Tennessee Gas Pipeline Company, L.L.C. (TGP), a subsidiary of Kinder Morgan Energy Partners, L.P., is proposing the Tennessee Gas Pipeline Northeast Energy Direct Project to upgrade its existing pipeline system in New York, Pennsylvania, Massachusetts, New Hampshire and Connecticut.
The proposed Pennsylvania to Wright Pipeline Segment portion of the project includes the construction of approximately 135 miles of greenfield pipeline from the existing TGP line in Susquehanna County, Pennsylvania, northeast to the existing TGP line in Schoharie County, New York. The project also includes the construction of a 9-mile and a 23-mile loop along the existing TGP line in Bradford and Susquehanna counties in Pennsylvania.
Additionally, this will include the upgrade of an existing compressor station in Bradford County, Pennsylvania, and construction of three new compressor stations; one in Susquehanna County, Pennsylvania, one in Delaware County, New York, and one in Schoharie County, New York.
The proposed Wright to Dracut Pipeline segment would result in the construction of approximately 53 miles of pipeline co-located with TGP’s existing system and an existing utility corridor in New York, 64 miles of pipeline in Massachusetts and approximately 71 miles of pipeline in New Hampshire generally co-located with existing utility corridors. This segment also includes additional meter stations, compressor stations and modifications to existing facilities in New York, Massachusetts, Connecticut and New Hampshire.
Approximately 75 miles of pipeline laterals and loops are planned to be constructed in Massachusetts, Connecticut and New Hampshire.
The Northeast Energy Direct Project is being developed to meet increased demand in the northeast United States for transportation capacity for natural gas, which is a clean, environmentally friendly energy source produced domestically. Pending receipt of all necessary regulatory approvals, the proposed project is estimated to be placed in service by November 2018, so that the additional gas supplies are available for the 2018-2019 winter heating season.
Northeast Energy Direct Project Timeline:
Q: Why is NED needed?
A: NED is needed to fill a growing gap between natural gas supply and demand in New England and to reduce both energy costs and greenhouse gas emissions.
- New England’s families and businesses currently pay the highest prices for natural gas in the continental United States, yet an abundant supply of low cost natural gas is only 300 miles away.
NED will connect New England – currently the highest price demand region in the continental U.S., to the lowest cost, most reliable natural gas supply region in the country some 300 miles away. Natural gas in the Marcellus-Utica area has consistently been the lowest priced in the U.S. for the past two years. Meanwhile, the gas distribution hub at Dracut, Massachusetts has consistently had the highest natural gas prices over the same period. During the winter of 2013/2014, natural gas prices at Dracut averaged over 700% higher than the natural gas prices in the Marcellus-Utica producing area. The higher cost of natural gas caused by the current lack of pipeline capacity is in effect a “tax” on New England’s families, businesses and public institutions.
- New England’s pipeline capacity has not kept pace with the rapid growth of natural gas-fired electric power generation capacity.
In 2000, 15% of New England’s electric energy production was fueled by natural gas. By 2014, that figure grew to 44%, as New England dramatically reduced its reliance on coal (minus 13%) and oil (minus 21%) for electric generation. Natural gas demand for power generation alone in New England has grown by nearly double the rate of natural gas pipeline capacity additions to the region from 2000 to 2014. This gap will grow as older nuclear, coal and oil-fired plants continue to be retired and replaced by new, cleaner gas-fired plants. Scheduled retirements of these power plants between 2014 and 2018 represent more than 10% of the region’s generating capacity. At the same time, nearly 60% of the 9,500 megawatts of proposed new electric generation in ISO New England’s region will be fueled by natural gas.
- Therefore, New England’s families and businesses also pay the highest electricity costs in the lower 48 states, and the last two winters alone cost New Englanders nearly $7.0 billion.
According to the independent U.S. Energy Information Administration, New England’s electricity prices were nearly 50% above the U.S. average in 2014 and were over 70% above the U.S. average in January and February of 2015. Over the past two winters, ISO New England electric plants have had to rely on high-priced natural gas, expensive imported LNG and costly fuel oil purchased on the spot market to meet demand due to insufficient natural gas pipeline capacity serving the region. This resulted in New Englanders paying over $4.8 billion more for electricity during the winter of 2013-2014 and approximately $2.1 billion more for electricity during the winter of 2014-2015 than what was spent for electricity during the winter of 2011-2012. Also, ISO New England has noted that, although total use of electricity in New England dropped 2% in 2014 compared to 2013, the average price for wholesale electricity rose 13% in 2014, with the increase largely due to the increase in the cost of power plant fuel, particularly natural gas. Further, estimates for future winters suggest new pipeline infrastructure could save New England’s residential, commercial and industrial customers approximately $3 billion annually based on reasonable future weather and electric load conditions. NED alone would have saved New Englanders some $3.7 billion during the polar vortex of 2013-14 and is estimated to save consumers between $2.1-2.8 billion during normal winters. If shared among New England’s 6.4 million households, those savings would be a “tax cut” of $437 per household per year.
Q: Will NED increase our reliance on fossil fuels or prevent the development of energy-efficiency measures and renewable technologies?
A: On the contrary, NED will facilitate greater use of renewables and will further reduce greenhouse gas emissions by enabling a faster transition from coal and oil use. NED will be built with the latest technologies to promote energy efficiencies. Natural gas is the cleanest fossil fuel available, and represents a much more environmentally friendly energy source than coal or fuel oil. Natural gas-fired power generation emits about half the carbon dioxide emitted by coal and over 30% less than fuel oil.
- Increasing the supply of cleaner, domestic natural gas is a critical part of the solution to New England’s existing energy crisis, along with growth in renewable energy and efficiency improvements.
In April 2015, six New England governors noted that the region is already facing an energy crisis, punctuated by higher costs for consumers, and that sound energy solutions, including increased use of natural gas, renewable energy, and increased efficiency are needed for the region. While an “all of the above” solution is important and absolutely should include renewable energy sources and increased efficiency, natural gas must play a role given its reliability, affordability and, more importantly, the inability of renewable energy sources to sufficiently supply existing and future energy needs. A recent International Energy Agency study projects that under current policies, fossil fuels will still be required to meet approximately 80% of the world’s energy needs as far out as 2040.
Natural gas and renewable energy have a symbiotic relationship. Solar and wind resources are only available when the sun is shining or the wind is blowing. To ensure that electricity is available for homes, businesses, and industry on a reliable basis, operators of the electric grid need readily-available sources of power to compensate for the variability associated with renewable energy. Because of its flexibility and reliability, natural gas-fired generation is the ideal source of electricity to support renewable energy. Without natural gas to provide fuel on demand for electric generation when needed in any weather, solar and wind power are simply incapable of satisfying New England’s existing and projected electricity requirements.
Kinder Morgan supports renewable energy resources and is one of the largest handlers of ethanol and biofuels in the nation. As such, Kinder Morgan is on the forefront of advancing technology to transport biofuels to meet our nation’s energy needs. We also use wind and solar power in our operations – e.g., powering measurement and communications equipment in remote areas.
NED will result in a further shifting away from high-carbon-emissions-generating fossil fuels such as coal and oil, causing a corresponding reduction in the region’s carbon and other emissions. A report led by current United States Energy Secretary Ernest Moniz stated, “Natural gas possesses remarkable qualities. Among the fossil fuels, it has the lowest carbon intensity, emitting less carbon dioxide per unit of energy generated than other fossil fuels. It burns cleanly and efficiently, with very few non-carbon emissions.”
Natural gas has been essential to national and regional efforts to reduce carbon emissions. The White House noted that “Natural gas is already playing a central role in the transaction to a clean energy future.” Since 2007, energy-related CO₂ emissions in the U.S. have fallen 10% and a significant factor contributing to this reduction was fuel switching from coal to natural gas. ISO New England has stated that as a result of New England’s transition from coal and oil to natural gas from 2001 to 2013, regional emissions of CO₂ fell by 23%, regional emissions of NOX fell by 66%, and regional emissions of SO₂ fell by 91% Natural gas also produces far less solid waste as a by-product of its use than other fuels used in power plants throughout New England.
Q: Will NED’s construction harm the environment?
A: No. Construction will adhere to the strictest environmental standards for clean air, water and habitat and will undergo a comprehensive environmental review as part of the FERC permitting process. More than 80% of the total NED mainline will follow existing utility corridors to further minimize potential impacts. For all rights-of-way utilized by NED, TGP will work with all appropriate federal, state, and local governments to develop a comprehensive plan to restore and maintain the land.
- Each and every foot of NED’s right-of-way is governed by significant and comprehensive federal, state and local regulations addressing initial right-of-way permitting, construction, post-construction restoration and ongoing maintenance.
Regulatory oversight of NED’s construction will be significant and all-encompassing While FERC is the lead agency for right-of-way permitting, restoration and ongoing maintenance, several other federal agencies (Army Corps of Engineers, U.S. Fish and Wildlife, Bureau of Land Management, U.S. Department of Transportation, etc.) as well as state agencies (Departments of Environmental Protection, Departments of Conservation and Recreation, etc.) and local agencies (county conservation districts, etc.) also have significant construction and right-of-way oversight responsibilities to ensure that NED is constructed properly and in an environmentally sensitive manner. TGP’s culture is to leave the land in as good or better shape than when the project began.
Q: Will NED promote hydraulic fracturing techniques used to produce hydrocarbons?
A: No. NED will simply allow New Englanders to benefit from natural gas that will be produced regardless of the NED project. While NED will provide an additional 1.3 to 2.2 Bcf/d of natural gas to meet energy requirements in the New England region, NED will transport only a small fraction of the total natural gas produced from the Marcellus-Utica region. Without NED, other regions will benefit from the natural gas produced, but it will be produced regardless.
It’s also important to note that hydraulic fracturing is a tried-and-true production technique with a history of more than 60 years in the United States. EPA estimates that between 25,000 and 30,000 new wells were drilled annually between 2011 and 2014.It is a proven method to safely and efficiently produce natural gas. On-going technological improvements, commitments by producers, along with state and federal regulations continue to drive environmentally protective production of this vital resource. Regulations cover well design, location and spacing, drilling operations, water management and disposal, air emissions, wildlife impacts, surface disturbance, and worker health and safety, as well as on-going inspection and enforcement requirements.
Q: If developed, will NED put our personal safety at risk?
A: No. Pipelines are proven to be the safest method of transporting energy and TGP has been safely supplying natural gas to New England for more than 60 years.
- NED will be designed, installed, operated and maintained in accordance with best industry practices and federal safety and operational regulations for interstate natural gas pipelines. These standards and practices have been developed with the benefit of nearly one hundred years of operating experience by Kinder Morgan and predecessor companies and operating and safety benefits derived from increased regulatory requirements.
TGP’s parent, Kinder Morgan, has an incident rate 30% lower than the interstate natural gas pipeline industry’s average. Overall in 2014, our operational performance was better than our industry peers in 35 out of 36 environmental, health and safety comparisons.
TGP and Kinder Morgan are committed to the safety of the public, our employees and contractors, protection of the environment, and the safe operation of our pipelines in compliance with applicable rules and regulations. We invest hundreds of millions of dollars each year on integrity management and maintenance programs with the objective of seeking to ensure safe, reliable operations – including more than $400 million in 2014 alone. Please review our operational performance updated monthly and published on our web site.
Q: Will New Englanders benefit from NED or will the natural gas be sent to Canada for export?
A: New Englanders will be the beneficiaries of NED. NED is being developed specifically to provide much needed additional natural gas for regional electric generation and local distribution companies that need to serve increasing customer demand in their New England service territories. NED’s shippers have already committed to over 560,000 Dth/d of natural gas supplies to meet New England’s growing consumer and industrial gas needs, as well as to help bolster electric generation reliability. Our anchor shippers include seven New England Local Distribution Companies, and TGP continues to negotiate with various customers to provide capacity to industry sectors such as gas-fired power generation facilities.
Q: Will NED place an unnecessary burden on electricity ratepayers to fund the cost of its construction? Eventually, will consumers have to bear the burden of building NED?
A: Far from it. The NED project is not relying on any subsidies to be built; rather, NED is a standalone project that will be paid for by TGP and supported by our customers who enter into firm transportation capacity commitments on the pipeline. NED has received commitments of more than 560,000 Dth/day to date, and we anticipate having sufficient customer support to move forward with the project. As noted above, consumers will actually save hundreds of dollars a year per household if NED is built.
Recent initiatives by the New England Governors and the New England States Committee on Electricity (NESCOE), a not-for-profit organization representing the collective interests of the six New England states on regional electricity matters, suggest that adding significant natural gas firm transportation capacity to the region’s markets would lower the price of gas in New England and enhance the reliability of both natural gas and electricity service.
Q: Is the FERC process just a “rubber stamp”? Will local citizens be able to make their voices heard? Is my property subject to be impacted by eminent domain?
A: The FERC permitting process is rigorous and allows for robust stakeholder participation and dialogue throughout. TGP is currently participating in the NEPA pre-filing process through the FERC, which allows companies, agencies and stakeholders to identify potential environmental and other impacts from proposed energy projects and mitigate the impacts during permitting. FERC has already held a dozen public scoping meetings on the project and has begun gathering verbal and written comments to which TGP will respond. Overall, the pre-filing and certificate application processes may encompass more than two years of hearings, written and verbal comments, filings, and responses.
In addition to the FERC process, we have been conducting outreach efforts for NED since 2014, including meetings with governmental officials and regulatory agencies to gather information that will be used in the preparation of federal and state permit applications. We have held some 70 open houses and presentations for towns and counties, providing more than 4,400 residents multiple opportunities to ask questions about NED and to voice their concerns.
Prior to construction, TGP is required to apply to and receive from the FERC a certificate under the federal Natural Gas Act. As part of the certificate application process, TGP is required to prove that building NED is in the public need, which is referred to by the FERC as being in the “public convenience and necessity.” The process includes substantial filing requirements to inform FERC’s decision. The certificate application will include several thousand pages of information. The first draft of the Environmental Report submitted in the pre-filing process included over six full binders of information. The final Environmental Report will include resource reports covering the following topics: water use; fish, wildlife, and vegetation; archaeological and cultural resources; socioeconomics; geological resources; soils; land use, recreation, and aesthetics; air and noise quality; project alternatives; reliability; and safety.
If the FERC concludes that NED will serve public convenience and necessity, eminent domain proceedings will be available, but not before such a finding. However, we always view eminent domain as a last resort only to be used if extensive consultation and negotiations with an individual landowner is unsuccessful. Our goal, our practice and our overwhelming experience is to arrive at mutually beneficial terms and conditions with landowners. On our recent pipeline construction projects, 98.8% of the right-of-way has been secured under voluntary agreements with landowners. In fact, many of our recent projects have 100% of the right-of-way under voluntary agreements. In the infrequent cases when eminent domain is used, the landowner is fully compensated for the limited rights obtained following a prescribed hearing before a neutral tribunal.
TGP has maintained safe, respectful, mutually beneficial relationships with landowners along its existing pipeline rights of way throughout New England for over 60 years, and is committed to continuing to do so in the future.
New Hampshire Route Map
Proposed Compressor Station: New Ipswich
Compressor Station Details
Facilities to be Installed (Anticipated):
- Two Titan 250 turbines; one Titan 130 turbine
- Compressor building
- Office building for Tennessee personnel
- Ancillary facilities
Estimated Acreage of Compressor Station site:
Total Property Acreage to be Acquired:
Property Acquisition Status:
- Option to Purchase Agreement executed