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Is a $103 million expansion of natural gas service the best MD can do?

Maryland’s Republican governor has taken a succession of actions on climate change that put him in stark contrast to President Donald Trump and many in his party’s leadership. Gov. Larry Hogan pushed to ban hydraulic fracturing for natural gas. He has pledged his support for the Paris Climate Agreements. He opposes off-shore drilling. And he supported higher standards for the Regional Greenhouse Gas Initiative, the market-based program that caps power plant emissions in Maryland and eight other states.

But there have also been limits to the governor’s environmental stewardship, particularly when it runs afoul of his “Maryland is open for business” mantra. Two years ago, Mr. Hogan vetoed legislation that requires energy companies to buy more electricity from renewable sources such a wind and solar. The legislature overrode him. Now, the Hogan administration is championing a $103 million fund to expand natural gas service across Maryland as well as the Potomac Pipeline sought by TransCanada that would run under the Potomac River and C&O Canal near Hancock in Western Maryland.

Environmental groups have charged the governor with blatant hypocrisy because both projects would appear to accommodate fracking in neighboring states. If fracking was judged too hazardous in Maryland, why is buying gas from fracking operations in Pennsylvania or West Virginia much better? What’s especially troubling is the $103 million fund which the Hogan administration has linked to Maryland Public Service Commission approval of the purchase of Washington Gas by Canada-based AltaGas, Ltd. Much of that fund would likely come from ratepayers (as much as $70 million), not shareholders.

Maryland Environmental Secretary Ben Grumbles argues that natural gas is a bridge fuel to cleaner energy in the future, a philosophy that aligns with what the Obama administration espoused as well. Better to put more Marylanders on natural gas than home heating oil or propane. And he points to the transition in the power sector away from coal and toward natural gas as the chief reason Maryland is on track to make its 2020 goals on reducing greenhouse gas emissions.

He has a point, but those arguments also ignore a couple of realities. First, it appears fracking drill sites are producing more methane leaks than had been acknowledged. A recent analysis by the Environmental Defense Fund found that oil and gas sites in Pennsylvania discharge five times more methane into the atmosphere than previously reported. And because methane (the main component of natural gas) is a more potent greenhouse gas than carbon dioxide, these leaks are the equivalent of 11 coal-fired power plants in near-term climate pollution, according to the report. Don’t expect much action on such leaks from the Trump administration, which earlier this month proposed repealing 2016 limits on methane discharges at drilling sites on federal land (although that repeal was temporarily delayed by a federal court judge late last week).

But even if Mr. Grumbles is correct, why not let AltaGas pay for gas expansion? Why make it part of the PSC settlement? The secretary may argue the environmental benefits of expansion, but there’s an even better environmental use available. Instead of expanding Maryland’s natural gas network, why not repair the existing leaks? That would seem to target two birds with one stone: Not only would ratepayers derive benefit from that spending (the pipes have to be replaced at ratepayer expense eventually anyway), it would reduce greenhouse gas emissions from leaking pipes while potentially reducing the need for fracking because less gas would be wasted.

Even Mr. Grumbles acknowledges that replacing leaking pipes is a worthy goal. But it isn’t a cheap one. In New Jersey, the cost of pipeline replacement has been estimated at $1.3 million per mile, and that state’s PSC recently authorized a $905 million project to replace 510 miles of pipeline. How much of a jump start might $103 million provide in Maryland? Well, at least 79 miles, a modest beginning given that Baltimore Gas and Electric Co. alone operates 7,100 miles of natural gas pipeline. But at least it would be a start.

That would seem to be a better purpose than helping “kick-start a natural gas expansion” throughout Maryland, as the Maryland Energy Administration has touted the proposed AltaGas settlement. Accommodating fracked gas clearly isn’t as bad as allowing fracking in the state, but it is, pardon the expression, in the neighborhood. And while yes, natural gas is better than some other fossil fuel choices under certain circumstances, it would make more sense to devote resources to a win-win and clean up existing pipeline before helping a Canadian company expand its service in more rural parts of the state.

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