Northeast Energy Direct Pipeline

LFDA Editor

Should NH lawmakers support or oppose the Northeast Energy Direct Pipeline? Have your say!

In Brief:

  • The Federal Energy Regulatory Commission has near total authority over approval of the pipeline, overriding state and local laws.
  • If the project is approved, the developer may use the power of eminent domain to acquire properties it has been unable to secure through negotiation.
  • A number of legislative efforts to regulate pipeline construction have been considered. However, federal rules would supersede any state ordinances.
  • In April 2016, Kinder Morgan indefinitely suspended their application for the NED pipeline, citing lack of interest from prospective customers. 
  • Pro: The pipeline will help stabilize and lower rising energy costs, providing tax revenue and creating jobs.
  • Con: The pipeline would infringe on property owners’ rights and impact the environment, while rising energy costs would be better addressed by alternatives such as conservation and renewable energy sources.

 

Issue Facts:

By LFDA Editor

About the Pipeline

The Northeast Energy Direct Pipeline (NED) was an interstate natural gas pipeline proposed by the Tennessee Gas Pipeline Company, a subsidiary of Kinder Morgan. The project would have brought gas from shale fields in Pennsylvania into the New England regional market, entering New Hampshire through Winchester and passing around Nashua before exiting in Pelham. The route then briefly cut through the Granite State again in Salem before ending at a distribution station in eastern Massachusetts.

The project was suspended indefinitely in April 2016, with parent company Kinder Morgan claiming they had been unable to secure sufficient capacity contracts with prospective customers to justify the pipeline, and saw little chance of being able to do so in the near future. 

Additional facts about the proposal:

  • 87% of the route would have been buried adjacent to an existing utility right-of-way corridor, requiring 100 feet of clearance during construction, reduced to a 50 foot buffer after completion.
  • A total of 71 miles of pipeline would have passed through 17 NH towns.
  • The route included a 41,000 hp compressor station and a 50,000 dht/d meter station .
  • The 30 inch pipe would have carried roughly 1.3 billion cubic feet of gas per day.
  • TGP originally hoped to begin construction in January of 2017, with an expected in-service date of November 2018.

The initial route remained in Massachusetts, but TGP officials announced the new route through NH in December of 2014, citing reduced environmental impact, greater opportunity for utilizing existing rights-of-way, and opportunity to expand access to natural gas service. 

Jurisdiction

The U.S. Natural Gas Act gives the Federal Energy Regulatory Commission (FERC) authority over the approval of interstate pipeline projects. FERC must issue a Certificate of Public Convenience and Necessity before such projects can move forward.

FERC authority supersedes nearly all state or local laws related to such projects, and approval may even override local regulations.

  • The lone area of exception to this rule is the Clean Water Act, which gives state water authorities the power to determine whether a proposed project would violate state water quality standards.
  • The National Environmental Protection Act does require that FERC note where a project violates state or local regulations. FERC may then opt to request a revision of the project to bring it into line with local ordinances.
  • The NH Site Evaluation Committee (SEC) must also approve the project once FERC issues a certificate. However, the SEC cannot reject the pipeline or alter its route. The SEC may impose conditions such as wetland restoration or erosion control measures on its approval of the project. These amount to requests, as the developer is not obligated to honor them.

Once a pipeline project is completed and operational, jurisdiction passes from FERC to the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration.

Approval Process and Opportunities for Public Input

Approval of interstate pipeline projects is the sole jurisdiction of FERC.

Before certifying a project, FERC must first determine whether the public benefit the project offers outweighs any negative impacts, such as environmental damage or the use of eminent domain. FERC must also examine alternative projects that could answer the same public need to determine if any of them offer a lower adverse impact.

The certificate process allows several opportunities for public comment.

  • Project developers must hold public hearings before filing a complete application. This preliminary comment period closed on October 16th, 2015.
  • After the application is received, FERC authors a draft Environmental Impact Statement (EIS). This draft is then opened for public comment, with a series of local hearings held before a final draft is issued.

Eminent Domain

Once FERC approves a pipeline, the developer may exercise the power of eminent domain to acquire needed land they have been unable to secure through negotiation.

Requests to exercise eminent domain are submitted to federal court. If the court agrees that the land is necessary for the public benefit, it may authorize transfer of it to the developer, determining a fair market value for the parcel.

A NH constitutional amendment passed in 2006 forbids the state from exercising the power of eminent domain for any privately-owned projects. However, as interstate pipeline projects are subject to federal authority, the NH amendment cannot prevent those that are approved by FERC from using eminent domain.

Local Utilities

In the fall of 2015, the NH Public Utilities Commission announced it had approved a 20-year deal allowing Liberty Utilities to transport up to 115,000 dekatherms of natural gas from the NED pipeline to local customers. This was the only arrangement that would have seen fuel transported to the pipeline used in the NH market. 

State Policy Issues

Despite the fact that federal authority trumps any efforts by states to regulate the construction of interstate pipelines, several bills related to pipeline development have been considered in the NH Legislature.

Notably, a provision in a 2015 bill that would have required a pipeline company to purchase the entirety of a piece of property when trying to take a parcel through eminent domain was eliminated after analysis revealed that the regulation would be essentially ineffective in the face of federal authority.

Related issues:

Northern Pass

 

 

PROS & CONS

"For" Position

By LFDA Editor

NH officials should support the NED pipeline

  • The NED pipeline will increase NH’s access to natural gas, an efficient and cost-effective fuel, expanding service to communities which currently do not have it.
  •  The pipeline will help stabilize and lower energy costs in the region, with one study estimating it could save consumers from $2.1 to $2.8 billion per year.
  • The pipeline would allow for the possible creation of a natural-gas fired power plant to replace retiring facilities such as the Pilgrim Nuclear Generating Station, which is set to close in 2019.
  • The project will lead to millions in both state and local tax revenue and will create hundreds of construction jobs. 

"Against" Position

By LFDA Editor

NH officials should do all in their power to oppose the NED pipeline

  • The pipeline will lower property values on adjacent lots and expose residents to the danger of accidents or disasters.
  • The project continues the region’s reliance on fossil fuels, which have a greater impact on the environment than renewable energy sources.  
  • It is unfair that some residents may have their land seized by eminent domain for a project that may not ultimately benefit them.
  • The project has not demonstrated a clear public benefit to justify the impacts on the NH environment and on local property-owners.

LEGISLATIVE HISTORY

Killed in the House

Requires that every compressor station for natural gas transmission built in New Hampshire after July 1, 2016 shall obtain the power for its operation from external energy sources.

Killed in the House

Requires owners of gas transmission pipelines to maintain insurance or provide a bond against any loss resulting from failure or malfunction of a pipeline.

Signed by Governor

Establishes a study committee on stranded costs associated with pipeline capacity contracts. The bill was originally written to require the public utility commission to determine whether any pipeline capacity contract with a term of more than one year is in the public interest.

Killed in the House

Requires utilities and pipeline companies to pay a royalty on natural gas intended for sale in a foreign country.

Killed in the House

Establishes a tax on revenues received under contracts for natural gas transmission via in-state pipelines.

Killed in the House

Requires new construction of underground pipelines and storage tanks to be below the frost line.

Interim Study

Prohibits any tax or fee on ratepayers to fund a gas pipeline.

Signed by Governor

Originally written to require a pipeline company to purchase all of a resident's land when the land is taken through eminent domain.  The Senate rewrote the bill to instead increase the criteria for the Site Evaluation Committee to consider when approving pipelines.

Killed in the House

Establishes a 5-year tax deferral from the business profits tax, the business enterprise tax, and the utility property tax for the expansion of natural gas distribution systems.

Signed by Governor

Establishes certain "energy infrastructure corridors," for example along I-95, and sets up an application process to build energy infrastructure in these corridors.

Signed by Governor

Implements goals of the state 10-year energy strategy prepared by the Office of Energy and Plannng. The strategy includes, for example, the development of an incentive plan for the private construction of public charging stations for alternatively fueled vehicles.

Should NH lawmakers support or oppose the Northeast Energy Direct Pipeline?

Comments

Bev Edwards
- Templs

Wed, 10/28/2015 - 12:24pm

Where is NH’s Consumer Advocate when we really need one?

It is shocking to discover that not only was a decision made back in July to not reappoint NH’s Consumer Advocate, Susan Chamberlin, to another term,  but that to-date there are no recommendations for her replacement. NH ratepayers can only wonder if finding a replacement has been a low priority for the state body responsible for such appointments, the Residential Ratepayers Advisory Board (RRAB).

Particularly during this time of critical decision-making regarding all the competing companies anxious to convince our state to buy more energy infrastructure, it would seem self-evident that our consumers need an advocate. Was the PUC protecting consumers when they recently approved a tariff on ratepayers for pipeline construction costs, such as the $5 billion price tag for Kinder Morgan/TGP’s way over-sized proposal?  If it gets approved, now we’ll be paying their costs so they can make profits, largely with their exports, after they tear apart 80 miles of our state, through 17 towns, 40 NH conservation lands, 822 NH families’ back yards, polluting our rivers, aquafirs, wells, soil and air as they go, and raising our prices for electricity not lowering them, as they continue to say. It's a win-win for them…a lose-lose-lose for NH! 

But the public is gradually coming to realize that myths have been propagated to grease the path for selling these pipelines:

  1. So-called “natural gas” is advertised as a “cleaner fuel”, when it’s actually fracked gas, methane – a greenhouse gas more potent for climate degradation than CO2!
  2. We’re told that we have an “energy crisis”, which last winter’s falling demand and wholesale energy prices proved to be false.
  3. And they claim that more fracked gas will lower our costs- when it will actually raise them.The NH OEP 10 Year State Energy Strategy states, we need fuel diversity to avoid price volatility, and we’re already over 50% on fracked gas. The Energy Information Administration (EIA) sates, prices for “natural gas” will rise as a result of its exportation, which KM is intending to do with the majority of the gas that would travel through its pipeline in NH. Add to that the tariff on ratepayers for pipeline construction costs, and voila….price reductions, particularly from the Kinder Morgan/TGP pipeline, are a myth.

We’re finally waking up to how the story of the NE “energy crisis” was formed and how it has been used to enable and even invite potentially harmful decisions regarding NH and NE’s energy policies. By now our elected and appointed state officials must also realize that the volatility in the electric market during the winter of 2013/14 which later caused our prices to jump sky high, was caused in large measure by grid mismanagement and an increasing reliance on one fuel—“natural” gas. As Meredith Hatfield, Director of the NH OEP, recently wrote in a letter to the PUC, “The reliance on one fuel, namely natural gas, is what caused the wholesale price spikes in the winter of 2013-2014 in the first place.” And by spawning the notion that NE had an “energy crisis”, it gave the fracked gas industry its excuse to put its foot in the door to try to sell us more pipelines. At least, that’s what their rationale is on face value, certainly more benign than looking like market manipulation.

The fact is, we did not have an “energy crisis” last winter. According to the President of the NE Power Generators, in a March 4, 2015 article by the Power Plant Owners, “This winter, not only is there still the same amount of pipeline (as there was in ‘13/’14), but also a major nuclear plant and a big coal plant have been retired….and electricity prices (wholesale) dropped 60% from Jan. 2014 to January 2015”.

In April, NE had the lowest energy demand in 12 years and lowest energy wholesale prices in 16 years, as reported by the ISO-NE….with no new pipelines and after the retirement of 4 power plants.

 Nevertheless, four separate natural gas pipeline companies found their way into NE, bringing seeming “solutions” for the loudly proclaimed “energy crisis”.  Meanwhile, Distrigas has signed a 10 year LNG (liquid natural gas) contract to provide all the energy needed for NE’s winter peak demand without heavy ratepayer construction costs and massive damage to our environment. We’re covered! 

We can use LNG as the simplest, least destructive and most cost-effective bridge to the clean, smart energy future we’re moving toward. Meanwhile, if we raise or eliminate the caps on solar rebates and incentives and increase our investments in energy conservation we can simultaneously continue to create more well-paid permanent in-state jobs.

What we need is a Consumer Advocate who can see through the rush to “resolutions” that will harm not help NH's consumers. We need an advocate who is not swayed by the spin of an exaggerated "crisis" or charmed by those wanting to "solve" it for us.  We need a Consumer Advocate who thinks level-headedly and makes recommendations based on facts and reality, focused on fairness to NH's consumers.

If residents ever needed an advocate it’s now.

 

 

Albert Lefebvre
- Rindge

Wed, 10/28/2015 - 8:24am

Rhe proposed pipeline is not needed.  NH does not have and will not have a natural gas shortage.  KM/TGP is supporting television advertisements that erroneously scares the public into thinking that there is a gas shortage that will affect fuel availability.  These ads also erroneously scares the public into thinking that without gas electricity costs will rise while failing to mention that our costs will rise to pay for any new pipeline.  The FERC needs to monitor these advertisements and call KM/TGP to task for their scare tactics.  FERC needs to properly advise the public of correct information.

 

On another issue, the EPA of August 18, 2015 announced that it was submitting new standards for both methane and volatile organic compounds.  Methane is greenhouse gas and is one of the country’s largest emitter of methane.   These gases endanger both the public health and public welfare of current and future generations.  Since 1990, natural gas systems (such as the KM/TGP pipeline) were cited as being the single largest contributor of US man-made methane emissions (per EPA Regulatory Impact Analysis.  This was supported in part by industry information released under the Greenhouse Gas Reporting Program.)

 

Since methane gas emission is such a major problem for the environment and the public, why should the KM/TGP pipeline go forward? The pipeline is not needed and will cause serious environmental issues.  Why build this pipeline when its emissions will raise the level of methane gas emissions?  This pipeline will only add to gas to the pipeline when the country’s goal is to reduce these types of emissions; building it only adds to the problem.  The pipeline flies in the face of basic common sense.

Susan Wessels
- Rindge

Wed, 10/28/2015 - 5:52am

If you think this doesn't affect you, think again. Unless you're off the grid in NH, you will be paying for this $5B project in the form of an electric ratepayer tariff. Kinder Morgan will not be paying for their export line, you will be!  And these payments will go on for as long as the eye can see. Pipelines beget pipelines. This is just the first phases of a 20-year buildout of pipelines planned for the Northeast.  We pay, they gain.  This would be precedent-setting. Never before has the public been required to pay for a project built by a private company for its own profit.  But this is what will happen if NED is approved.

The gas industry holds sway over many of our politicians -- of both parties.  Those who seek to hold political office seek contributions to finance their campaigns. They don't want to bite any hand that might feed them.  Our Governor has failed to re-appoint our single most effective and outspoken consumer advocate, Atty Susan Chamberlain, who was on record as opposing NED.  

It is up to us, the people, to fight this battle. We are up against a true goliath.

T. Freed
- Hollis

Wed, 10/28/2015 - 12:10am

This project is much bigger than it appears to those who don't live in the southern part of the state.  The rest of the state thinks natural gas will be cheaper once NED gets built, but simple economics - and experience elsewhere in the country - indicate otherwise.  Note that the Public Utilties Commission has thrown out the consumer advocate.  Why? Because she was highly skeptical of any plan to have every electric ratepayer in New Hampshire paying a tarrif to fund a $4billion project that clearly is designed to ship a significant amount of American natural gas offshore, and that on the backs of homeowners and carefully preserved wild public lands.  And once that gas is off-shore, we'll be competing on price with other countries who are accustomed to paying a great deal more for it.  It's all but guaranteed that the pipelines would then spread even further into New Hampshire, digging up many more homes and conservation lands.  Many people who live outside the current NED path curl their lip at southern New Hampshire and call us NIMBY complainers, but should that pipe reach into your property by force of Federal power, take your land at a pittance and leave your property scarred, polluted, unsafe, and undervalued PLUS result in NO GAS for your community, no gas for power plants, only a modicum for heating which last winter proved New Hampshire certainly does not need, you will join the rest of us who say  Not In ANY Back Yard.  

Patricia Martin
- Rindge

Tue, 10/27/2015 - 11:53pm

Are our State leaders (Governor Hassan) willing to entrust 71 miles of pristine New Hampshire land to a company with a BBB- rating?  http://seekingalpha.com/article/3609826-kinder-morgan-the-story-of-icarus

"The company has well over $40 billion of debt. It is one of the largest investment grade corporate issuers, and that Baa3/BBB- rating hangs in the balance as the major credit agencies hold it only one notch above junk status. Even without a formal downgrade, its bonds already trade "wide" of the benchmark for comparable investment grade issuers and it would have difficulty trying to come to market. It is also now boxed-in to an unsustainable dividend policy that supports the common equity. And it badly needs cash to fund future growth."

This is a welfare project for the gas industry,  While Iowa switches from coal to wind (bypassing fracked gas), New Hampshire gets stuck being the captive customers tied to a 20 year contract.  Even worse, most of the gas is likely planned for export.

 

Patricia Martin
- Rindge

Tue, 10/27/2015 - 5:34pm

One of the big issues is that this pipeline is not being considered in context with other pipeline projects and that both the NED and the Spectra Access Northeast pipelines are eyeing funding via electricity ratepayers.  Incredibly, our NH PUC staff say that they're fine with that!  This smells a lot like the Merrimack Plant Scrubber to me. 

Another outrageous incident is the failure of the Governor to reappoint the Office of Consumer Advocate litigator, Attorney Susan W. Chamberlin.  Attorney Chamberlin has been skeptical of these large energy infrastructure projects and in the first hearing of the PUC Docket 15-124 which supports the electric ratepayer tariff, she said, "I'll be following the money."  Now, the word is that OCA Chamberlin is not being reappointed because she doesn't have a grasp of energy issues.  I think her grasp is just perfect!  They just don't agree with her and want her out of the way.

OCA Chamberlin should be reappointed.  No other candidate for that office is going to be acceptable to ratepayers this late in the game! 

Thank you for covering this issue.  Please help us make a big deal over this steamrolling of ratepayers to benefit the gas utilities.

LEAVE A COMMENT

Log in or register to post comments

Issue Status

In April 2016, Kinder Morgan announced that they were suspending the Northeast Energy Direct Pipeline project indefinitely, citing a lack of interest from prospective customers.

 

CONTACT ELECTED OFFICIALS » 

Here in NH, your opinion counts. We make it easy to find and reach out to your elected officials about the issues that matter most to you. Click to search and contact your elected officials!

Join CCNH-LFDA

Join our constantly growing community. Membership is free and supports our efforts to help NH citizens become informed and engaged. 

JOIN TODAY ▸

©2015 Live Free or Die Alliance | The Live Free or Die Alliance is a 501(c)3 nonprofit organization.