After roughly two years of work met by steady public and political opposition, energy company Kinder Morgan has suspended plans for a Northeast natural gas pipeline.The Houston-based company says it is stopping work and expenditures on the $3.3 billion pipeline that would have run from Wright, NY through Massachusetts and New Hampshire ending near Dracut, Massachusetts. The company’s public affairs director Richard Wheatley says Kinder Morgan was impacted by current energy market conditions and financial instability of counterparties.
“We spent more than two years on the project and unfortunately just did not receive the additional commitments that we initially expected,” said Wheatley.
In its November 2015 filing with the Federal Energy Regulatory Commission, Kinder Morgan reported it had reached agreements with at least seven New England distribution companies for more than half a billion cubic feet of gas per day. The 30-inch pipe has the capacity to deliver roughly 1.3 billion cubic feet per day. Wheatley says the company had received more commitments since then. Company vice president of public affairs Allen Fore expressed confidence throughout the planning that more contracts would roll in.
“I am not aware of a project that after we start the process that we have pulled out of, unless there’s a significant change like a commercial change of some sort, or that FERC has rejected,” Fore said. “Because we’re not like every other company. Some companies may go through an application process simply to test the waters. We don’t do that. Once we start this process, we plan to finish the process.”
Still, Wheatley says the company did not overestimate the need for additional gas capacity in New England, which was the main reasoning behind the project.
“We’re still projecting quite a jump over time in the need for additional gas capacity to serve New England,” Wheatley said. “There may be valleys, spikes and peaks where additional supplies may or may not be needed in the quantities that may be predicted long-term. But over time the local gas and electric distribution companies will need additional gas capacity for the region.”
Berkshire Gas was one of the local companies that signed onto the project. Vice President of Corporate Communications Michael West of parent company Avangrid says the year-long moratorium on new Berkshire Gas customers in parts of Franklin and Hampshire counties will continue now that the pipeline is suspended.
“We are hopeful that a permanent solution to the region’s gas constraint issues can be resolved in short order, but at this stage we haven’t found another alternative that can do that,” said West.
West says increasing the company’s storage capacity is not a permanent solution.
Thousands of people throughout New York and New England challenged the pipeline, which in its entirety would’ve started in Pennsylvania and cost about $5 billion, for much of the past two years through established organizations or by forming new ones. Gaining support from a number of their political representatives, grassroots opponents fought the project step by step including a change that moved the route north and into New Hampshire. Katy Eiseman is president of the Pipe Line Awareness Network for the Northeast.
“The fact that there has been so much resistance since before they even announced the project clearly has had a huge impact on the way the project has developed, redeveloped and folded,” said Eiseman.
Although Wheatley says public and political pushback did not factor into Kinder Morgan’s decision, Eiseman says the opposition plays a role in economics. Calling the project suspension something to celebrate, she says pipeline opponents need to remain vigilant.
“It’s really a many-headed hydra and those heads can grow back,” she said. “So we have to see whether Kinder Morgan comes back with a reconfigured project. There is still the Connecticut Expansion as well as the Spectra project on the other part of the state [Massachusetts].”
Massachusetts State Senator Ben Downing says he was surprised to hear about Kinder Morgan’s decision. The Pittsfield Democrat has opposed the pipeline. He says the move gives him optimism in the battle against climate change as state lawmakers tackle an omnibus energy bill also meant to cut costs.
“The reasoning behind Kinder Morgan not moving forward – their stated reasoning that they had trouble signing up customers – I think shows us that there is little need or at least there isn’t the need that Kinder Morgan perceived and that there is a real opportunity to cement a clean energy future.”
Wheatley says the decision does not affect any other Kinder Morgan projects such as the Connecticut Expansion Project that would run through constitutionally-protected land in southern Berkshire County. With no firm number on how much has been spent on the Northeast Energy Direct pipeline, he says the company is looking at how to proceed with the FERC process consistent with its contracts for the project.
“Our goal is to work with customers and explore alternative solutions to address their needs and help them assess and find capacity and provide that capacity if possible,” said Wheatley.
Click here for WAMC's previous coverage of the Northeast Energy Direct Project.
