The Federal Energy Regulatory Commission last week unanimously approved construction of the Iroquois Gas Transmission System to serve Connecticut and New York markets.
Independent producers had fought the project, designed to import Canadian gas.
Iroquois plans to lay a $582.6 million pipeline to move 575.9 MMcfd. The pipeline is to connect with TransCanada PipeLines Ltd.'s system near Waddington, N.Y., and extend through Connecticut to South Commack, N.Y., on Long Island.
About 80% of the gas is to go to local distribution companies in Connecticut, Massachusetts, New York, New Hampshire, New Jersey, and Rhode Island, and the rest to electric power generating firms.
FERC gave the project its general approval in July but because of objections raised by U.S. independent producers ordered an administrative law judge to conduct a hearing on the line's rates and demand for its gas.
Judge Walter Alprin reported back that Iroquois was needed, had reasonable growth rate projections and capital and rate structures, and would not displace U.S. gas supplies (OGJ, Sept. 17, p. 35).
Iroquois Pres. Robert Reid said, "it was imperative that we receive FERC approval in November to maintain our timetable for constructing the pipeline."
New York and Connecticut have issued permits for the line. Reid said Iroquois now can complete its route acquisition program. It has negotiated easements for about 40% of its route on a voluntary basis and will continue to seek voluntary easements with the remaining landowners, although the FERC certificate gives it the right of eminent domain.
REACTIONS
Paul Hilliard, chairman of the Independent Petroleum Association of America, said, "FERC is making a grave mistake in approving the Iroquois project without taking into account the effect of pipeline transportation rate design on our ability to compete for markets in Canada and the U.S.
"We have long supported the concept of free and fair trade for North American natural gas, but FERC's decision not to level the playing field means free trade is not fair trade.
"This decision will not merely discriminate against domestic producers competing for incremental markets. Instead, we will see our traditional markets invaded by Canadian gas with an artificial advantage.
"Such a circumstance is abhorrent to independent producers who are willing to compete and who would rather compete than complain. But, so long as FERC fails in its responsibility to assure a square deal for all natural gas suppliers, we must continue to protest."
Nicholas Bush, president of the Natural Gas Supply Association, disagreed. NGSA represents larger gas producers.
Bush said, "FERC is to be congratulated for conducting a thorough, fair, and balanced review of the Iroquois project. The commission's 5 0 vote in favor of the application should bring this matter to rest.
"Natural gas is expanding in...a newly significant market that will open substantial opportunities for domestic natural gas producers. Canadian producers will get strong competition to develop and expand this market."
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