The state of New Jersey fired another salvo in an attempt to sink Spectra Energy's proposal to expand its Texas Eastern Transmission (Tetco) and Algonquin Gas Transmission pipeline systems.

"The state has serious concerns with the pipeline proposal," said Gov. Chris Christie. As a result, New Jersey is intervening at the Federal Energy Regulatory Commission (FERC) to "protect the interests of Linden, Bayonne, Jersey City and the state of New Jersey." New Jersey's Department of Environmental Protection will represent the state's interests at the Commission.

The City of New York, however, strongly supports the project. "New York City is highly dependent on electricity, and on the infrastructure and fuels that support it," a staff member for Mayor Michael Bloomberg wrote to FERC [CP11-56]. "To remain the preeminent financial, corporate and communications center in the world, New York must have reliable sources of electricity. As approximately 90% of the generating capacity in the city uses natural gas as its primary fuel, there is a very close relationship between the availability of natural gas and the city's ability to ensure adequate and affordable electricity."

Moreover, "the evidence is clear that this natural gas pipeline will be safe. Where the project crosses sensitive, high-density areas, its design and construct will exceed the stringent U.S. Department of Transportation Class 4 specification for gas pipelines," he said.

In late December the mayor of Jersey City, NJ, also asked FERC to reject the Tetco-Algonquin expansion, which would serve the New Jersey and New York markets with natural gas from the Marcellus Shale (see Daily GPI, Dec. 29, 2010).

Mayor Jerramiah T. Healy called the New Jersey-New York expansion project "ill-conceived and unnecessarily risky," but Tetco General Counsel Patrick Hester said Healy's letter to the Commission was based on "outdated information."

To accommodate Jersey City, "we have made significant changes to the design and routing of the [New Jersey-New York] Project based on the comments and feedback we have received," Hester said. He further noted that officials of Spectra Energy, parent of Tetco and Algonquin Gas, met with Healy's staff in December to discuss the changes to the project's design and routing.

The application for the $850 million project calls for the construction of approximately 15.5 miles of pipeline through parts of Bayonne, Jersey City and offshore Hoboken in New Jersey, as well as parts of Staten Island and Manhattan in New York, where it would connect to the Consolidated Edison Co. of New York Inc. (Con Ed) gas infrastructure system to serve Con Ed's residential and business customers (see Daily GPI, Dec. 22, 2010). In addition, about five miles of pipeline will be replaced in Linden and Staten Island, and some existing facilities will be modified in New York, New Jersey and Connecticut. The project is expected to be in service in November 2013.

A Spectra Energy spokeswoman said the expansion would provide new diversified supply, as much as 800 MMcf/d, to the region. The project is fully subscribed with firm commitments from Chesapeake Energy Marketing Inc., Con Ed and Statoil Natural Gas LLC.

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