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Yemen attacks disrupt LNG supplies in Mass.

By Jay Lindsay
Associated Press / May 4, 2012
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BOSTON—Electricity grid managers are preparing for possible spring and summer power disruptions in the Boston area after attacks in Yemen destroyed a pipeline and cut back the local supply of liquefied natural gas.

LNG from Yemen is a tiny percentage of the abundant natural gas supplies in the U.S., but certain power generators in the Boston area and northeastern Massachusetts depend on it.

If power demand spikes or another local generator unexpectedly shuts down in May or June, the regional grid's ability to reliably produce electricity will be at risk, according to grid operator ISO New England.

"Because of this uncertainty, we've taken different steps to prepare to manage the power grid ... during the next few months," said ISO New England spokeswoman Ellen Foley.

Foley said the steps include suspending maintenance on transmission lines to keep them available and working with power generators to manage their LNG supply. Such generators might sometimes opt out of the daily power market so they're not operating continuously.

Also, ISO-New England could activate a program under which certain customers agree to reduce electricity use on request -- such as by turning down lights and using less air conditioning -- in return for payments.

"It's just as good as turning on a generator to produce supply," Foley said. "We're just reducing consumer demand."

Natural gas is moved by pipeline in gas form, or it can be liquefied, which enables producers to fit far greater quantities in far smaller spaces and transport it by tanker or truck.

Fueled by shale gas production, domestic supplies of natural gas are remarkably abundant. Today, the country is storing more than ever, and even debating exporting its own LNG, said Bruce McDowell, director of policy analysis at the American Gas Association.

But some regions in New England don't have the pipeline infrastructure needed to get sufficient quantities of natural gas to power generators, said Carol Churchill, a spokeswoman for Distrigas, which runs an LNG terminal in Everett.

"Pipeline capacity is limited, that's why we need LNG. The pipeline capacity just is not there in certain places to meet all of the demand," she said.

Distrigas, for instance, directly serves the Mystic Power Station in Everett and some of its gas is used at other power plants, she said.

The pipeline attacks in southern Yemen occurred March 30 and April 26, and the first has been linked to al-Qaida. In their aftermath, two shipments to the Distrigas terminal in May and June had to be canceled, Churchill said.

The shipments together were expected to total less than 6 billion cubic feet of LNG, or about 14 percent of the roughly 41.6 billion cubic feet of LNG that was delivered to Everett in 2011. Churchill said the company is doing what it can to replace the lost supply and minimize disruption to customers.

A terminal in Louisiana is the only other place in the U.S. that receives a significant amount of LNG from Yemen. It got about 12.5 billion cubic feet in 2011, less than a third of what Everett received.

Yemen's total LNG imports last year were less than the amount of natural gas the New England states consumed in just the first two months of 2012. So the LNG problem in Yemen won't have much more than a local impact, McDowell said.

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