canada. The Canadians are indeed developing huge dams in James Bay and are eager to sell to Americans. But that means building transmission lines down from the north and everyone is opposed to that as well. Northeast Utilities, which services much of New England, has been trying to build a Northern Pass transmission corridor since 2009 but environmental groups insist the lines be buried underground. Two documentary films — a standard item these days — have already been made opposing the project. Meanwhile, environmentalists have become so ambitious and well funded that they have bought up land and property rights in northern New Hampshire just to block its path. Plans to bury just eight miles of the 187-mile route have ballooned costs from $200 million to $1.4 billion and the project is years from completion — if ever.
So what is likely to happen? Another cold winter is certain to bring skyrocketing prices and possible brownouts. New Englanders already pay 45 percent higher electric bills than the rest of the country and that figure can only grow. The first region of the country to industrialize is about the drive away the last of its blue-collar workshops.
One thing the region will not run short of, however, is political bluster. When the New England States Committee on Electricity (NESCOE) tried to broker a deal to have ratepayers finance a collectively owned gas pipeline, the volunteer organization was lambasted for “conspiring with industry to produce profits” and “failing to consider all the renewable alternatives.” When the crisis finally arrives this winter or next, you can be sure Vermont’s socialist Senator Bernie Sanders will be at the head of the pack, braying that the whole thing has been caused by “speculators.”
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