Editorial: Theatrics and the pipeline
The two objective arguments to the natural gas pipeline in Addison County can be broadly defined as: 1) those opponents who consider the Earth’s long-term environmental health as more important than the region’s short-term economy; and 2) those proponents who put the region’s economy first, believing that a strong economy is the means to transition to renewable energy.
Neither is wrong.
It’s true the burning of natural gas, and the fracking process that extracts it from the ground, will produce harmful climate-warming pollutants. It’s true that the long-term interests of the state, the nation and the world are better served by ramping up renewable energy production and reducing fossil fuel use. Vermont has taken a lead in this movement and has set a laudable goal of generating 90 percent of its energy portfolio through renewables by 2050.
That does not change the fact that the state’s economy needs to rely on fossil fuels for the next several decades.
Today’s reality is that renewable energy produces a small fraction (in 2009 it was less than 5 percent) of Vermont’s energy production. Natural gas supplies, on the other hand, are plentiful and make up more than half the region’s power generation. That’s supply.
On the cost side, natural gas is roughly 51 percent cheaper than fuel oil at current prices. If a business in Middlebury or Vergennes is spending $25,000 on fuel oil annually, that’s a $12,500 difference. If it’s a business like Cabot-Agri-Mark, the difference is reportedly in the millions of dollars. That’s a real competitive advantage or disadvantage — depending on which side of the coin you’re on.
Businesses look to the long term when making decisions about where to locate, or whether a prospective move is in the company’s best interest. If a company sees that it will be spending hundreds of thousands of dollars more each year over 20 or more years, that’s enough incentive to prompt change.
Take a realistic example. If the Cabot/Agri-Mark plant in Middlebury spends $5 million a year in fuel costs, and it could save $2.5 million a year if the natural gas pipeline came to town, what might the company do with those savings? And if it could project 20 years down the road, might that company not more favorably consider future expansion and added employees? Or, on the contrary, if the pipeline did not come to town, might not the plant’s owners eye potential places in Franklin County to relocate where milk is plentiful, many of its farm-members reside, and the fuel savings could be $50 million over the next two decades?
That’s real money, and those are real jobs.
Significant savings are also in line for area schools (less fuel costs mean the potential to cut taxes or improve programs), Porter Hospital and Middlebury College (where hundreds of thousands could be saved annually), and assisted living homes, to name a few. It makes a difference for smaller businesses, too. At the Addison Independent, annual heating expenses routinely hit $10,000. Saving $5,000 a year isn’t such a huge amount that it will spur us to hire more employees, but over the next 20 years it’s $100,000 — and that’s a substantial sum that would likely be spent locally (not sent to Exxon-Mobil, or whomever drills that oil). And we’re an average-size business with relatively modest fuel needs. The impact on other commercial enterprises is far greater.
There are big savings for homeowners too. The average homeowner switching from fuel oil or propane to natural gas would save an estimated $1,500 annually. That’s $15,000 over a decade. That’s enough money to make one consider staying in town, or moving to a town with more competitive prices.
Now, let’s do some math.
Take the savings of one Middlebury business at $5,000 times 200 businesses, that’s $1 million. Then take the roughly 3,000 residents that will be served at $1,500 savings. That’s $4.5 million. That’s a total of $5.5 million in fuel savings in Middlebury each year — much of which would be spent locally. Considering the multiplier effect (where money spent locally has an impact several times over), that’s a huge boost to the local economies in Middlebury, Vergennes and the surrounding area. Ditto if the pipeline were to make it to Brandon and Rutland in the near future. Admittedly, this a ballpark number that serves to make a point: the potential economic impact is significant.
Next, consider potential job growth. For prospective businesses moving into a new marketplace, energy costs are even a bigger factor. Not only is the prospective business looking at raw costs of operation, but also quality of life issues, among which is the cost-of-living in any given town. Compound high energy costs for the business onto higher costs of living for employees and that’s two strikes against a town right off the bat. Without a doubt, high fuel costs are a detriment to attracting new jobs.
It’s easy for those who don’t feel the impact of high fuel costs on their personal pocketbooks to seek a greater good for the environment. It’s less comfortable, however, to watch neighbors lose their jobs; watch as schools lose student population because jobs are not being replaced; watch as property taxes continue to increase as grand lists on the tax rolls decline. Perhaps it’s no coincidence that the most economically robust counties in the state are Franklin and Chittenden, both of which have long been served by natural gas. Granted, there are many other factors in Chittenden County, but it remains relevant that the populations in those two counties continue to grow, as do new jobs, and that their fuel costs are 50 percent less than what we currently see in Addison County and the rest of the state.
The point is simple: This is a mostly an economic proposition. To deny that very real impact, denies today’s reality.
But the pipeline also has a short-term environmental benefit.
Burning natural gas at the point of consumption produces roughly 25 percent less carbon dioxide than burning fossil fuels. The process of fracking natural gas adds to its detrimental effects, making it less beneficial. But natural gas production is going to use the fracking process whether it is consumed in Vermont or not: we’re a spitwad in a mighty big bucket. Not bringing natural gas to Addison and Rutland Counties won’t alter that larger scene one iota. Sure, I get it. It’s the principle and that has a snowball effect, but this isn’t Never Never Land.
Despite the theatrics by opponents at Tuesday’s Public Service Board hearing, there’s no Tinker Bell spreading fairy dust to make the transition to renewable energy magically occur. There’s no Peter Pan rushing in to save the day. And the only gangplank Captain Hook is forcing us down is the fantasy we pursue if we think denying lower cost fuel won’t have a negative effect on the state’s economy and that, in turn, would hinder our ability to reach those environmental objectives.
Angelo S. Lynn
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