Northeast Direct gas pipeline reborn? Will Kinder Morgan’s Open Season lead to ‘NED Lite’?

More Info
By Sunday, Jul 9 News  3 Comments
Ben Hillman
Even as Kinder Morgan subsidiary Tennessee Gas Pipeline Company carves away Otis State Forest in Sandisfield for its Connecticut Expansion Project (pictured above), the parent company is indicating it may revive its Northeast Direct pipeline proposal, suspended last April, that would have brought natural gas from the fracking fields of Pennsylvania through New York, the Berkshires of Masssachusetts, and on to Northeast ports.

On May 23, Kinder Morgan subsidiary, Tennessee Natural Gas published on its web site a notice of an Open Season — a sign-up period for utilities to make commitments to pay for the transportation of a certain amount of gas on a pipeline for a fixed time period.

Open season commitments are confidential for now, but they may presage a new pipeline through Massachusetts.

In fact, Tennessee has already signed up a number of customers and is looking for more.

The notice says that Tennessee has executed binding agreements for a 20-year term with “multiple Foundation Shippers for a portion of the Firm Capacity.”

Now, Tennessee is looking for so-called Anchor Shippers to add to the ones it already has.

Kinder Morgan spokesman, Richard Wheatley, said, “We do these from time to time based on market conditions,” adding that the company was anticipating responses from gas utilities that supply gas for home heating.

Map-MassPipes-05

 

The notice specifies no particular route, only offering transportation of gas between Dracut, in northeastern Massachusetts, and delivery points in New England on the existing 200 line, which runs through New York and southern Massachusetts.

As to whether a new pipeline will be built, the notice is vague, saying that gas could be made available through the installation of new compression stations and/or pipeline facilities or the installation of “appurtenant facilities that meet the needs of Shippers.”

June 30 was the deadline for responding to the notice. The gas will be shipped beginning November 2018 if the project moves forward.

Perhaps explaining why gas companies referred a reporter to Kinder Morgan, a large part of the notice consists of a required confidentiality agreement for prospective customers. The agreement forbids them from disclosing anything – even the fact that the parties are discussing gas transportation.

the officers of the Federal Energy Regulatory Commission in Washington, D.C. Photo: Ben Hillman

the officers of the Federal Energy Regulatory Commission in Washington, D.C. Photo: Ben Hillman

The hazy nature of the notice coupled with the confidentiality agreement may evidence Kinder Morgan’s wish to delay, as long as possible, the public outcry that previously helped sink the NED project.

If the project involves interstate gas transportation (as opposed to intrastate), which seems likely, Tennessee will eventually need to file publically with the Federal Energy Regulatory Commission (FERC), and meet all of FERC’s requirements.

Although NED ultimately failed to attract a sufficient customer base to survive, several gas companies signed on to the pipeline early, claiming that it would relieve the bottlenecked smaller pipelines that served their customers.

Berkshire Gas, for example, had planned to use the NED pipeline capacity to lift the moratorium it had imposed in 2014 and 2015 on all new and expanding gas hookups in Deerfield, Montague, Whatley, Greenfield, Amherst, Hadley Hatfield and Sunderland.

Business groups and restaurants have complained forcefully for several years about the severe economic injury to their towns caused by the moratorium.

berkshiregas*1024xx2717-1532-105-0

Berkshire had touted the NED pipeline as the only way to solve its supply problems. Berkshire’s parent company, UIL Holdings – now owned by Avangrid – had acquired a 2 ½ percent interest in the NED project, investing $80 million.

In fall of 2015, the Massachusetts Department of Public Utilities approved contracts with Berkshire Gas as well as Columbia and National Grid, allowing the three companies to ship a combined .3 billion cubic feet per day on the NED.

Then, last April, the NED project collapsed.

Berkshire had to find another way to end the ban on gas hookups.

Responding to increasing pressure to lift the moratorium in the gas-frozen towns, the company proposed two alternatives to the NED:

Either a new liquefied natural gas storage facility to be located in Franklin County, or an expansion of its existing distribution main from Greenfield to the Tennessee Gas Pipeline interconnection in Southwick.

Similarly, as reported by MassLive in April, Columbia Gas had been negotiating an agreement with Holyoke Gas & Electric that would set up a separate supply line for Holyoke, thus freeing up the gas transport line to Northampton and Easthampton and ending a ban in those cities on new gas hookups.

Spokespeople for both Berkshire Gas and Columbia Gas now assert that plans to lift their moratoriums are not related to Kinder Morgan’s Open Season negotiations.

Chris Farrell of Berkshire Gas said, “You can’t conflate the Open Season and the other plans.”

Sheila Doiron of Columbia Gas explained. “The moratorium and the Open Season don’t have anything to do with each other. The Open Season is an opportunity for us to express interest and our Gas Supply people are working with Kinder Morgan on that.”

“It’s part of the solutioning to the long-term issue of adequate gas transport, but we’re working separately on a short-term solution to lifting the moratorium.”

march photo

When the NED was first proposed, those opposed to the fracked gas pipeline organized a statewide march through those Massachusetts towns the pipeline would traverse. Photo: Lynne Cherry

Underscoring the confidentiality surrounding the Open Season notice, she said, “they’re proprietary negotiations so I can only say that yes, the proposal will help, and we’re talking to them.”

These recent statements appear to be at odds with statements made at a hearing last August by Berkshire Gas President, Karen Zink, who said, in effect, that it would have wasted customers’ money for the company to have explored costly short-term gas supply alternatives while NED was alive.

Will these new rumblings of a pipeline once again cause these gas companies to again put all their eggs in the pipeline basket, ignoring more modest alternatives that could lift the moratoria?

For that matter, what exactly does Kinder Morgan have in mind? The Open Season notification raises many unanswered questions, but Berkshire County and its neighbor counties will be on high alert for the answers.


Return Home

3 Comments   Add Comment

  1. Patrick Fennell says:

    Let’s see all of our elected federal reps are democrat. 85% of our elected reps in Boston is democrat and Otis State Forest belongs to the Commonwealth of Massachusetts. Elections do have consequences and es our pols are bought and well-paid for.

    1. Ariel says:

      Hi, Patrick~
      Unfortunately, the craze for “natural” gas has been party-blind. Elected officials and appointed professionals (in agencies like state & federal depts. of energy, public-utilities commissions, etc.) all totally swallowed the gas-industry’s mythology that its own special fossil fuel was “cleaner” than oil or coal. This was never true for a second. “Natural” gas is more accurately named “methane gas”: 96 to 99 percent of it is methane.

      BURNING methane produces about half as much carbon dioxide as oil or coal, at the end-use destination. But enroute to that destination, methane spews into our atmosphere constantly. It spews from hundreds of thousands–likely millions by now; no one counts–of producing and abandoned fracking wells all over this country. Millions, probably billions, of tons of methane are also deliberately released from thousands of compressor stations that keep interstate pipelines running at safe pressures. More methane leaks into the environment at transfer stations, LNG compression facilities, LNG storage facilities . . . etc. etc.

      A methane molecule traps 83 to 86 times as much heat in the atmosphere as a CO-2 molecule during the first 20 years both molecules are in our environment. The methane molecule traps “only” 30 times as much heat as the CO-2 molecule if their effects are averaged over a century. Cornell professors Howarth & Ingraffea have been researching this for years; every time another university jumps in with a new study, the full-life-cycle profile of methane gas turns out to be worse and worse. The latest research shows the full-life-cycle climate impact of natural gas to be worse than the full life cycle climate impact of coal.
      Please see: https://www.youtube.com/watch?v=kp5PRgd3y-I
      And: https://www.thenation.com/article/global-warming-terrifying-new-chemistry/

      The U.S. government steadfastly shut out all of this information–promoting U.S. fracked gas as a so-called “bridge fuel” all over the world–until about 18 months before former President Obama left office. Everyone in the U.S. (and the world!) needs to get over the lie that “gas is cleaner” than ANYTHING else–STAT.

      Thank you for caring!
      Ariel

  2. Kyle Pierce says:

    Right on, Ariel! Thank you for you comment.

What's your opinion?

We welcome your comments and appreciate your respect for others. We kindly ask you to keep your comments as civil and focused as possible. If this is your first time leaving a comment on our website we will send you an email confirmation to validate your identity.

Welcome to Real Estate Friday!

Friday, Nov 17 - What’s on the Market – Check out "Properties ranging from $400k to $800k" in this week's "What's on the Market." Something for everyone.