Second Schoharie County gas pipeline proposal comes to light
Both would tap into Marcellus shale
SCHOHARIE COUNTY A second major gas company is eyeing Schoharie County for the path of a new pipeline from northeastern Pennsylvania.
Oklahoma-based Williams Partners, under a joint venture with Texas-based Cabot Oil & Gas, is proposing the 120-mile Constitution Pipeline to transport natural gas — much of it from Cabot’s Marcellus shale production — to growing markets in the Northeast.
The proposal, announced Tuesday, is unrelated to the project being considered by the Tennessee Gas Pipeline Co., a subsidiary of Texas-based El Paso Corp.
Both projects are aimed at getting natural gas to the compressor station in the town of Wright, along the border of Albany County, a hub for transport. Both are spurred by the growing amount of gas being pumped from the Marcellus shale deposit.
Either project would bring a boost in tax revenue for cash-strapped municipalities in the county; either would also likely be greeted with some concern in the county, where one of the three existing pipelines has a record of leaks and explosions.
Williams Partners spokesman Chris Stockton said there’s existing infrastructure available up the Northeast coast and growing gas supplies in Pennsylvania.
“We’re trying to basically build a bridge to get that gas to market, and that’s what this project is designed to do,” he said.
As New York state has wrestled with regulations on hydrofracking for gas in the Marcellus shale, companies have established major production in Pennsylvania.
That supply is “still a relatively new phenomenon, and now the infrastructure needs are catching up,” Stockton said.
“For a little while there, I think folks were waiting to see to make sure that [Marcellus shale] gas was going to be a reliable source. Now, the market has enough confidence that this is a long-term, sustainable supply source,” he said.
That means companies are willing to invest in infrastructure to bring that gas to buyers, he said.
Officials in Schoharie County learned earlier this month that representatives from Tennessee Gas Pipeline were surveying possible routes and speaking with landowners and municipalities about a pipeline to run from Pennsylvania to the town of Wright.
Both projects would be subject to the oversight of the Federal Energy Regulatory Commission, but neither has been submitted to FERC as a formal proposal.
El Paso spokesman Richard N. Wheatley said the Constitution Pipeline proposal doesn’t affect his company’s consideration of a new Tennessee Gas Pipeline. But the fact that there are two such proposals supports the conclusion of research by the industry that there isn’t enough infrastructure to get gas where it’s needed, he said.
Several issues factor into demand, including a decline in supplies imported from Canada. Also, power companies are switching from coal-fired to natural gas electricity-generating plants with an eye on a cleaner environment at a time when growth in the Northeast is expected to boost demand for electricity.
“It really equates to the need for more pipeline capacity,” Wheatley said.
Though the overall effort is a response to demand and other market factors, Stockton at Williams Partners said a successful pipeline project would mean benefits for Schoharie County and landowners.
For one, landowners who host the pipeline are paid for an easement and, after construction, the land is restored as closely as possible to original condition.
The most significant financial benefit locally is tax revenue — pipelines generate property taxes.
“In many of the states that we operate, we are among the highest taxpayers in the entire county. It can be a significant source of revenue at the local level and doesn’t require anything from the local government,” Stockton said.
Many residences and businesses in Schoharie County are using bottled gas due to the lack of local pipelines branching to properties.
Stockton said Williams Partners is a transmission company, not a utility like National Grid or NYSEG, which pipe natural gas to homes and businesses in the Capital Region, so it’s unclear if a new pipeline would afford that option in Schoharie County.
But he said the existence of a pipeline could make it easier for utilities to justify putting in smaller distribution lines.
“Having that natural gas source can be a contributing factor,” especially when it comes to economic development, Stockton said.
“In other states and other parts of the country, you’ll see industries or plants that will site specifically near those pipeline facilities,” he said.
“We want this to be a win-win situation,” he said.
The El Paso/Tennessee Gas project is a bit ahead of the Williams Partners/Cabot proposal.
Tennessee Gas last year announced it was considering expansion of its transmission system and called on buyers to determine if there was sufficient demand for it to do so — a process called an “open season” in the industry. Following a positive response, the company continued its evaluation.
Williams Partners/Cabot announced an open season this week and will await responses, then determine from that demand whether to go forward. The research would lead to an application being filed with FERC to begin the regulatory process, which involves public input.
Other applications to conform with state and local regulations would also have to be submitted.
Schoharie County is situated geographically between major supply hubs in Pennsylvania and the compressor station in Wright, from which gas supplies can be transferred further east. That puts the county in the position to consider various factors, Esperance town Supervisor Earl Van Wormer III said Tuesday.
“The one thing I think we all are concerned about is if this pipeline is put in the ground, is it going to be safe,” Van Wormer said.
The county has seen one catastrophe and two close calls with a pipeline — the former TEPPCO pressurized propane line that travels from Watkins Glen through Schoharie County to Selkirk. The line killed two people when it blew up and leveled North Blenheim in 1990.
It destroyed a home in another explosion in 2004 in Delaware County just south of Schoharie County and caused a major evacuation in Gilboa when it leaked again in 2010.
“That was a real disaster, back a few years ago, and we almost had another potential one,” Van Wormer said.
But the county also hosts the Tennessee Gas pipeline that runs east to west along northern Schoharie County and the Iroquois Gas pipeline that runs north to south in the county’s eastern half — and there’s been “not one single incident” from those, Van Wormer said.
With Schoharie County bleeding property value and taxpayers following devastation from Tropical Storm Irene, economic development from a pipeline could be seen as a positive, he said.
“I would view it with, I guess you could say, some caution and some concern. But at the same time, if it’s actually done safely, it could be a benefit,” Van Wormer said.
He said there’s hazards in most big projects, and the ultimate question is whether the benefits outweigh the risks.
“If it’s done properly and people who regulate that hold their feet to the fire, than it could be a real benefit. But we have to make sure that these people are held accountable and everything is done right,” Van Wormer said.