Gas Pipeline Rush is Alive, Well in NW

Nature's severe downturn in the amounts of hydroelectricity in the western region over the past 12 months has been a giant wake-up call for natural gas as new gas-fired power plants are spurring an unprecedented rush to build added interstate pipeline transmission into Washington and Oregon.

PG&E Gas Transmission Northwest (GTN) announced it has new binding precedent agreements with 25-year terms totaling about 250 MMcf/d based on a open season concluded in mid-June in the Pacific Northwest. This is for an expansion in 2003 and is in addition to earlier announced expansions for next year, which are currently pending before the FERC and will add about 200 MMcf/d of firm capacity to the system. New power generation makes up almost all the growth to be served by the expansions.

Williams' Northwest Pipeline last week announced yet another expansion--its fourth in less than a year--in the state of Washington, all involving proposed new electric generating plants and collectively representing hundreds of millions of new daily capacity into a state that used little other than wood and hydroelectric energy until the last few decades of the 20th Century.

"We knew there was interest in an expansion on our transmission system in the Pacific Northwest," said Kirk Morgan, director of business development for Northwest. "The advantage of this [Evergreen Pipeline] project is that Williams is able to get a large volume of natural gas to electric generation facilities where it is critically needed using existing Northwest Pipeline facilities and rights of way."

Williams held an open season in December to test the market for the Evergreen project. It plans to file an application for a FERC certificate in September. Construction is slated to begin in summer of 2002 with an in-service date of June 2003. The $200 million, 276-MMcf/d, 26-mile pipeline expansion is designed to deliver fuel several new power plants in western Washington.

Northwest already is pushing ahead with plans for three other pipeline expansions:

  • Nine miles of 20-inch diameter pipeline, the Everett Delta Project, will be completed in August 2002, bringing 86 MMcf/d of new gas supplies to fuel a power plant under construction by an affiliate of Florida Power and Light, FPL Energy, in the fastest growing area in the state, Snohomish County, on former industrial property owned by Weyerhaeuser.
  • A 50-mile expansion, the Grays Harbor Lateral, in the area around the state capital of Olympia, WA, to serve a 600 MW, combined-cycle power plant (Satsop Development Park) Duke Energy intends to build. The $75 million project is schedule to be completed in November 2002.
  • The Georgia Strait Project in far northwest Washington will extend underwater to Vancouver Island in British Columbia. It includes 84 miles of new pipeline to two new power plants slated to be built. The $159 million expansion and joint effort between Northwest and BC Hydro is scheduled to be completed in the fall of 2003; federal approvals on both sides of the Canadian border were applied for last spring.

Underscoring this effort by Williams and the similar proposed expansions by PG&E GTN is the well-recognized fact that the Pacific Northwest region historically relied too heavily on one energy source--hydro. Officials at the Northwest Power Planning Council and within the individual energy companies headquartered in the region are now hooked on new gas-fired generation as are all of the western states.

"The overwhelming reason for high power prices is scarcity, borne largely from sharply higher-than-expected demand growth, and the savage downturn in hydroelectricity supplies," wrote energy consultants Samuel A. Van Vactor and Frederick Pickel in a technical article on deregulation published earlier this year.

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