Kinder Morgan cancels controversial pipeline

For the Gazette
Published: 4/20/2016 5:14:42 PM

Tennessee Gas Pipeline Co.’s $5 billion Northeast Energy Direct project, which would have cut across Plainfield in Hampshire County and eight Franklin County towns, was canceled Wednesday — surprising many of the hundreds of people who for months have built a cascading opposition to the natural gas pipeline.

The announcement that parent company Kinder Morgan had “suspended further work and expenditures” on the project, “as a result of inadequate … commitments from prospective customers” confirmed one of the chief arguments that had been made by those who questioned the need for its proposed 1.2 billion cubic feet a day capacity.

It also came as both proponents and opponents awaited word of a Berkshire Superior Court decision on TGP’s related Connecticut Expansion Project, which will likely determine whether a two-mile swath through Otis State Forest in Sandisfield will be allowed despite Article 97 of the Massachusetts Constitution granting protection to state conservation land. The 13.7-mile pipeline looping project is expected to continue, said Kinder Morgan spokesman Stephen Crawford.

Article 97 was seen by many in Franklin County as a major legal bulwark against the NED pipeline, which was to run through much state protected land.

The 416-mile NED pipeline, which would have run from Pennsylvania shale gas fields northward to Wright, N.Y. and then eastward through Berkshire and Franklin counties and southern New Hampshire to Dracut, had been scaled back in size since July 2015 from its initial 2.2 billion cubic feet per day size to up to 1.2 billion cubic feet per day and the diameter of the pipeline from 36 to 30 inches.

The $3.3 billion investment in that “market path” — which would have crossed Ashfield, Conway, Shelburne, Deerfield, Montague, Erving, Northfield and Warwick, — was designed, the company said, “to help alleviate New England’s uniquely high natural gas and electricity costs caused by severely limited natural gas transportation capacity currently serving the region.”

Kinder Morgan said its project “was based on existing contractual commitments at the time by local gas distribution companies to purchase natural gas … as well as expected commitments from additional (gas distributors), electric distribution companies” and other customers.

Lack of customers

But a press statement Wednesday by Kinder Morgan’s Boston public relations firm announced, “Despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected. As a result, there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured.”

“That’s exactly what we’ve been saying,” said state Rep. Stephen Kulik, D-Worthington, when he learned of NED’s demise. We finally got through to them. I’ve always felt that what would kill the project was the economics of it. There were excellent arguments concerning public health and safety, but Kinder Morgan’s sole purpose is to make money.”

He added, “This is excellent news for the region. I hope it’s the final word on the project.”

The pipeline, which until late 2014 had been planned to continue across Warwick, Orange and Athol, was met with a groundswell of grassroots opposition almost from the day municipal officials began learning of it in early 2014. Fifteen Franklin County towns adopted resolutions against the pipeline, 11 towns joined a municipal coalition locally, along with coalitions of land trusts and other environmental organizations.

Not needed

From the outset, a chief argument that opponents made against the pipeline was that it was simply not needed, despite the company’s rationale that the region’s natural gas capacity had to be expanded. The need — which critics argued was only centered on several days of winter peak demand, when electric generating plants might not be able to get adequate supply for the growing number of gas-fired generating plants — could be met in other ways, said opponents.

A study commissioned by Massachusetts Attorney General Maura Healey agreed that additional pipeline capacity was not needed.

And comments by Franklin Regional Council of Governments filed in January to the Federal Energy Regulatory Commission, which regulates interstate pipelines, echoed the argument:

“Because the company has failed to demonstrate sufficient need for NED to justify either ‘the substantial adverse impacts to the environment and communities, or the taking of private and municipally owned property and state constitutionally protected parklands ... the Commission should find that the project will not serve the ‘present or future convenience or necessity,’ and deny the application.”

‘Game changer’

State Senate President Stanley Rosenberg, D-Amherst, called the company’s decision “a game changer,” pointing to the need for the state to focus on a comprehensive approach to reducing energy costs while increasing renewable energy capacity.

Referring to Berkshire Gas. Co.’s moratorium on accepting new customers until NED was built to augment its supply, Rosenberg added, “For many months now, I’ve been pressing Berkshire Gas to articulate what their ‘Plan B’ would be … I now urgently call on Berkshire Gas to implement industry-standard practices to lift the moratorium which constrains economic development in the region. Those alternatives include increasing use and storage of liquid natural gas, compressed natural gas, or propane, as well as reducing existing leaks, in order to lift the moratorium immediately.”

A spokesman for Berkshire Gas, whose parent company is also an investor in NED, told The Recorder on Wednesday that it plans to continue its moratorium.

Kinder Morgan’s statement also blamed the failure by New England states to establish regulatory procedures to allow electric utilities to commit to investing heavily in pipelines for additional gas supplies . It also faulted “current market conditions and counter-party financial instability” to assure the pipeline’s future.

“Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds,” it said.

When it comes to the formal application to the Federal Energy Regulatory Commission for NED, Crawford said, “The company is trying to determine how best to proceed with the FERC process.”

Supporters of the pipeline, who sometimes showed up at hearings dominated by opposition voices, included some members of the construction trades who argued the project meant local jobs.

Another legislative opponent of the project, state Rep. Paul Mark, D-Peru, said, “The decision by Kinder Morgan to suspend work on the pipeline is a testament to the strength and determination of the people of Berkshire and Franklin counties. When Western Massachusetts stands up for something we believe in and works together towards a common goal, even against incredible odds, victories like this are always possible.”

Work continues

Kathryn Eiseman, director of Massachusetts PipeLine Awareness Network and president of PipeLine Awareness Network for the Northeast, Inc. said “We’ve heard rumblings over the past couple of months that things were amiss – including layoffs and the lack of surveying activities. Nobody quite believed it for a while, and we should always remain vigilant. Even if NED is gone, they’re always looking for ways to come back and build market share. The work continues.”

Jed Proujansky of Northfield, who coordinated a municipal coalition that represents 11 Franklin County towns and is part of a troika of coalitions that he said combined represent 300,000 residents in Massachusetts and New Hampshire, said, “This is wonderful news. It’s good for Massachusetts, New York, Pennsylvania and New Hampshire … and for our plans to produce environmentally sound energy solutions.”

Conway attorney Thomas Lesser, who has done legal work for the pipeline awareness networks, and has represented potentially affected landowners, said, “This is a great victory for the people. It’s a true testament to what ordinary people who band together can accomplish. Kinder Morgan would probably never acknowledge that what also halted the project was universal opposition throughout the commonwealth.”

“I’m stunned,” said Meg Burch of Conway’s Ad Hoc Pipeline Advisory Committee. “When people work really hard against something that’s not quite right, we actually do have power as people. We talked about protecting our commonwealth and what we value about our communities. It’s a huge testament not just to the hard work, but the thoughtful, really intelligent work that people did that made a difference.”

Burch, like others, said that part of her questions whether the project is truly gone for good, but in any case, she added, “It does feel like a little bit of a reprieve.”

Electricity tariffs

Rosemary Wessel of the group No Fracked Gas in Mass. agreed that while NED may be no longer, getting resolution over the Article 97 question remains a concern, especially since Otis State Forest could be affected as well as property along Spectra’s Access Northeast pipeline route in eastern Massachusetts.

Also a concern, Wessel said, is the electric utility tariff that was put in place by the state Department of Public Utilities to help make long-term investments in pipeline capacity that may not be needed,

“Our work is not done,” Wessel said, adding that a benefit planned for Saturday night at the Montague Retreat Center to raise money for pipeline opposition will now become something of a celebration.

Wessel said she believes that concerns about opposition slowing down the project and ultimately threatening it played a role in seeing it ended.

“We were specifically actors in the regulatory process, and have been very, very engaged with legislators and the regulatory process, and I think they realized that as much as they lobbied, we weren’t going to go away.”

TGP’s Connecticut Expansion Project through Sandisfield still faces civil disobedience protests from opponents, said Wessel, adding that learning what it takes to work against the pipeline project has been a helpful tool for the future.

“We want to turn our energies to make sure we don’t face this again,” she said.


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