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Perry again calls for US energy infrastructure plan, cites national security

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Platts Global Alert - Oil

Perry again calls for US energy infrastructure plan, cites national security

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Perry notes most military bases rely on civilian grid

States seen blocking key pipes, forcing reliance on LNG

Washington — US Secretary of Energy Rick Perry on Thursday reiterated his arguments that energy infrastructure is critical to national security, echoing a theme that has percolated in the national debate about whether new measures are needed to prop up coal and nuclear power plants and promote natural gas pipeline projects.

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"It is really important for us as a country to have an energy infrastructure plan in place because it is about the national security of this country," Perry said at an event held by the Consumer Energy Alliance. "Energy security is national security."

Perry added: "99% of the military bases in the continental United States are attached to our civilian grid."

After a long pause, he concluded: "Bam! Drop the mic!"

The national security narrative has come up time and again as the Trump administration has floated ideas to stave off the retirement of coal and nuclear power plants.

A leaked Department of Energy memorandum laid out a national security justification for using emergency authorities to prevent baseload retirements.

MILITARY BASES

And the chief of staff at the Federal Energy Regulatory Commission reportedly said it is working with DOE and other agencies to identify plants that are critical to ensuring that military bases, hospitals and other critical infrastructure can maintain operations in a disaster. FERC later clarified that it is providing technical support rather than aiding in developing policy.

When Perry spoke at a House of Representatives Science, Space and Technology Committee hearing in May, he questioned whether "states have the right to block a pipeline across their state that will have a national security implication or an economic implication on individuals."

On Thursday, Perry was asked to weigh in on New England's infrastructure constraints. "Why in the world today, with America being the number one oil and gas producing country in the world, would Boston and the Northeast have to have to rely upon gas from Russia? I don't get that," he said.

LNG IMPORTS

He was likely referring to the offloading of a tanker originating from Russia's Yamal plant during a cold snap last winter to replenish stocks at the Distrigas LNG terminal in Boston. New England leans on imported LNG to supply power plants during cold weather when the region's gas pipeline capacity is dedicated to home heating.

ISO-New England has proposed a cost-of-service agreement with Exelon to prevent the retirement of units 8 and 9 at the Mystic plant in Massachusetts, which provide about 1,400 MW of capacity and use LNG from Distrigas, rather than pipeline gas, for fuel supply.

PIPELINE POLITICS

Perry said politics in New York make it very difficult for US-produced gas to travel across the state. On a recent trip to Ukraine, Perry talked up US LNG as an alternative to Russian gas, "because the Russians are not necessarily reliable," he said, spurring chuckles from the audience.

"I would suggest that those that are making decisions in the United States that think somehow or another Russian gas is more reliable than US-produced gas, they might want to think about that," he said

Two major projects have been blocked by New York -- Williams' 121-mile, 650 MMcf/d Constitution Pipeline (CP13-499), and National Fuel Gas Supply and Empire Pipeline 's 97-mile, 497 MMcf/d Northern Access 2016 project (CP15-115). Both were denied water quality certifications. But FERC recently waived New York's Clean Water Act Section 401 review for Northern Access on the grounds that state regulators took too long to act.

-- Kate Winston, kate.winston@spglobal.com

-- Edited by Keiron Greenhalgh, newsdesk@spglobal.com