Northeast Natural Gas Pipe Projects Under Fire, But It's Never Been Easy, Reports NGI

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 -- has drawn scrutiny from landowners and local officials, as well as the Delaware River Basin Commission. 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, citizens groups continue to oppose it.

Tennessee Gas Pipeline Co. LLC's Northeast Energy Direct (NED) project, which would carry Marcellus gas to New England, also has faced off against a number of protest groups, but CEO Rich Kinder of the parent Kinder Morgan Inc. believes it will prevail.

"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."

To read more of the challenges facing those who would provide new or expanded natural gas pipelines, visit naturalgasintel.com and sign up for a free trial.

NGI has been an independent voice delivering real-time news and price survey reports for the natural gas market since 1981 in its publications: Natural Gas Intelligence, Daily Gas Price Index, Weekly Gas Price Index and NGI's Shale Daily. Relied on by industry and government since 1988, NGI data is the industry's lowest cost essential data available on conventional and unconventional natural gas pricing.