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State’s Dependence on Natural Gas Could Be Risky Business, Report Says

Union of Concerned Scientists cites NJ as one of 16 states too reliant on increasingly popular fuel for generating electricity

natural gas compressor

The state may be relying too much on natural gas to generate electricity, a strategy that poses significant financial risks for consumers, according to a new report released yesterday.

The state-by-state analysis by the Union of Concerned Scientists identified New Jersey as one of 16 states at high risk of over-reliance on natural gas. Since more and more of its electricity is produced by power plants using the fuel, that trend is likely to continue.

The study echoes many of the criticisms voiced by clean-energy advocates who fear the increasing use of the fossil fuel will exacerbate emissions contributing to global climate change and crowd out investments in renewable-energy sources, such as solar and wind.

“Natural gas has been important in moving the country from coal, but substituting our dependence on one fossil fuel for another isn’t going to pay off in the long run and poses problems for consumers now and later,’’ said John Rogers, senior energy analyst at UCS and a co-author of the report.

The Christie administration has been an unabashed advocate of natural gas, believing it could lower traditionally steep energy prices in New Jersey. That, in fact, is what has happened because of historically low prices for the fuel found in neighboring states, such as Pennsylvania.

That support also is reflected in the administration’s backing for various new gas pipelines in the state, much to the consternation to opponents of the projects.

“Clearly, the Christie administration’s energy strategy is gas, gas, and more gas,’’ said Doug O’Malley, director of Environment New Jersey. “Natural gas pipelines are a way to lock it in as the fuel of the future and increase carbon pollution.’’

The UCS is not anti-gas, Rogers said, indicating that the organization does see it having a role in the nation’s energy policy. But the report suggested an over-reliance on the fuel can lead to price swings, especially given its historic volatility, tied to increasing demand, extreme weather, and uncertainty about availability.

“The state is sort of doubling down on natural gas,’’ Rogers said. “States and utilities are gambling on natural gas, but consumers will ultimately pay for those bad bets.’’

Andrew Hendry, president of the New Jersey Utilities Association, disagreed. He said there are no expectations that natural gas prices will go up anytime soon.

Noting that natural gas is a cleaner-burning fuel than coal, Hendry said it is a “good thing we have a supply of natural gas, because there are economic and environmental benefits’’ to its use.

In its analysis, the UCS used a number of metrics to identify “high risks’’ relating to a state’s over-reliance on natural gas. New Jersey was one of 16 states to be designated as ‘’high risk’’ in three or more areas.

According to the analysis, those high-risk factors for New Jersey included the amount of the state’s electricity generation coming from natural gas. The report said 45 percent of the state’s electricity is generated from the fuel, a 13 percent increase since 2008.

The analysis also said another high risk factor is that the number is expected to grow, since 95 percent of the new or converted electricity capacity coming online in the next few years will be fueled by natural gas. That includes four new natural-gas-fired plants spread around New Jersey, and possibly the conversion of the former B.L. England coal plant to gas -- providing a new pipeline is approved by the state.

The final high risk factor is the amount of natural-gas capacity in the state: 12,800 megawatts.

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