Gas line upgrade proposed for NY-to-Boston route July 7, 2013
STEPHEN SINGER,AP Business Writer
HARTFORD, Conn. (AP) — In another sign that natural gas is outpacing costlier heating oil, a Texas energy company is proposing to install new pipelines, replace others and build transmission stations in the heavily populated, 200-mile New York-to-Boston corridor.
The preliminary plan proposed by Algonquin Gas Transmissions, a unit of Spectra Energy in Houston, would build and replace about 44 miles of pipeline in Connecticut, Massachusetts, New York and Rhode Island, install a new pipeline to span the Hudson River in New York and build compressor stations to boost gas flow.
But reluctance by power generating companies to commit to the project has emerged as an early problem, and environmentalists who say natural gas is only slightly less dirty than other fossil fuels are protesting expanded gas pipelines.
The project, which would expand the current Algonquin system and affect hundreds of properties, would add 450,000 cubic feet of gas per day to the 2 billion cubic feet now piped in daily.
Intended to begin service Nov. 1, 2016, the larger system is "designed to deliver critically needed natural gas supplies that will meet immediate and future supply" in the Northeast, Algonquin said in its proposal to the Federal Energy Regulatory Commission.
"Converting home heating units and other appliances to natural gas represents a substantial source of growth in the region," Algonquin said.
It cites a new Connecticut law spurring natural gas hookups to nearly 300,000 residential and business customers over 10 years. Connecticut regulators are considering a proposal by the state's three gas companies seeking new rates spreading the cost of natural gas hookups over 25 years and other rate changes to encourage a large-scale switch to natural gas.
At least six other gas pipeline expansion projects — in Arkansas, Iowa, Nebraska, New Jersey, New York, Pennsylvania and Tennessee — are in the early stages of filing before federal regulators.
Until recently, much of the natural gas in the U.S. has come from Gulf Coast states, such as Texas and Louisiana. New sources of natural gas, such as the Marcellus Shale in New York, Ohio, Pennsylvania and West Virginia, now present additional opportunities to tap natural gas, said Cathy Landry, spokeswoman for the Interstate Natural Gas Association of America.
"We'll be needing to revamp lines slightly to access new areas," she said.
Burying pipeline in New England will be particularly difficult because it's a heavily populated region and utilities will have to negotiate rights of way and land deals with numerous property owners, Landry said. Environmental concerns such as wetlands also could force gas companies to reconfigure their plans, she said.
Another problem facing Spectra is attracting electric generating companies to commit to the pipeline. John P. Reddy, Spectra's chief financial officer, said at an industry meeting in May that the Algonquin project will supply markets served by natural gas companies, but power generating companies are balking.
"We're still working on cracking that," he said.
Dan Dolan, president of the New England Power Generators Association, said pipeline contracts typically require gas consumers to commit to taking gas every day for 20 years at a reasonably predictable rate.
"This simply doesn't work for gas generators," he said in an email.
Competition is daily, "making the ability to take predictable amounts of gas at best difficult if not impossible," Dolan said.
Environmental concerns also could be an issue. Hydraulic fracturing, or fracking, that led to booming production has stirred intense opposition from activists and property owners who link it to groundwater pollution and object to the high-impact operation. Gas line construction also is under fire.
"Pipelines are dependent on fracking and that's a nonstarter for us," said Seth Gladstone, a spokesman for Food and Water Watch, a consumer advocacy group. "The bottom line is we're dealing with a dirty fossil fuel that's contributed to climate change."
Craig Stevens, a resident of Silver Lake Township, Pa., and an opponent of increased use of natural gas, said he and other landowners with rights of way for gas line construction are fighting projects on issues such as payments and easements.
"The pipeline has got people more riled up than fracking because fracking doesn't happen right away, but they can put the gas in the pipeline now," he said.
Algonquin is undeterred, insisting in its federal request for approval that it's simply responding to demand.
The rush by local gas companies to bring in new customers "confirms the need for new pipeline infrastructure to support this growth," Algonquin said.