With the Independence Pipeline project continuing its strugglethrough the landowner gauntlet in the Midwest and through thelonger-than-average regulatory review at FERC, Coastal Corp. isattempting a different approach for its proposed Gulfstream NaturalGas System in the Gulf of Mexico and Florida. The company plans toget the word out to local officials early and claims it wants asmuch public input as possible prior to filing an application withFERC this fall.

Since announcing the project in February, it has drawn apreliminary three-mile-wide pipeline corridor on a map andscheduled several open houses in Florida to discuss the projectwith local officials, regulators, landowners and anyone else who’sinterested. The corridor extends from landfall near Piney Point inManatee County across the Florida Peninsula through Hardee, Polk,Highlands and Okeechobee counties, to an ending near Fort Pierce inSt. Lucie County.

“I don’t think this has ever been done by anyone in the pipelineindustry before,” said spokesman Joe Martucci. No other pipelinesponsor has presented a pipeline route for public comment so earlyin the process, he said.

The approach is “in keeping with the spirit of FERC’s Notice ofProposed Rulemaking, issued last fall, which is intended to improvecommunication, expand public participation and identify anyconcerns very early in the process,” said ANR Pipeline PresidentJeffrey A. Connelly.

And Florida is probably a good place in which to try it. Thestate has a history of defeating offshore and onshore productionand pipeline projects in an effort to protect its pristine beachesand large tourist revenues. The state has only one other interstatepipeline, Florida Gas Transmission, and so far has not been eagerto receive the benefits of pipeline competition. But that may bechanging because of the tremendous need for additional powergeneration.

“Florida is Florida. There’s water quality issues there to beconsidered and air quality issues, as there are in any other place,and there are species of concern, but Florida is a very sensitivearea, and we are approaching it that way,” said John Schafer, theenvironmental affairs point man for Coastal on the Gulfstreamproject. “Our environmental strategy is one in which we have earlycoordination with all the agencies and the environmental groups inthe areas in which we are going to be located. They are telling usthat they like the idea of more natural gas,” for air qualityreasons, but they also want to make sure a pipeline project avoidsenvironmentally sensitive areas.

Florida’s concerns in the past have been focused on “offshoreleases, offshore drilling and offshore production. This pipeline isnot going to be connected to that,” Shafer noted. “Our pipelinewill be connected to supply in Alabama and Mississippi and willbring clean, dry, processed natural gas to Florida. The majoritywill be used to generate electric power. You can’t compare theGulfstream line to resistance by Florida to offshore production.”

The project, however, should be compared to Coastal’s previousattempt at a Gulf-crossing pipeline to Florida – the SunshineNatural Gas System in the late 1980s. “The timing was bad andprobably the market wasn’t quite there,” said Martucci, stressingit wasn’t Florida opposition that prevented the project from beingcompleted.

The original Sunshine project was designed to move up to 450MMcf/d from the Mobile Bay area to the growing electric generationmarket in Florida. Coastal’s inability to complete a fullenvironmental study within a FERC-specified time frame prompted thewithdrawal of its application at FERC (see NGI 4/17/89). Apreliminary environmental study was completed in February 1989, buta comprehensive study requiring a 400-mile underwater hazard surveyand a 220-mile onshore environmental review was expected to take atleast nine months. This time around, Coastal has given itself morethan three years to make it through the regulatory review processand complete construction. The project is expected to be in servicein June 2002.

And this time around, the market may be in more urgent need ofgas supply for power generation. There’s a projected demand for anadditional 9,600 MW of electric generating capacity in Florida by2007. But the market is not just there for the picking. Coastalwill have to fight FGT and another new competitor with a plansimilar to its own. The competing 700-mile Buccaneer Pipeline,sponsored by Williams-Transco, also would deliver production fromMobile Bay to the Florida Peninsula. Both lines are targeting thenew generation market, which if gas-fired, would require well over1 Bcf/d of new gas supply.

Last month, Coastal said it had received expressions of interestfrom nine potential non-affiliated customers. A subsequent openseason attracted interest from additional potential customers,Martucci said, without providing any names or the level ofinterest. No one has signed an agreement yet for the proposedcapacity, however. “We’ve got a nice mix of customers – utilities,independent power producers and so on – for Gulfstream,” he said.”But we’re not quite ready to identify our markets.”

Rocco Canonica

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