A published news report indicating that the Department of Energy(DOE) has entered into discussions with FERC over the merits ofconstructing the East-bound Independence Pipeline is false, theCommission and DOE said.

The DOE has contacted FERC as part of a study that it’sconducting into alternative energy sources for the Northeast, “butwe have not discussed the merits of any specific case with DOE,” aCommission spokeswoman stressed.

The news article “inferred” Energy Secretary Bill Richardson”was supporting one commercial venture,” namely IndependencePipeline, “over another, and that’s simply not true,” a DOE pressaide told NGI. The secretary “is interested in energydiversity…..There’s no relationship between DOE andIndependence.”

The inaccurate report comes in the wake of Richardson’sannouncement last month that DOE at the request of PresidentClinton was undertaking a 60-day study of ways in which to reducethe Northeast’s reliance on high-priced heating oil, placingspecial emphasis on improving access to gas supplies (See NGI DailyGas Price Index, 2/18/00). At the time, Richardson said he wouldseek out the help of Congress if the study revealed more gaspipelines were needed for the Northeast.

At a Capitol Hill hearing recently, however, Senate EnergyChairman Frank Murkowski (R-AK) underscored the disparity in theClinton administration’s policy with respect to natural gas. “Youtalk about…natural gas pipelines[s] and natural gas,” but “youradministration just basically sunk that gas pipeline [IndependencePipeline] to the Northeast,” he told Richardson.

While the DOE, on one hand, examines the need for possiblyanother gas pipeline to the Northeast, the Commission, on the otherhand, has made the Independence gas project “uneconomic with theirdemands,” Murkowski said.

FERC has demanded that the sponsors of Independence “showcontracts for more of their gas than had been required for otherpipelines in the past. It [has] required 14 new conditions and 102environmental conditions…..If that is suggestive of an aggressiveposture to try and reduce dependence on heating oil to the benefitof gas, well, the proof is certainly not in the pudding, Mr.Secretary.”

The Commission conditionally approved the Independence Pipelinein mid-December, but it is withholding its certificate until it andan associated pipeline expansion — SupplyLink — can furtherjustify market demand for their projects. The proposed 400-mileIndependence line would bring in competitive Canadian gas suppliesfrom Chicago to East Coast markets. The project, which wouldcriss-cross several states, has been hotly contested by landowners.

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