Lack of pipeline infrastructure hurts northeastern states

By Patrick C. Miller | April 25, 2017

A lack of pipeline infrastructure in the northeastern U.S. will cost more than 78,000 jobs and $7.6 billion in GDP by 2020, according to a new report by the U.S. Chamber of Commerce.

The report for the Chamber’s Institute for the 21st Century—which asks “What if pipelines aren’t built into the northeast?”—says families and businesses in the region are already paying some of the highest electricity rates in the country. It predicts that the problem will get worse without additional pipeline infrastructure.

“Environmental groups seeking to ‘keep it in the ground’ are fighting to block virtually every project that would bring additional natural gas into in the northeast,” said Karen Harbert, president and CEO of the Energy Institute.

According to the U.S. Energy Information Administration, Connecticut has the third highest electricity rates in the nation, while Massachusetts ranks fourth, Rhode Island is fifth, New Hampshire ranks sixth, New York is eighth, Vermont is ninth, New Jersey is tenth and Maine is eleventh.

While continued development of shale oil and gas in Pennsylvania, Ohio, West Virginia, and elsewhere has helped reduce U.S. dependence on foreign energy and brought back thousands of manufacturing jobs, the lack of access to markets in the northeast will cost those states jobs and revenue, the report says.

“High energy prices are costing the region jobs and income, so maintaining the status quo will be painful,” Harbert said.

Oil and gas resources could be used to relieve capacity problems in the northeast, but continued legal challenges and political opposition have stalled or slowed planned infrastructure projects such as the Constitution Pipeline and Access Northeast pipeline.

“As the regulatory and price environment continues to encourage the use of natural gas, northeast states will find themselves increasingly starved of the energy needed to power the economy and keep the lights on,” Harbert said. “Our analysis demonstrates that there is simply not enough capacity to meet demand, and families, consumers and businesses will all pay the price.”

The economic impact analysis in the report estimates the potential impacts over the next four years, and includes all recently announced pipeline projects. To estimate economic impacts, the report uses publicly available economic data from announced pipeline projects, energy demand forecasts and announced retirements of nuclear generators.

The inputs were run through the IMPLAN model to estimate the overall macroeconomic effects of preserving the status quo, which effectively prevents new pipeline infrastructure from being developed in the region.

The Energy Accountability Series examines what could happen if energy proposals from political candidates and interest groups were adopted.