Kinder Morgan Suspends NED Pipeline Project
April 22, 2016
On Wednesday, Kinder Morgan, a subsidiary of Tennessee Gas Pipeline Co., suspended any further work and spending on its Northeast Energy Direct (NED) natural gas pipeline project due to insufficient commitments from prospective customers. The company has neither the necessary resources nor an expectation of procuring them in order to continue to work on the project. It attributed this dearth to a lack of regulatory procedures in New England states to help facilitate any commitments to the project. Additionally, Kinder Morgan asserted that the low-price environment and current market conditions played a role in their failure to secure adequate project funds.
Last summer, the company moved forward with a $3.3 billion investment for the project, based in part on approval stemming from contractual commitments and the expectation that various electric and gas utilities would also commit. In November, it previously proposed to break the pipeline down into two parts: the Supply Path component (which would bring natural gas from northern Pennsylvania to Wright, New York) and the Demand Path (which would bring natural gas from Wright, New York, to Dracut, Massachusetts, New Hampshire, and even Connecticut). New England is a region that has experienced high energy prices the in recent years (the polar vortex of 2013-2014 and the extremely cold and snowy 2014-2015, to give a couple of examples) due to capacity constraints, significant market demand, and an increasing reliance on natural gas. The company claimed all along that the pipeline would serve as a solution to these problems.
Environmental groups, municipal governments, and affected homeowners are thrilled with this news. They have repeatedly opposed the pipeline project in various ways. For example, activities under the Sugar Shack Alliance have planned an intergenerational walk from Windsor to Northfield on March 17-20 to protest the pipeline. In the past, the Federal Energy Regulatory Commission (FERC) held “scope” meetings to allow members of the public to make suggestions for helping to determine the scope of its environmental analysis for the project.