Yesterday Houston-based company Kinder-Morgan, the largest energy infrastructure company in North America, formally asked the Federal Government to halt all work and review in approving their request to build the Northeast Energy Direct Pipeline (NED).
The NED is was a $3.3B 200-mile pipeline from Pennsylvania to Wright, NY and then to Dracut, MA. It would have been a 30” high-pressure pipeline to connect Marcellus Shale gas to Maine’s already existing Maritimes & Northeast Pipeline.
The M&NE Operators already filed a request to reverse their transmission direction to no longer ship energy into Maine, but rather pickup the output from NED and ship it out to export facilities in the Canadian Maritimes.
Per Kinder-Morgan’s own statement, they have spent the last 2-years working to secure financing and committed utility buyers for this project and “did not receive the additional commitments it expected”.
And thus:
"Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds,"
And now the array of environmentalists, concerned residents and politicians on-record opposing this all have reasons to rejoice.
I would note three key reasons:
1. A pipeline will not be built. This is the obvious one. Nothing more really needs to be added. 200 miles of massive high-pressure pipe with its requisite compressor stations, metering stations, pigging facilities and valve sites running through conservation areas, green space and either over or under the Connecticut River will now not exist.
2. Exporting US fracking gas from the largest shale gas region of the US would have provided a large relief valve on domestic supply, while demand remains constant. This means the price will go up. Which would get passed on to rate-payers, but more importantly would raise the generating cost of Natural Gas derived electricity which is exactly what the coal companies are waiting, hoping, wishing and praying to happen. Right now the War on Coal is not being won by Obama or the EPA. Its being won by gas and it is being won handedly. If gas gets more expensive in the short term, coal will get more competitive. Make no mistake: The biggest proponents and lobbyists for exporting shale-sourced LNG may be the gas companies but they are arm-in-dirty-arm with the coal barons.
3. This brings New England back to the table to solve their very real energy supply issues. Kinder Morgan was not wrong when they said they needed to deliver more energy to the Northeast, they were just wrong when they wanted to do it by piping fracking fuel a couple hundred miles to do it.
New England needs energy and when it appeared that they could start dipping into the almost limitless Marcellus Formation it became too easy to call this problem solved. Putting NED in the dustbin will force people back to the table to talk about Offshore Wind (Deepwater perhaps?), Rooftop Solar and behind-the-meter regulatory changes to leverage distributed generation.
but…
It also now gives a boost to the other pipeline that is being planned for New England, this one from Spectra Energy. The activists are already mobilized in opposition to Spectra’s Algonquin Incremental Market (AIM) Pipeline. Schumer and Gillibrand are on-record opposing this thing.
We’ll see what happens.
Still: A win is a win. Congratulations to the people that were out there working against the NED.
Well done.