The Tribune Democrat, Johnstown, PA

News

January 11, 2014

Pa. vying to be global energy leader

HARRISBURG — Gas drilled in the fields of Pennsylvania’s Marcellus Shale will soon be shipped to Japan, in a deal announced by Cabot Oil and Gas in December. The gas will be exported through a Maryland facility originally built to import gas.

It’s one of about a half-dozen large-scale efforts to move the Keystone State’s gas to the rest of the world, as Pennsylvania quickly emerges as a global energy powerhouse.  

Fuel extracted from the Marcellus Shale could soon spread through pipes stretching across and out from the state like tentacles - north into New York, south into Maryland, and west to Ohio and Kentucky.

Some projects involve existing lines feeding new processing plants. Others involve hundreds of miles of new pipes.

State Sen. Gene Yaw, R-Lycoming, said Pennsylvania must act quickly to shape up that infrastructure.

The success of gas drilling industry in the Marcellus Shale has renewed interest in shale deposits around the globe, notes Yaw, who chairs the Senate environmental resources committee and whose district is in the middle of the shale region in the state’s northern tier.

“The question is, who sells gas to western Europe?” said Yaw.

It could be Pennsylvania. It could be Russia.

Immense projects

A push for a new natural gas infrastructure comes as the state’s existing lines near capacity, and as demand for Pennsylvania’s gas grows.

Historically, most lines were built to move gas in, rather than out, said Nicole Jacobs, spokeswoman with the pro-drilling Energy In Depth.

The state’s gas boom arrived quickly. In 2012, Pennsylvania produced more than 2.2 billion cubic feet of natural gas, a nearly 60 percent increase from the previous year and four times the production in 2010, according to the U.S. Energy Information Agency.

Projects planned to handle that gas are immense.

The Constitution Pipeline would move gas through a 125-mile pipe, from northeastern Pennsylvania into the New York City and New England markets.

The Constitution Pipeline Co. estimates it will spend

$683 million during the first three years of planning and building. Researchers estimate the project will create 1,300 construction jobs, and lead to about a dozen permanent ones.

Construction could start this summer, pending federal approval, with gas delivered as early as the spring of 2015.

The Bluegrass Pipeline would begin in Mercer County and connect to pipelines eventually leading to the Gulf of Mexico. It would move propane and other natural gas liquids.

Who benefits?

These projects aren’t without controversy, however.

Bruce Baxter lives in New Jersey but owns a Christmas tree farm in upstate New York. With a son in college and another in high school, he’d been considering how to reinvent the farm to survive for the next generation. He hoped to build an aquaponics facility, growing fish in ponds then using waste from fish production as vegetable fertilizer.

The Constitution Pipeline would smash that dream with a 600-foot swath across his farm.

Baxter said the easement needed by the pipeline and its location would leave half of the property unusable. For that, pipeline agents offered him $5,000, he said.

The pipeline “is not for my benefit,” he said. “It’s for Wall Street.”

Baxter said he likely will force the company to acquire an easement through eminent domain, in proceedings that leave a judge to determine the easement’s value.

A Constitution Pipeline spokesman said offers to landowners are “fair compensation” and take into account the pipeline’s impact on the remainder of the property.

“In some cases, our offer is up to three times higher than the value of the appraisal in order to ensure our agreement is mutually beneficial,” said Constitution Pipeline Co. spokesman Christopher Stockton.

“If the landowner still believes our offer isn’t fair, they don’t have to sign an agreement with us,” Stockton said.

The value  would then be determined by a judge.  

Eminent domain only comes into play for multi-state pipelines, said Dan Brockett, of Penn State Extension. First, the federal government must determine that a pipeline meets requirements for public convenience and necessity.

Avoiding failure

Landowners aren’t the only ones concerned about pipeline expansion. Environmental groups are railing about risks associated with moving natural gas across the countryside.

In December, about 50 protesters rallied outside the Sunoco offices in Philadelphia to express concern about the Mariner East project, which like the Bluegrass Pipeline would move propane and other natural gas liquids.

Mariner East would move 70,000 barrels of gas per day 300 miles, mostly along existing pipelines, from western Pennsylvania to southeastern Pennsylvania.

Iris Bloom, director of Protecting our Waters, one of the groups leading the opposition to Mariner East, noted concerns about air quality associated with gas processing  and the safety of moving the gas hundreds of miles.

In August, a pipeline carrying natural gas liquids exploded in Illinois. In November, an explosion in Texas forced the evacuation of the town of Milford.

A spokeswoman for the state Public Utility Commission said companies operating pipelines have a strong incentive to avoid catastrophes.

“It’s not really in the company’s interest to have a pipeline failure,” said commission spokeswoman Jennifer Kocher.

The commission inspects pipelines in populated areas. A dozen inspectors oversee 1,078 miles of pipeline in the state, said Kocher. Lines are typically buried, so inspectors visually check pipes before they are buried. Later, inspectors check to ensure operators are properly monitoring the pipelines.

Racing to market

Proponents of pipeline expansion note the economic potential, not just of pipes but of other natural gas facilities, as well.

Converting the Cove Point liquid natural gas plant in Maryland, for example, will create 3,000 construction jobs and lead to 74 permanent jobs.

In Beaver County, Shell estimates that a plant to convert ethane into gases used to make plastics could employ several hundred people and lead to the growth of related businesses.

Yaw, the senator from Williamsport, said the state could benefit from other opportunities, as well. For example, he’d like to see a pipeline from the state’s northern tier to Philadelphia, so the port could be used to export natural gas.

“There is a huge investment in this equipment,” he said, noting that Pennsylvania is in a race with other areas to get these facilities online.

“Whoever makes that investment will then have a competitive advantage,” he said.

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