During the week of March 16-21, employers and local officials all over Massachusetts were urging – and in some cases requiring – workers to stay home in order to stay safe and healthy. On March 23, Governor Charlie Baker made it official: “all businesses and organizations that do not provide ‘COVID-19 Essential Services’ [must] close their physical workplaces and facilities to workers, customers and the public as of Tuesday, March 24th at noon until Tuesday, April 7th at noon.”
But guess what construction project is marching ahead unimpeded by health and safety concerns: The Weymouth gas compressor station!
This is a project for which even in-state gas utilities admit there is no market in Massachusetts. It’s a project that nobody could possibly characterize as urgent. But construction is proceeding every day, even as litigation against the project is moving ahead and even as Massachusetts is shutting down due to the coronavirus pandemic.
So, why is this happening? Well, in the here-and-now, it’s because Governor Baker’s emergency order exempts “construction of critical or strategic infrastructure” including “gas, electrical, nuclear, oil refining and other critical energy services.” No mention of renewable energy projects, of course. Now, you could argue that the Weymouth compressor is neither strategic nor critical to the health and economic wellbeing of the Commonwealth –and you would be right – but the way the order is phrased clearly allows the project to move ahead.
In our last post, however, we promised to provide a larger, and longer-term, explanation of why fossil gas companies are pushing “zombie” projects like this all across Massachusetts: gas pipelines, compressor and metering stations, and LNG tank farms for which there is no need (since demand for gas in is already going down).
The reason is that the regulatory agencies that control gas utilities, like the Federal Energy Regulatory Commission (FERC), the Massachusetts Department of Public Utilities (DPU), and the Massachusetts Energy Facilities Siting Board (EFSB) believe that their job is promote energy supply without any regard to how clean that energy is or whether there might be cleaner, cheaper ways to get it. And once they approve a project – as they almost always do – their regulations allow a guaranteed profit margin to the builders of that project, even if, down the road, the new facility becomes obsolete or is proven unnecessary. This is how the industry makes its money.
Once they get their permits, the gas companies know that the cost of construction, including that built-in profit margin, will be factored into the rates consumers must pay for gas – even if gas demand continues to fall and the bulk of their energy comes from renewable sources. Thus, under the current rules, it’s always profitable to add new gas infrastructure. It’s much more profitable than fixing leaks: customers have to pay for leaked gas even though they never get to use it.
Both from a cost perspective and an environmental perspective, it’s crazy to build more gas infrastructure. Yet the regulatory system we have now gives gas companies an incentive to keep their zombies marching, anyway – even during a time when workers are supposed to stay home and stay safe.