Kinder Morgan Suspends $3.3 Billion Gas Pipeline Project

The Northeast Energy Direct project included a “Haverhill Loop.”

Massachusetts Attorney General Maura Healey.

Massachusetts Attorney General Maura Healey.

The company proposing to build a new natural gas pipeline said this afternoon it has “suspended” further work on the project, citing market conditions.

The proposed $3.3 billion Kinder Morgan fracked gas pipeline, which would have passed through Andover and included a “Haverhill Loop,” was known as its Northeast Energy Direct (NED) project. The company and its subsidiary, Tennessee Gas Pipeline Company said it did not receive enough commitments from local gas companies, electric companies and other “market participants in New England” to make the project worthwhile.

“Unfortunately, despite working for more than two years and expending substantial shareholder resources, TGP did not receive the additional commitments it expected. As a result, there are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured,” said a statement issued by Richard N. Wheatley, Kinder Morgan’s director of corporate communications/public affairs.

Back in November, Massachusetts Attorney General Maura Healey said a study commissioned by her office had already determined the region is unlikely to face electric reliability issues in the next 15 years and additional energy needs can be met more cheaply and cleanly through energy efficiency and demand response.

“As we make long-term decisions about our energy future, it’s imperative we have the facts,” said Healey. “This study demonstrates that we do not need increased gas capacity to meet electric reliability needs, and that electric ratepayers shouldn’t foot the bill for additional pipelines. This study demonstrates that a much more cost-effective solution is to embrace energy efficiency and demand response programs that protect ratepayers and significantly reduce greenhouse gas emissions.”

In July, 2015, Kinder Morgan’s board announced it had authorized Tennessee Gas to proceed with the project’s “market path” segment from Wright, N.Y., to Dracut “to help alleviate New England’s uniquely high natural gas and electricity costs caused by severely limited natural gas transportation capacity currently serving the region.”

Today statement said, “The insufficient contracted capacity is due to several factors. They include the fact that the New England states have not yet established regulatory procedures to facilitate binding EDC (electric distribution companies) commitments, that the process in each state for establishing such procedures is open-ended, and that the ultimate success of those processes is not assured.”

The company also blamed “a low-price environment” that “has made it difficult for producers to make new long term commitments.”

Tennessee Gas has operated in New England for more than 60 years. “Although we have suspended work and further expenditures on the NED project, TGP will continue to work with customers to explore alternative solutions to address their needs, particularly local distribution companies that are unable to fully serve consumers and businesses in their areas because of the lack of access to abundant, low-cost domestic natural gas,” the statement said.

4 thoughts on “Kinder Morgan Suspends $3.3 Billion Gas Pipeline Project

  1. It takes several years to get anyone to agree on ANYTHING! NOW IS THE TIME TO PREPARE FOR THE FUTURE or face the consequences. Jack is right! Ten years from now we will wonder what happened when we do not have a sufficient amount of natural gas. Is it any safer to have railroads haul this stuff all over the country? No it isn’t…

    • Well said Slipper. Just like much that happens in Haverhill. There is no forward thinking. Everything waits until it is an emergency. Mitchitson has been right for a decade. There is never any planning for the future. Wait until it breaks, then fix it at a much higher cost. See: Hunking school. See: Haverhill high school. See: Anything in Haverhill.

      Ask people who work for the gas company. They will tell you how many times the flow of natural gas has been critically low. Ask those people who are still on oil or electric who would love to switch to clean burning natural gas. The lefty whackos who hate fracking are to blame for the scare tactics used during this debate. Debate is good and needed during projects like this. But dishonest debate by scaring people is not helpful for future issues that will arise.