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New York Again Shuts the Door on Natural Gas, Denies Transco Expansion

New York regulators are once again threatening to strand 400 MMcf/d of natural gas in Pennsylvania by denying Transcontinental Gas Pipe Line Co. LLC’s (Transco) Northeast Supply Enhancement Project a water quality certification (WQC).

Transco vowed Monday to resubmit its application. But similar decisions by the New York State Department of Environmental Conservation (DEC) have left more than 1 Bcf/d of Appalachian pipeline projects in regulatory limbo.

DEC said Transco’s application, which was filed in June 2017, was incomplete. It also said that FERC’s ongoing environmental review could result in changes to the project. About a month after the application was filed last year, DEC told Transco that its application was administratively incomplete, pending the project’s draft environmental impact statement (DEIS) from the Federal Energy Regulatory Commission. 

FERC issued a favorable DEIS last month, but DEC said it has until May 14 to comment on the document. The department also said it would not ultimately have the information it needs to make a determination about the application within the one-year statutory deadline because a final environmental impact statement won’t be issued until September 2018.

Transco parent Williams said it’s been working closely with the DEC for the last year to satisfy requirements for a WQC. Prior to the denial, DEC “informed the company that it required additional time to complete its review of potential water quality impacts beyond the statutory permit review period,” spokesperson Christopher Stockton said. “Williams, with the support of our customer National Grid, fully intends to resubmit the project’s 401 WQC application so that the agency can continue its permit evaluation and provide the clearances ncessecary to construct this critical piece of pipeline infrastructure.”

The nearly $1 billion project would expand Transco to increase natural gas deliveries to National Grid -- the largest distributor of natural gas in the Northeast. The project is designed to create 400 MMcf/d of incremental firm capacity to Northeast markets, primarily to feed demand for gas in New York City, which is phasing out the use of No. 4 fuel oil to help curb emissions.

Williams said National Grid estimates that the Northeast Supply Enhancement Project could displace more than 3 million gallons of heating oil and help reduce annual emissions. The utility is already investing more than $200 million per year to convert its customers from oil to natural gas in New York City and Long Island, Williams said.

The expansion would include 10 miles of pipe in Pennsylvania, three miles in New Jersey and 23 miles of pipe offshore New Jersey and New York in addition to a compressor station in Franklin Township, NJ, and more horsepower at an existing station in Pennsylvania. It would link gas from Transco’s compressor station 195 in York County, PA, to its offshore Rockaway Transfer Point, an existing interconnection between the underwater Lower New York Bay Lateral and the Rockaway Delivery Lateral in New York waters.

Of particular concern to the project's opposition is the 23-mile segment of new pipeline that would cross Raritan Bay from Old Bridge, NJ, to Rockaway Point in Queens.

In its denial letter, the DEC said that part of the project “could have significant water quality impacts in New York state.” The agency also added that construction could also impact Atlantic sturgeon and other protected species.

Transco was targeting a December 2019 in-service date, but it’s unclear how Friday’s decision would affect the timeline. It’s also unclear how long another application review would take. The agency noted Monday, however, that it has up to one year from receipt of an application to make a decision. 

The DEC said other portions of the current application, including those for endangered/threatened species and excavation permits are also incomplete “pending the receipt of specified additional information by the department.”

Friday’s decision was the fourth time the agency has denied a WQC application for a natural gas pipeline project. It has rejected applications for the Constitution Pipeline, which Williams is also sponsoring; National Fuel Gas Co.’s Northern Access expansion project; and Millennium Pipeline Co. LLC’s Valley Lateral project.

Only the Valley Lateral was allowed to proceed, after Millennium challenged the state’s decision. The other projects are still battling to advance in federal courts. The Northeast Supply Enhancement project will similarly need a WQC before it can proceed.

The denial also comes at a time when Gov. Andrew Cuomo is running for a third term. Late last year, environmental organizations unsatisfied with his climate protection efforts, which include a ban on high-volume hydraulic fracturing, launched a campaign pressuring the governor to do more. His Democratic primary opponent, actress Cynthia Nixon, has already called for a ban on natural gas pipelines and power plants, as well as a carbon tax and an emissions-free economy by 2050.

 

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