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Northeast Natural Gas Pipe Projects Under Fire, But It’s Never Been Easy
Natural gas from the still-blooming Marcellus Shale is but a pipeline ride away from the neediest demand center in the country: the Northeast. But between Marcellus and market are numerous municipal officials, landowners and environmentalists who are skeptical of — if not downright hostile to — pipeline development. Why?
There are two factors that have caused Northeast pipeline projects to garner plenty of attention and opposition at FERC as well as at the local level, said Interstate Natural Gas Association of America (INGAA) CEO Donald Santa. One is just the characteristics of the region; it is densely populated, and the generally “environmentally conscious” people who live there haven’t had much experience with pipeline development. It has always been challenging to build pipelines in the Northeast, Santa said.
“The second factor is the fact that natural gas and natural gas infrastructure, I think, have become the focal point for a lot of environmental groups in terms of a broader agenda that is largely anti-fossil fuel,” Santa said. Rolled into that are fears about hydraulic fracturing and other industry practices that happen upstream of the pipeline.
“I think you’ve got a confluence of those two forces, resulting in greater public attention, greater media attention, and also…the number of interventions that we’re seeing in these [regulatory] proceedings,” Santa told NGI.
“In dealing with landowners and those whose local environment is affected by these projects, pipelines have always attempted to be accommodating, within reason, whether it’s rerouting or environmental mitigation or other things. I think it becomes more challenging when dealing with interest groups when their opposition is part of pursuing a much broader agenda. The pipeline project and the process is really more of a proxy war over bigger issues.”
For instance, PennEast Pipeline Co. LLC’s Marcellus-focused project — a 1 Bcf/d pipeline from Dallas, PA, to Pennington, NJ (see Shale Daily, Aug. 12) — has drawn scrutiny from landowners and local officials, as well as the Delaware River Basin Commission (see Shale Daily,Nov. 26, 2014). In response to comments and opposition, PennEast recently tweaked its route, adding about two miles and making other changes affecting the last 20 miles or so of the project.
However, New Jersey group Delaware Township Citizens Against the Pipeline Inc. (DT-CAP) wrote to the Federal Energy Regulatory Commission (on letterhead bearing its logo — a mini map of the pipeline with a circle-slash) to say that it’s still not happy.
“…DT-CAP does not support either the ‘preferred alternative route’ or the proposed original route due to the detrimental impacts both routes will cause to the environment, watershed, local economies, homeowner property rights, and taxpayer investments in the preserved and conserved lands of Delaware Township,” the group said in its Jan. 20 letter. “DT-CAP opposes any additional natural gas pipelines in Delaware Township.”
Additionally, DT-CAP said, “…the location, timing, and number of scoping meetings are inadequate and inconsistent with FERC regulations for the EIS [environmental impact statement] scoping process.”
Environmental challenges often seize upon questions of procedure, Kevin Ewing, a partner with Washington DC-based law firm Bracewell & Giuliani told NGI. “A lot of environmental challenges tend to be focused on process, using NEPA [the National Environmental Policy Act] as the tool, asking whether the agency has satisfied its obligations under NEPA,” said Ewing, who has worked on numerous pipeline cases, particularly in the Northeast.
“Some of the challengers on the NEPA issues — which are the predominant challenges or more serious challenges these days — are [coming from] established environmental organizations, local chapters of national organizations [and] national organizations, but also they can be local organizations that are purpose-built that include landowners whose main concern is pipeline routing and who have elected to use a NEPA challenge to make their unhappiness manifest.”
Besides NEPA, some pipeline opponents and their lawyers have also been boning up on the Freedom of Information Act (FOIA).
Mass Audubon is among the opponents of Tennessee Gas Pipeline Co. LLC’s (TGP) Northeast Energy Direct (NED) project, which would carry Marcellus gas to New England (see Daily GPI, Dec. 8, 2014). In a five-page Jan. 15 letter to FERC, Mass Audubon alleges that construction services firm AECOM, working under contract for TGP, violated the FOIA as well as the Massachusetts Public Records Law when it made information requests to various state municipal boards. A spokesman for TGP parent Kinder Morgan Inc. (KMI) said the company was reviewing the letter and had no comment.
NED has garnered its share of opponents and then some. Pipeline opponents are planning to hold a forum in Berkshire County, MA, at the end of January. KMI is holding open houses through the winter to educate residents about the project.
Last year, the state of Massachusetts wrote to FERC to raise environmental concerns about NED. The state also said it is “unclear” whether it needs additional pipeline capacity to meet its needs (see Daily GPI, Sept. 18, 2014), conveniently ignoring the fact that Maine might want to take some gas from NED, which would need to go through the Codfish State to get to the Pine Tree State.
“‘If the pipeline isn’t going to serve us, why do we want it?’ That’s a rather interesting approach for a state and a region that has very few indigenous energy resources, let alone natural gas…” Santa said, adding that Massachusetts receives gas thanks to pipelines that pass through states to its south.
“…[I]t highlights one of the reasons why the siting of interstate pipelines is at the federal level,” Santa said. “This is interstate commerce. This is for the broader good…Would somebody say, ‘I don’t want there to be a highway unless it only delivers stuff to my state’?”
Massachusetts’ attitude toward pipeline development and the greater good might change with its newly elected governor, Republican Charlie Baker and his cabinet.
About 91% of the 188-mile revised market path for NED would be within or adjacent to TGP’s existing pipeline and/or existing power utility corridors in eastern New York, western Massachusetts and southern New Hampshire, extending east to Dracut, MA, according to KMI. During a fourth quarter earnings conference call, KMI CEO Rich Kinder was asked by an analyst about “the regulatory quagmire” the NED project has faced over its right-of-way.
“We have adjusted this right-of-way so that today the huge percentage of the right-of-way is along utility easements,” Kinder said. “There are certainly people who are going to say, ‘not in my backyard,’ but that’s why we have FERC as the enabling agency…[W]e’re going to have…open houses in the next few weeks in all of these communities…[I]n the end we will have a route, and we expect the FERC to approve that route because it is reasonable. Look, you have to look at the underlying economic need here. If there’s one area of the United States that needs additional natural gas, it is New England.”
By Kinder’s thinking, if NED isn’t built, it is likely that another project will be — because New England needs the gas. While these days it might be more time-consuming and tedious to get a pipeline project through the regulatory process, project opponents have not been able to stop pipelines for which there is truly a need, according to Ewing.
“…There are more specific environmental challenges than there were in the past; they’re also more serious…” he said. “FERC, to date, working with the applicants and approved by the court, has found ways to deal with those kind of challenges effectively under law in a way that does not seriously jeopardize the likelihood of receiving approval or substantially alter the terms of the approval that is granted…[T]he applicants and the agency have risen to those challenges and appropriately managed them to remain successful in working through the legal requirements for agency approval.”
Still, some lawmakers in Washington, DC, have noticed the tough time that pipeline developers are having, particularly in the Northeast.
The U.S. House of Representatives Wednesday passed a bill that would establish a set deadline for federal and state agencies to approve pipeline applications, despite objections from the Democratic minority and a veto threat from the Obama administration (see Daily GPI, Jan. 21). The legislation would establish a 12-month deadline for the Federal Energy Regulatory Commission to approve gas pipeline applications, and other federal permitting agencies would have 90 days (with a potential extension of 30 days) to complete a separate review of the project.
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