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Energy Extracts a Significant Economic Cost

The reliability of our energy system "continues to be threatened until the region expands its pipeline capacity or invests in other energy sources." So stated ISO New England, the system manager that oversees the Massachusetts energy market.  Reliability and increasing costs, which we all have experienced, are certainly major concerns. But the real economic costs of lost jobs are seldom discussed when legislators voice concerns that cheap energy may flood the market and stop the attempts to advance renewable energy.

This is brought home in the below letter to the editor submitted to a local paper that elicited a response by a reader who noted that the most recent loss of 120-150 jobs at Wyman Gordon can be directly attributed to the high cost of energy for our area.  This is really a loss of over 500 jobs when you add in the economic multiplier for manufacturing of 2.5 jobs outside the factory for every job lost inside.

It seems strange that we are dealing with this issue when global oil prices have significantly declined, and natural gas is cheap and plentiful from vast underground reserves in Pennsylvania. Yet the solution to deal with this for some manufacturers is simply to move.

To voice your concerns, contact Tim Wilkerson, Regulatory Ombudsman and Director of Economic Development Policy for the Executive Office of Housing and Economic Development, at 617-788-3667 or [email protected].


Letter to the Worcester Telegram from Jack Healy, MassMEP

The May 10, 2015, Worcester Telegram editorial, "Power Surge," provided an excellent expose on how certain industries, like manufacturing, are seeing their futures threatened by the cost of energy in Massachusetts.

As our economy has begun to rebound, it is critical that we understand the role that energy costs play in assuring that businesses, especially in manufacturing, are competitive and successful. Manufacturing in this country began in New England and the Northeast. It has provided good jobs and wages that have allowed families to prosper. If manufacturing is to remain a feature of our economy, it is critical that our region has access to reliable and affordable energy.

New England is one of the most expensive regions of the country and, indeed, the world for energy costs. We are working hard to replace outdated and environmentally unfriendly sources of power with natural gas and other new technologies. While there has been progress, there is more that we can do if we want to balance supporting our manufacturing sector and a sound environmental policy. Alternative energy sources, like wind and solar, are a part of this plan but, they alone cannot meet today’s energy needs. Natural gas is essential to meet our energy demand. It is a clean, abundant, and cost effective power source.

Just 300 miles from New England sits one of the world’s largest known supplies of natural gas – Pennsylvania’s Marcellus Shale. This domestic natural gas would provide the manufacturing sector with the kind of reliable and affordable fuel needed to keep companies competitive and workers employed. While this natural gas supply is close, clean, and critical to meet our needs, we do not have enough existing pipeline to get Marcellus Shale gas here. Our economy is slowly recovering, but our manufacturing sector is in serious jeopardy of leaving the region and taking with it valuable jobs if we allow our energy needs to go unaddressed. The good news is that we can do something about this.

We need to expand our region’s natural gas pipeline so New England’s manufacturers can access this resource. In New York, the Constitution Pipeline makes this important connection. Constitution is FERC approved, with a secured right of way. The project is privately financed which means no tax dollars are needed to get this infrastructure built. Workers are ready to start building the pipeline but await final approval from New York’s Department of Environmental Conservation. As we wait, jobs are on the line; jobs that pay well, provide benefits, and a good economic future for workers and their families.

We all want a clean environment with jobs and financial security for families. Bringing domestic natural gas from Pennsylvania to New England helps us meet these goals. We hope that our neighbors in New York will support us and bring local, more affordable, domestic natural gas to New England. Businesses and families are depending on it.

Jack Healy is the President & CEO of the Massachusetts Manufacturing Extension Partnership (MassMEP). MassMEP is a collaborative center comprised of government, business, and academic partners dedicated to helping Massachusetts manufacturers meet the challenges of competing in an ever-changing economy.