Editorial: LIPA and abundant natural gas
Electric bills will be a few dollars cheaper starting this month, because natural gas is plentiful. And those low prices are the reason a fiery controversy over importing gas into our region has, after eight years, finally been vaporized.
First, even a modest rate reduction by the Long Island Power Authority should be welcomed. While LIPA can't take credit for lower costs, it should get credit for passing along a 4.3 percent cut in the fuel supply charge. This didn't always happen. For years, the cost of fuel was an escalator that only went in one direction -- up -- which sometimes resulted in overcollection. Last year, the public utility started making quarterly adjustments for fuel. But private utilities do this monthly -- a goal LIPA should set for itself.
What Long Islanders might find even more remarkable than a declining LIPA bill is the sudden abundance of natural gas from domestic sources. That wasn't the argument just a few years ago, when the proponents of Broadwater Energy, a project of TransCanada and Shell Oil, wanted to build a floating platform the size of four football fields in the middle of Long Island Sound, just off Wading River. Tankers filled with liquefied natural gas from foreign shores would unload their cargo where it would be converted back to gas and then sent, via deep pipelines, into the metro area. The justification for taking over a part of the sound and patrolling it with armed boats was that the imported gas would stop price spikes in winter.
Acknowledging that there was no longer a market here for LNG, last month Broadwater formally notified the Federal Energy Regulatory Commission that it was abandoning the project. While former Gov. David A. Paterson refused to issue the required approvals for Broadwater in 2009, the company still had its federal permits in place and appeals to pursue.
Now the gas industry says that the process of fracking natural gas from shale has increased the supply and dropped prices so dramatically that the United States should be an exporter of LNG to the Far East, where it can be sold at a premium.
To do so will require new pipelines and terminals. But none, thankfully, will be in the Long Island Sound.
