What happens if the Northeast doesn’t get the new natural gas transmission lines it needs?

It won’t be good, according to a new report released by the Institute for 21st Century Energy, an arm of the U.S. Chamber of Commerce. An already economically challenged region will fall further behind the rest of the nation.

The region already has some of the highest electricity rates in the U.S.—and that disadvantage will only get worse, according to the study, published as part of the institute’s Energy Accountability Series.

The report benchmarks the potential economic impact by asking a question: “What if pipelines aren’t built into the Northeast?” In the eight states examined— Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont—the report finds that the lack of additional pipeline infrastructure would cost over 78,000 jobs and $7.6 billion in GDP just by 2020.

“Environmental groups seeking to ‘keep it in the ground’ are fighting to block virtually every project that would bring additional natural gas into in the Northeast,” said Karen Harbert, president and CEO of the institute. “As a result, residents in the Northeast are paying the highest electricity rates in the continental United States, with no relief in sight if infrastructure is not built. High energy prices are costing the region jobs and income, so maintaining the status quo will be painful.”

According to the U.S. Energy Information Administration (EIA), Connecticut has the third-highest electricity rates in the nation, while Massachusetts ranks fourth, Rhode Island fifth, New Hampshire sixth, New York eighth, Vermont ninth and New Jersey 10th. Maine fared the best in the region at a still-pricey No. 11.

“Overall, Northeast residents pay 29% more for their gas than the U.S. average and 44% more for electricity,” the study found. “Industrial users in the Northeast pay more than double for their natural gas than the U.S. average, and 62% more for electricity,” it added. Using EIA’s historical price data, the report found Northeast residents can pay as 106% above the U.S. average gas price.

Yet nearby, continued development of the unconventional Marcellus and Utica shales in Pennsylvania, Ohio and West Virginia has helped reduce U.S. dependence on foreign energy, lowered costs and brought back thousands of manufacturing jobs, the report said. However, the lack of access to markets in the Northeast will cost those states jobs and tax revenue.

The Marcellus alone has emerged as one of the largest gas fields in the world, rivaling the South Pars Field that sprawls across the Persian Gulf and is shared by Iran and Qatar.

“Our country’s emergence as an energy superpower, and now even a net-exporter of natural gas, has generated broad-based economic benefits for all Americans, not just those who live in high-energy production states,” the report said. “But there’s one part of our country that continues to be deprived of the full measure of benefits and cost-savings that would otherwise be available if it was properly linked up in our nation’s vast and expansive natural gas pipeline network: the Northeast.

“Quantifying the ongoing costs of that isolation is the focus of [this] report. Not dissimilar to high energy prices in Europe, the Northeast’s relative lack of access to clean-burning, low-cost natural gas is largely self-imposed—a function of some state and local political figures prioritizing the wishes of environmental groups ahead of the needs and interests of their constituents,” it added.

The report quantifies financial impacts on the region and pointed out that the same environmentalist lobby that has stopped pipeline development also demands shutdown of the region’s five nuclear reactors, which will further increase electricity costs. First to go will be New York’s James A. FitzPatrick Nuclear Power Plant, now scheduled to go offline next year.

The resources the shale plays offer could be used to relieve capacity problems in the Northeast, but continued legal challenges and political opposition have stalled or slowed planned infrastructure projects such as the Constitution Pipeline and Access Northeast pipeline.

“As the regulatory and price environment continues to encourage the use of natural gas, Northeast states will find themselves increasingly starved of the energy needed to power the economy and keep the lights on,” said Harbert. “Our analysis demonstrates that there is simply not enough capacity to meet demand, and families, consumers and businesses will all pay the price.”

The report’s economic impact analysis estimated the potential effects over the next four years and included all recently announced pipeline projects. To estimate economic impacts, the report used publicly available economic data from announced pipeline projects, energy demand forecasts, and announced retirements of nuclear generators.

The inputs were run through the IMPLAN (impact analysis for planning) model to estimate the overall macroeconomic effects of preserving the status quo, which effectively prevents new pipeline infrastructure from being developed in the region.

The institute’s Energy Accountability Series takes a substantive look at what could happen if various energy proposals from political candidates and interest groups, such as a ban on hydraulic fracturing, were actually adopted.

Paul Hart can be reached at pdhart@hartenergy.com.