Shepstone Management Company, Inc.
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The French fuel riots demonstrate what can happen when ordinary people are denied the basic necessities of life by “let them eat cake” elitists with agendas.
The French Revolution is hardly a thing to be admired, given its ultimate consequences, but it was the natural result of a “let them eat cake” elitist mentality on the part the country’s monarchs. Ironically, Louis XVI, was a liberal monarch by the day’s standards, but he was too slow to understand the force of what was happening and had a completely tone-deaf wife. They both lost their heads as a result.
Today, there is another French revolution of sorts taking place as “Yellow Vest” protesters and anarchist rioters are turning Paris upside down to oppose fuel prices increases mandated by a similarly tone-deaf French President Macron. The President is committed to the climate change battle because that’s what European elites are expected to do and has implemented a number of measures designed to discourage driving and the like by French “roturiers” (commoners) as the upper classes fly to global warming conferences in private jets. The French people are having none of it.
Could New Englanders revolt in a similar way when high natural gas prices hit again or the heat goes off due to New York Governor Andrew Cuomo’s pipeline obstruction? Could the “Great Wall of Cuomo” come tumbling down, rhetorically speaking, as New Englanders armed with pitchforks attack?
Tearing down the Berlin Wall. Could this be New Englanders and New Yorkers tearing down the “Great Wall of Cuomo” as some label his pipeline obstruction?
The pitchfork image, of course, is way out of date. Massachusetts seems to be mostly home these days to stuffy elitist types whose thoughts are in complete sync with the New York urban gentry class to whom Cuomo constantly panders. They’re more likely to be holding plastic placards aloft to dishonestly signal their virtues on the subject of fossil fuels, than pitchforks. Crisis has a way of changing attitudes, though, doesn’t it?
Yes, when the wallet is emptied, the heat can’t be turned up and there’s only government to blame, people of every class tend to get angry and look for scapegoats. Andrew “Corruptocrat” Cuomo is nothing if not a perfect scapegoat. No one especially likes or trusts the man. He simply has the power for the moment and in his Machiavellian world that’s all that matters.
As long as things are going well for the elites, urban New Yorkers tolerate him and there aren’t enough upstaters to make a difference. He gets by quite nicely by positioning himself as the alternative to far-left wackos and other spineless, vacuous opponents. Will they tolerate him when things go bad, though? I doubt it. And, New Englanders surely have no debt to him. It’s a recipe for political disaster when things go wrong and they’re going very wrong.
Here’s what I mean, from Energy Global’s World Pipelines:
From New York to Maine, the lacking natural gas infrastructure will have a huge impact on consumers’ natural gas and power prices this winter, write Chris Amstutz, Risk Management Associate, and Matthew Mattingly, Director of Natural Gas Services, at Choice Energy Services (USA)…
It is no secret that politics have played a heavy hand in setting up this situation. New York Governor Andrew Cuomo has been active in denying new energy infrastructure in his state. This year alone we have seen the denial of the William’s Constitution pipeline and the William’s Transco expansion. These projects would have collectively brought about 1 billion ft3/d in new supply New York, while freeing up additional supply to New England…
The Eversource project would expand the Algonquin pipeline system through Connecticut and would bring an additional 1 billion ft3/d in supply to the region. It is uncertain as to whether this project will be approved, but a supply shortage this winter would certainly help its chances. Planned investment through New York to New England is likely to slow further, as the Great Wall of Cuomo will likely be continued after the recent election.
So how dire is the situation this winter? For power generation, ISO New England is openly acknowledging that they are one supply disruption away from issuing rolling black out orders in the region, if an extended cold event were to occur. Last year during the New Year’s Day arctic plunge, ISO operators were forced to bring on aging, and potentially unreliable, coal fired plants to meet base load electricity demand. It is estimated that during the peak of winter cold,
New England uses 4.5 billion ft3/d of natural gas. There are currently enough pipelines to supply 4.7 billion ft3/d of gas. Without additional pipelines, every state to the northeast of New York will continue to rely on the Algonquin and Tennessee pipelines for domestic supply. Therefore, the remainder of supply comes from Canada, and from the LNG facility in Everett, Massachusetts. It is also important to note that any LNG imports will have to be from other countries at a heavy premium (Russia mostly) due to the Jones Act of 1920…
Historically, how elevated can prices get? Last January we saw daily Transco Z6 NNY gas prices top US$125 MMBtu, and daily Algonquin prices top US$79 MMBtu. With storage levels in the region 10 – 20% lower than last year at this time, the situation could be much worse assuming a similar type of cold event. Real-time power pricing in Massachusetts also spiked to over US$500/MWh.
The straight average of Mass Hub Real Time power for the month of January 2018 was US$108/MWh. These prices serve as a reminder to end users of the importance of hedging against winter uncertainty and the volatility that follows. Both ISO-NE and natural gas suppliers are going into the winter with the mentality of “not if, but when” will natural gas deliverability constraints become an issue.
The “Great Wall of Cuomo” is a nice description of what Corrupotcrat has done. I suspect he hoped FERC would overrule him so he’s win both ways but in the case of the Constitution Pipeline that didn’t happen, at least not yet. The courts and FERC did rescue him from the Millennium and Northern Access situations but the main pipeline needed to serve New England was the Constitution and his political play has left him entrapped on that one. Perhaps the Feds will yet save his rear end on that one, but there’s no guarantee.
If they don’t save him, we may see yellow-vested New Yorkers and New Englanders attacking the “Great Wall of Cuomo” with picks and crowbars, if not pitchforks, just as happened to the Berlin Wall.
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