Hope the folks in Texas don't pull a "Putin" on us...
Florida stores zero natural gas, yet critically depends on it
January 29, 2009
By David Batt
MY VIEW
Russia's recent decision to halt shipments of natural gas to Europe resulted in millions of people losing heat, light, and electricity. What they gained in return, though, was a better appreciation of how tenuous their energy security is — and a renewed commitment to action.
Floridians don't have to worry about Russian temper tantrums denying residents of our state the energy we need to live. But other, significant concerns remain about the security and continuing reliability of our state's energy supplies.
By now, most Floridians know that our state is increasingly dependent on natural gas for its electricity — and the city of Tallahassee almost exclusively so.
In the first nine months of 2001, Florida used 270 billion cubic feet (BCF) of natural gas for electricity compared to 625 BCF the first nine months of 2008. That's more than double in just seven years.
With more gas-fueled electricity plants coming online and the planned conversion of oil-burning plants to gas, this number is projected to leap another 87 percent in the next seven years.
When it comes to natural gas, Florida has gone "all in." And in many ways, that's a good thing. Natural gas, after all, is the cleanest fossil fuel available and can easily displace the need to burn more polluting and more expensive fuel oil.
But as competitive on price as gas is nationally, the average cost Floridians paid for it in 2007 was $9.24 a unit — the highest in the nation, and more than 25 percent higher than the national average ($7.31).
The fact that Florida imports nearly 100 percent of its natural gas isn't helping matters, either. Add to that the constant threat of hurricanes shutting down production and damaging transportation pipelines, and not only are Floridians paying a lot for their natural gas, we've also become increasingly vulnerable to the risk of running out of fuel. That's especially true on summer days, when the pipelines are full and cannot meet the peak demand.
Other states are well aware of this risk, and have taken steps to remedy it. California, which uses slightly more natural gas than Florida, stores close to 500 BCF of natural gas each year within the state. Texas stores almost 700 BCF, Pennsylvania more than 750, Illinois over 984. In total, 30 states store natural gas within their borders. Florida stores zero and yet our state is far more dependent on natural gas for electricity and far more vulnerable to pipeline shutdowns than anyone else.
When our state's demand for natural gas was half what it is today, the lack of storage capacity in Florida wasn't much of a concern. But those days are over, and our public policy needs to catch up with the reality of our current energy requirements.
Storage complements the existing pipeline system and allows us to more efficiently utilize the unused capacity we already pay for by bringing in more gas during the low-demand seasons, storing it and sending it out during peak times — just like states and countries do around the world. Adding pipeline capacity that would be under-utilized for years while waiting for demand to grow is far more expensive than utilizing storage facilities to meet incremental peak-day demand. In-state storage is a more efficient answer.
Florida's natural gas users paid approximately $700 million for new pipeline capacity in 2008, and that number is projected to grow to over $1.2 billion by 2012. But approximately 43 percent, or more than $500 million, of this pipeline capacity will go unused. In-state storage allows utilities to use capacity that is wasted today. Since utility ratepayers pay for 100 percent of pipeline costs regardless of how much gas is transported, we must better utilize our investment in these existing pipelines.
Storage allows our utilities to purchase gas when prices are low, store it and use it when prices are high — something that can't be done with pipeline capacity. And if we store more gas, we might not have to pay the highest natural gas prices in the nation.
Having natural gas on-hand and at the ready within our state is essential to ensuring both the security and efficiency of our energy network. It's critical that we take steps now to make certain our state's public energy policy reflects this new reality.
# David Batt is Director of Consumer Energy Alliance of Florida, former CEO of the Florida Phosphate Council, a former member of the Governor's Council for a Sustainable Florida and past chairman of the Economic club of Florida. E-mail him at dlbatt@comcast.net.
David Batt
tallahassee.com |
