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Regulatory Path Cleared for NiSource Gas Project

Twelve months after launching a national pipeline safety initiative aimed at repairing and replacing aging pipelines, Transportation Secretary Ray LaHood on Friday said his agency will lead the effort to expedite federal permitting for NiSource Inc.'s modernization of the Columbia Gas Transmission natural gas transmission and storage system.

"A year ago I asked pipeline operators to take a hard look at their infrastructure and identify those sections of pipeline that need to be repaired, rehabilitated or replaced to ensure safer and more reliable delivery of energy resources," LaHood said at a press conference in Pittsburgh. "And we are happy to help NiSource speed up construction and replace some of the oldest pipelines in the nation, ensuring good jobs and increased safety for people in Pittsburgh, as well as throughout Pennsylvania and the other states that will benefit from this project."

The Department of Transportation (DOT) will coordinate with other government entities to identify opportunities to remove overlaps and expedite the regulatory and approval processes without sacrificing safety or lowering industry standards.

"A modern pipeline infrastructure is crucial for the efficient and safe delivery of our nation's resources, and this is exactly the kind of project that government should help facilitate," said Cynthia L. Quarterman, administrator of DOT's Pipeline and Hazardous Materials Safety Administration, during the press conference. "We will help them work through the process, and make sure the project is constructed safely."

Beginning this year, NiSource plans to invest $4 billion over 10-15 years to modernize the Columbia Gas Transmission system in Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia, where most of the pipeline infrastructure is more than 40 years old and, according to DOT, "running on inefficient platforms." NiSource's plans to replace about 1,000 miles of large diameter pipeline "will promote the safe and reliable delivery of energy resources across the Midwest, Mid-Atlantic and Northeastern regions of the United States" and will create 7,000-8,000 direct jobs, DOT said.

Columbia Gas Transmission, which transports an average of 3 Bcf/d through a nearly 12,000-mile pipeline network in 10 states, also plans to modernize its compressor fleet and other related assets and systems.

In response to a series of headline-grabbing oil and natural gas pipeline explosions, LaHood last year launched a national pipeline safety initiative aimed at repairing and replacing aging pipelines to avert potentially catastrophic incidents (see NGI, April 11, 2011). The department's safety campaign followed two deadly pipeline explosions in Allentown, PA (see NGI, Feb. 14) and San Bruno, CA (see NGI, Sept. 13, 2010).

LaHood's announcement follows the Obama administration's recent embrace of natural gas development (see NGI, April 16; Jan. 30), and the executive order to improve performance of federal permitting and review of infrastructure projects that was signed by the president last month.

"At NiSource, we are pleased to play our part in this long-term, nation-wide commitment to enhancing America's core energy infrastructure," said Jimmy Staton, group CEO of NiSource's gas transmission and storage business. "We welcome the Department of Transportation's support in facilitating our investments through an efficient permitting and regulatory review process."

Pennsylvania Gov. Tom Corbett last year signed into law the Gas and Hazardous Liquids Pipelines Act, which directed the Pennsylvania Public Utility Commission to develop a registry and conduct safety inspections for all pipeline operators in the state. The commission also is required to track pipeline development in less populated areas where gas is transported from unconventional oil and gas wells.

"I commend Pennsylvania for making pipeline safety a priority by passing the Gas and Hazardous Liquids Pipeline Act," LaHood said Friday. "This is personal for all of us -- none of us ever want to see another tragedy like the one that happened in Allentown."

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