American Energy Coalition Takes Aim at Natural Gas Industry

Natural gas isn’t all it’s cracked up to be: That’s the main message of the American Energy Coalition, founded five years ago by a group of fuel oil dealers.

‘AEC is trying to counter the national marketing campaigns of the natural gas industry,” said Tom Tubman, executive director of the coalition, and a former executive with Carlin Combustion Technologies, Inc., East Long Meadow, Mass.

The effort by the coalition includes creating a regional marketing campaign, ‘because the oil industry has never had anything other than a state-by-state marketing-advertising approach,” Tubman said. The marketing goal is to send out a ‘constant, sustained, unified message,” he said. The coalition has run radio spots in a four-week fall marketing campaign in fuel oil markets throughout the Northeast. The coalition is funded through donations from companies in the fuel oil industry, as well as the Oil Manufacturers Association (OMA), whose members make fuel oil-fired equipment.

The AEC’s mission includes debunking claims by the natural gas industry that the AEC considers ‘not always factually correct,” said Tubman.

Contrary to claims that natural gas is ‘clean, efficient, dependable and environmentally friendly,” a number of studies and reports ‘suggest none of those attributes are true and or correct,” Tubman said. He said natural gas is 95 percent methane and is a more potent greenhouse gas than carbon dioxide.

Leakage from natural gas pipelines is particularly problematic ‘ and ends up being costly for consumers, the AEC, Tubman and others said.

‘The pipeline operators are not motivated to repair the leaks because they don’t own the gas going through the lines,” Tubman pointed out. The operators charge a fee to move the gas through their pipelines, Tubman said. The pipeline operators’ view, according to Tubman, can be summed up thusly: ‘If it’s not their gas and they don’t have to pay for the losses, why should they fix the leaks?”

But nor do the natural gas utilities bear the cost of the gas that leaks away, Tubman said.

‘It’s called ‘lost and unaccounted for gas’ ‘ that’s the term that you’ll usually find within a utility’s PUC [public utility commission] filing,” Tubman said. Utilities, he said, ‘measure the amount of gas that comes into their system, and then they measure the amount of gas that the homeowner uses, and the difference is ‘lost and unaccounted for gas.’ The cost of that is spread amongst all of their ratepayers.”

In August, Senator Edward J. Markey (D-Mass.) issued a report, ‘America Pays for Gas Leaks.” In a statement accompanying the release of the report, Markey said, ‘Leaky natural gas pipelines are costing U.S. consumers tens of billions of dollars for fuel that never reaches their homes.

‘In many cases natural gas companies are not replacing their old pipeline infrastructure and [are] passing along the costs of lost gas to consumers. In 2011 alone, gas distribution companies reported releasing 69 billion cubic feet of natural gas to the atmosphere. That is almost enough to meet the state of Maine’s gas needs for a year and equal to the annual carbon dioxide emissions of about six million automobiles. Nationally, consumers paid at least $20 billion from 2000-2011 for gas that was unaccounted for and never used.”
Markey went on to point out that, from 2002 to 2012, ‘almost 800 significant incidents on gas distribution pipelines – including several hundred explosions – killed 116 people, injured 465 others, and caused more than $800 million in property damage.”
Markey said consumers ‘shouldn’t have to pay for billions of dollars in fuel that never even makes it to their homes. ‘Every leaky pipeline is like a hole in consumers’ pockets. We need to speed up the replacement of old natural gas infrastructure to reduce accidents, pollution, and waste.”
The report uses Massachusetts as a case study, finding that a few companies are responsible for the lion’s share of leaks. Three companies, Boston Gas, Colonial Gas, and Nstar Gas, accounted for 80 percent of these passed-on costs from 2000-2011, according to the report.
As a group, Boston Gas customers paid the most, covering an estimated $352 to $781 million in unaccounted for gas costs, followed by Nstar Gas customers at $109 to $229 million, and Colonial Gas customers at $92 to $221 million.
On a per customer basis, Westfield Gas & Electric customers paid the most (about $304 to $2,426 per customer) because of the company’s small customer base relative to its unaccounted for gas levels. Boston Gas, New England Gas, Nstar Gas and Essex Gas customers each paid over $370 to $875 on average in lost and unaccounted for gas costs from 2000-2011.

Drawing attention to such practices by the natural gas industry is part of the AEC’s attempt to preserve oil heat in homes, Tubman said. ‘We’re trying to limit any further conversions to natural gas,” he said.