Pipeline Approved by FERC

FERC has approved the Spectra Pipeline 3 weeks ahead of the earliest anticipated date, apparently reacting to requests for expedited approval from Con Ed, PSC and the Mayor’s OfficeStay tuned for next steps, we’ll update you shortly. Excerpts from the 68-page document, for your reading displeasure:

May 21, 2012, 
Certificates of public convenience and necessity are issued to Texas Eastern and to Algonquin, authorizing the construction and operation of the NJ-NY Project facilities.

Texas Eastern estimates the cost of its portion of the NJ-NY Project to be $789,493,884. Algonquin estimates that the cost of its portion of the project will be $67,524,524. Texas Eastern proposes to charge incremental recourse rates for firm and interruptible transportation service to recover the costs associated with the construction of the proposed facilities as well as the leased capacity.

in deciding whether to authorize major new natural gas transportation facilities, the Commission balances public benefits against potential adverse consequences.

Opponents question the need for the project. They contend that the project is being put forth to create future demand for gas rather than to fulfill existing demand . . . or that any increase in demand can and should be met by relying on renewable sources of energy and by efforts to conserve energy. . . we conclude that these cannot serve as practical alternatives to the project.

It was also suggested that if any of the gas transported by the proposed project is ultimately exported from the country, this would argue against the project . . . We note, however, that there is no indication in the record that any of the customers that have subscribed to capacity on the project contemplate using that capacity to export natural gas.

We note that . . . The 2010 PlaNYC progress report identifies the proposed NJ-NY Project as a key component of the effort to “supply cleaner burning natural gas” for the city. Natural gas is expected to serve as a partial substitute for heavy heating oil, which New York City is phasing out by prohibiting the installation of new boilers that use heavy heating oil . . . ConEd further states that timely authorization of proposed project is essential if it is to accommodate all the requests it is receiving for new firm gas service during the 2013/2014 winter season.

We find that activities related to gas production from shale formations are not causally related to the NJ-NY Project . . . The development of the Marcellus and other shale reserves is expected to proceed over decades, and will do so with or without the proposed project. The scope, scale, and speed of shale gas development cannot be accurately estimated, i.e., it is not “reasonably foreseeable.” Consequently, the past, present, and future effects of shale gas development are outside the scope of our NEPA cumulative impacts assessment. [FERC quotes the tar sands permit decision as precedent.]

Texaco Downstream Properties Inc. and Chevron Land and Development Company (collectively, Chevron) jointly request that the Commission convene a technical conference on potential environmental impacts of a portion of the proposed route that crosses the petitioners’ 44-acre property in Bayonne, New Jersey . . . we believe the final Environmental Impact Statement (EIS) adequately takes into account the potential for construction-related contamination and measures to ensure the integrity of a slurry wall proximate to the approved route.

Comments call attention to potential health risks of releasing radon when natural gas is burned indoors. . . we concur with the conclusion that the indoor exposure to radon from gas used in a residence should be limited. Radon initially entrained in extracted gas can be expected to be purged in part in the course of gas processing and to decay during transport from wellhead to burner tip . . . The Commission has no regulatory authority to set, monitor, or respond to indoor radon levels – local, state, and federal entities establish and enforce radon exposure standards for indoor air.

Numerous comments question the safety of the proposed NJ-NY Project. As described in final EIS section . . . the project’s facilities would be designed, constructed, operated, and maintained to meet the DOT Minimum Federal Safety Standards set forth in 49 C.F.R. Part 192 and in other applicable federal and state regulations.

The final EIS finds that the project would result in limited adverse environmental impacts if the project is constructed and operated in accordance with applicable laws and regulations. However, these impacts would mostly occur during construction and be reduced to less-than-significant levels with the implementation of the applicants’ proposed mitigation and our staff’s recommendations. Major issues raised during scoping and comments in response to the draft EIS are addressed in the final EIS.

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