With Kinder Morgan Pipeline Out, Attention Shifts to Other Energy Projects

Apr 21, 2016

Energy company Kinder Morgan announced yesterday it is shelving plans for its controversial natural gas pipeline project through Southern New Hampshire. The news will likely increase the focus on other infrastructure projects in the region.

Kinder Morgan said in a statement yesterday that their decision to stop work on the pipeline was based on “inadequate commitments from prospective customers.” In other words, there weren’t enough customers lined up to buy the gas it wanted to pipe through New England.

Kinder Morgan did not cite as reason the local opposition the project had stirred up. But opponents like Elisa Benincaso with the New Hampshire Pipeline Awareness Network are treating the announcement as nothing short of a victory.

“We are elated. We feel like David who slew Goliath. The support that we eventually got in the legislature and among the congressional delegation and many others along the entire path did make a difference.”

Whether because of political opposition or market forces the Kinder Morgan pipeline is now out of the picture.

And that means attention will likely shift to other infrastructure projects in the region.

“I think what it does is it increases pressure on regulators to approve one or more of the remaining infrastructure projects,” says Jim Roche, president of the New Hampshire Business and Industry Association. And while the BIA didn’t take a position on the Kinder Morgan pipeline, Roche says industry in the state needs something.

Constraints on the gas pipeline network have pushed up electricity rates in the state, enough for Roche’s organization to call it a crisis.

“The only way we bring down high electrical energy costs in the near term is by adding infrastructure – new pipeline, new transmission that brings in new supply and lowers the cost," Roche says.

There’s a proposal that aims to do just that. It’s another natural gas pipeline called Access Northeast. This project, backed by Eversource, would run from Pennsylvania to Boston. And unlike the Kinder Morgan project, Access Northeast would be built almost entirely along existing pipeline routes. It also wouldn’t even enter New Hampshire, so the political atmosphere and any opposition will look quite different here.

Still, the project has hurdles to clear, including whether state regulators will allow electrical companies to bill their customers for the cost of buying space on a natural gas pipeline. That’s something that’s never been done before.

There’s also another project: Portland Natural Gas Transmission System’s Continent to Coast project. This proposal would beef up pipeline capacity between Portland, Maine and Montreal.

It’s unclear whether either of these projects will materialize.

“You know the nature of building out infrastructure in the energy industry has always been lumpy.”

Paul Hibbard is with the Analysis Group, an energy consulting firm. He says the Kinder Morgan pipeline was unique for how much opposition it inspired, but the fact that it never came to be is actually pretty normal.

“These types of projects very often begin and don’t end. You know there are a lot of pipeline proposals that have gone forward and some that haven’t, so to me this is something that’s in the normal course of business.”

In other words, if you’re an average rate payer in New Hampshire, don’t expect much to change any time soon.