Kinder Morgan formally withdraws application for Northeast Energy Direct pipeline

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Kinder Morgan has sounded the death knell for its 412-mile Tennessee Gas pipeline project through portions of eastern New York, northern Massachusetts and southern New Hampshire.

In an official "status report" filed to federal regulators on Monday, the company served notice that it has withdrawn its application for the massive pipeline that would have cost $5 billion amid fierce opposition from landowners, municipalities, organized groups, politicians and Massachusetts Attorney General Maura Healey.

The company had signaled its intention to abandon the project on April 20, when it suspended further work and spending on the Northeast Energy Direct pipeline "due to insufficient contracted capacity commitments and a determination that the project is not economic."

It cited an inadequate number of commitments by local distributors to purchase the natural gas that would have been piped to New England from the shale fields near Troy, Pa., to a terminal in Dracut near Lowell. It also pointed to adverse economic conditions and financial instability in the energy industry and the lack of approval by state regulators for a pass-along of some construction costs to electricity ratepayers.

Berkshire Gas and National Grid had been among seven distributors that signed purchase agreements last year, but at least half of the natural gas volume to be generated by the project remained unspoken for when Kinder Morgan announced its suspension.

Within the past month, most of the distributors had withdrawn their filings to the state Department of Public Utilities in Boston and to New Hampshire regulators for approval of the project.

In a brief statement on Monday afternoon, Kinder Morgan wrote that "Tennessee Gas Pipeline (TGP) notified the Federal Regulatory Energy Commission today that the company is requesting the withdrawal of its application for the Northeast Energy Direct (NED) Project in Massachusetts and New Hampshire."

"TGP appreciates the commission staff's diligent efforts on the project both before TGP filed its application last November and during the certificate review process," stated Richard N. Wheatley, director of Corporate Communications/Public Affairs for Kinder Morgan in Houston.

In followup comments to The Eagle, Wheatley pointed out that Kinder Morgan had only approved funding — about $3.3 billion — for the "market path" segment of NED from the Wright, N.Y., area into Massachusetts an New Hampshire. The supply path, costing about $1.7 billion, from northeastern Pennsylvania to Wright, had not been funded by the company's board of directors.

Asked about a potential project reconfiguration, Wheatley referred to the company's April 20 statement listing the reasons for suspension of the NED project.

"The statement addresses that it would be unlikely in the project's current configuration and notes the reasons why," Wheatley said. "But as the April 20 statement also points out, Tennessee Gas will continue to work with customers to explore alternative solutions to address their needs, particularly local distribution companies that are unable to fully serve consumers and businesses in their areas because of the lack of access to abundant, low-cost domestic natural gas."

Until the definitive announcement by the company on Monday, several opposition groups had expressed skepticism that the pipeline plan was dead and buried, focusing on the term "suspension" and predicting that the project would resurface in a new, reduced format.

But a leading opponent has now acknowledged that NED is dead.

"This withdrawal provides a sense of finality that people have been waiting for," said Kathryn Eiseman, director of the Massachusetts PipeLine Awareness Network.

Acknowledging "there is definitely a sense of relief across the region," she cautioned: "We know that Berkshire Gas is still trying to find a way to partner with Kinder Morgan for a pipeline expansion, and that Kinder Morgan still wants a new path to Dracut."

"These guys aren't taking their marbles and going home, except to regroup," Eiseman said.

She cited the Tennessee Gas Connecticut Expansion Project through Otis State Forest in Sandisfield. On May 9, Berkshire Superior Court Judge John Agostini upheld the company's authority to access a 2.3-mile section of the state forest as part of a gas pipeline upgrade project but has suspended that order until July 29.

"We are overjoyed with Kinder-Morgan's decision," said Vincent DeVito, legal counsel for Northeast Energy Solutions (NEES), in an e-mail statement. "They just made official what we had made clear to FERC more than a year ago: Northeast Energy Direct was a $3.3 billion export project that was never financially viable and would have been an economic and environmental disaster for Massachusetts taxpayers.

"We believe our legal strategy of making Federal regulators aware of the project's risks was instrumental in Kinder-Morgan's decision," he added. "In a situation like this, it is imperative that those that question the proposed project provide the regulators with sufficient evidence to make the right call."

NEES represented numerous municipalities, including Lenox, and environmental groups.

After more than a year of preliminary applications and environmental studies filed to federal regulators, Kinder Morgan put in its official application for the Northeast Energy Direct pipeline on Nov. 20, 2015. The project had undergone a route change after a groundswell of opposition in Richmond, Lenox and adjacent communities.

The new route took the pipeline originating in Wright, N.Y., 40 miles west of Schenectady, into Berkshire County from Stephentown, N.Y., passing through parts of Hancock, Lanesborough, Cheshire, Dalton, Hinsdale, Peru and Windsor.

A major industrial compressor plant was proposed for Windsor, arousing strong opposition from the town government, environmental groups and many local residents.

The modified route then traversed seven Pioneer Valley towns before looping to the north through 18 southern New Hampshire communities before re-entering Massachusetts to Dracut.

The company, local distributors and some in the business community had voiced strong support for the pipeline, contending that New England faced a supply shortfall that could have hampered electricity power plants during times of high demand, especially during severe winters.

Contact Clarence Fanto at 413-637-2551.


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