Editor’s note: This commentary is by Steve Wark, the director of communications for Vermont Gas Systems in South Burlington.
“What is the fastest way to get natural gas service to Rutland?” This is a question Vermont Gas has heard many times during the public discussions regarding expanding natural gas infrastructure in the state.
The answer lies in one simple formula: Phase 1 + Phase 2 = Phase 3.
The combined economic and environmental benefits of the first two phases of the Addison Rutland Natural Gas Project make it doable for Vermont Gas to extend the significant public infrastructure advantages of natural gas to the residents and businesses of Rutland County. It’s also the fastest and most responsible way to help Rutland-area homeowners save up to $2,000/year, retain and create jobs, cut emissions, and transition to a cleaner and more affordable energy future. Allow me to explain.
There’s been much discussion about why International Paper (IP) appears to be the principal beneficiary of a Vermont-based infrastructure project. That sentiment misses the key points of how Phases 1 and 2 together benefit Vermont and make Phase 3 possible.
IP is paying the overwhelming majority – 96 percent, or about $71 million – of the Phase 2 cost to provide natural gas to its plant which also enables natural gas distribution systems in parts of Cornwall and Shoreham.
IP is investing $28 million for Phase 1 system upgrades and other improvements in Vermont.
These investments, plus ongoing revenue from selling natural gas to IP, keep rates low and are a welcome windfall for Vermont customers, not Vermont Gas. Combined with property tax payments to improve schools and fund municipalities, the money will be used to reduce rates, increase reliability and safety, and bring natural gas to Rutland as soon as possible.
Converting International Paper to natural gas will reduce greenhouse gas emissions by an astounding one million tons over 20 years, and almost completely eliminate particulate emissions from the plant when it stops burning approximately 19 million gallons a year of dirtier, more expensive fuel oil.
The proposed alternatives to pay for the infrastructure – public financing, loans and other debts – would mean Vermont taxpayers or ratepayers would be on the hook for tens of millions of dollars at a time when the state is dealing with serious economic challenges.
Without IP’s investments in Phase 2, investments that essentially upsize and extend the pipeline southward, bringing natural gas to Rutland could be delayed for up to 15 years. This is not a question of “access to capital.” The business case for the Phase 3 pipeline extension to Rutland, based on the potential natural gas sales/revenue from Rutland does not make Phase 3 a compelling project in the short term. Fifteen years is too long, much too long, for Rutland to wait.
The economic argument for natural gas expansion is very strong, and it’s only part of the project’s story for Vermonters.
Converting IP to natural gas will reduce greenhouse gas emissions by an astounding one million tons over 20 years, and almost completely eliminate particulate emissions from the plant when it stops burning approximately 19 million gallons a year of dirtier, more expensive fuel oil.
To put that in perspective, the reduction of greenhouse gas emissions is more than three times the total amount from Phase 1 (300,000 tons), thanks to one new customer. Converting the plant to natural gas is the equivalent of taking almost half the cars in Addison County off the road.
Vermont Gas already reduces energy use and saves $13 million a year for Vermonters through our energy-efficiency programs, and we will be increasing participation for everyone along the permitted project corridor, regardless of fuel source.
As proud environmental stewards, Vermont Gas is also supporting the development of renewable natural gas, solar energy, natural gas vehicle stations, and other programs to meet Vermont’s long-term renewable energy goals.
As Gov. Shumlin has pointed out, economic benefits, plus greenhouse gas and other emission reductions are “public goods” that must be considered when assessing the benefits of an infrastructure project. Serving IP dramatically expands the public good of this project.
While each phase alone merits support, together they form the most significant economic and environmental infrastructure project proposed, or underway, in Vermont. Using the simple yet powerful formula – Phase 1 + Phase 2 = Phase 3 – is the fastest and best way to get natural gas to Rutland.
Changing the equation would be bad for Vermont’s economy and for our environment.
