By Anthony Lucivero, Advocacy Fellow
On Wednesday, April 20th 2016, Kinder Morgan announced the cancellation of the planned natural gas pipeline to Massachusetts. Kinder Morgan was working as part of the Tennessee Gas Pipeline Company for the past two years to extend a pipeline through Massachusetts and lower New Hampshire. The pipeline would have brought natural gas up from Pennsylvania to meet the anticipated demand for more natural gas for home & building heating and for electricity generation. Approximately half of the state's electricity generation is from natural gas.
However, due to massive political and community opposition, the project is no longer moving forward. This is a landmark victory in the effort to de-carbonize Massachusetts's energy supply, as well as protecting the environment from the impacts of constructing the pipeline itself. The Mass Pipeline Awareness Network has led a coalition of groups in opposition to this pipeline.
Kinder Morgan said the reason for cancellation was that the market for the natural gas is not ready, with gas distributors, power companies, and other market players not biting on contract commitments for the supply of natural gas. “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. In addition, innovations in production have resulted in a low-price environment that, while good for consumers, has made it difficult for producers to make new long-term commitments. Further, current market conditions and counter-party financial instability have called into question TGP's ability to secure incremental supply for the project. Given these market conditions, continuing to develop the project is not an acceptable use of shareholder funds.”
Source: Boston Globe, Kinder Morgan, Tennessee Gas Pipeline Company
The Environmental League of Massachusetts has stated that “Kinder Morgan is stopping the pipeline simply because it is both expensive to ratepayers and simply not needed…Massachusetts has the capacity to develop its own energy in solar, wind and hydro and create new industries and jobs here, rather than importing energy and exporting our dollars and jobs.”
The study “Power System Reliability in New England” performed by Attorney General Maura Healey's office in November 2015 found that gas pipelines are not needed, as the power grid will not meet a substantial shortfall until 2030. The report concluded that the best method to approach investments in future power supply are incentives for homeowners and businesses to reduce electricity use and voluntary demand-response programs. The report said that the $101 million investment into such programs would result in $247 million in savings and reduce greenhouse gas emissions by 1.86 million tons. On the other hand, the report has found that expansion of the Northeast’s natural gas pipeline capacity to meet the future potential energy shortfall would cost $66 million and provide savings of $127 million, while resulting in an increase of greenhouse gas emissions by 80,000 tons.
There are still other pipelines…well…in the pipeline. Spectra Energy is planning a pipeline project which will likely face similar market and grass-roots political challenges.