Opinion: Vermont Gas pipeline formula doesn’t add up
While hundreds of Vermonters from every corner of the state clamor for a stop to the fracked gas pipeline, Steve Wark of Vermont Gas Systems (VGS) keeps asking, “How can we get gas to Rutland more quickly?” This despite the fact that, as Mr. Warrick from Cornwall has pointed out, the July 12, 2012, issue of the Addison Independent quoted Mr. Wark as saying that VGS expected to reach Rutland with gas service within seven years. This quote was printed before VGS inked a deal with International Paper. Once the IP deal was reached, all of a sudden VGS would not be able to get to Rutland before 2035 unless they were allowed to bring gas to International Paper first.
Unfortunately, Steve Wark’s recent purported “simple but powerful formula,” “Phase I + Phase II = Rutland,” is not a formula at all. A formula is “a rule or principle, frequently expressed in algebraic symbols,” according to dictionary.com. Instead, his is an equation — “an algebraic expression that asserts the equality of two quantities.”
Steve Wark’s algebraic expression asserts that the fastest way to get gas to Rutland is from Colchester through Vermont’s rural landscape and across Lake Champlain. The problem is it’s just that, an assertion.
Everyone knows the simple formula Wark was reaching for: The shortest distance between two points is a straight line. The quickest pipeline route would have been straight down Route 7, where no easements or seizures via eminent domain would have been necessary because of an existing public road right-of-way. Instead, VGS chose the longest route — through towns the company thought would be pushovers because their median home values and incomes are lower than Shelburne’s and Charlotte’s.
Wark’s equation never worked by any honest interpretation, but its justification has recently become insurmountably difficult. Developments in Canada threaten both the supply and transportation cost for natural gas that VGS hopes to purchase from suppliers in Alberta, Canada, and transport through TransCanada’s pipeline. TransCanada’s plan B in case the Keystone XL pipeline stalled has always been the Energy East project, which involves converting the company’s natural gas transmission line into a tar sands pipeline. We all know that Keystone XL didn’t make it through the U.S. Senate recently. What Vermonters might not know is that without Keystone XL, TransCanada will be pushing its proposed Energy East project much harder during the year-long review process of its permit application to the Canadian version of our Public Service Board.
Sophie Brochu, the CEO of Gaz Métro, VGS’ Canadian parent company and supplier of natural gas to Vermont, recently stated in a speech that the Energy East pipeline will threaten Gaz Métro’s ability to provide adequate service to customers in Canada on peak days, including industrial clients, and will cause an increase in the cost of natural gas to consumers. Guess what? Gaz Métro/VGS is a public utility and passes on all cost savings AND all cost increases to its customers. VGS’ only source of natural gas is the pipeline threatened by the Energy East project, and Gaz Métro already said in its annual report a year ago that any change in transportation costs or gas supply could eviscerate the cost competitiveness of natural gas over oil. That was BEFORE the recent 30 percent drop in the price of oil.
What does all this mean for VGS’ equation? We need to rewrite it:
(Phase I + Phase II) x (gas supply reduction + gas transportation cost increases in Canada) = colossal rate hikes for VGS ratepayers + stranded fossil fuel infrastructure in Vermont + dug up farms and condemned properties – (minus) any reasonable justification whatsoever.
Any eighth-grader can tell you that this new equation can be further reduced to:
Phase I + Phase II = little-to-no benefit for Rutland or Vermont.
A simple but powerful formula for evaluating fossil fuel infrastructure proposals in the future might be: “The fastest route to renewable energy is never via fossil fuels.”
An equation would do too: fossil fuels ≠ renewable energy.
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