Energy giant drops proposed Constitution Pipeline

Pipeline protesters stand outside the Delaware County office building in Delhi on Oct. 10, 2012, during a Delaware County Board of Supervisors meeting.dAILY sTAR File

ALBANY — Williams Companies, the Oklahoma energy giant, confirmed Friday that it has shelved the Constitution Pipeline, a proposed interstate natural gas pipeline that triggered a prolonged battle between environmental activists and pro-development advocates.

“Williams — with support from its partners, Duke, Cabot and AltaGas — has halted investment in the proposed Constitution project,” the company said in response to questions from CNHI.

“While Constitution did receive positive outcomes in recent court proceedings and permit applications, the underlying risk adjusted return for this greenfield pipeline project has diminished in such a way that further development is no longer supported,” Williams added.

Anne Marie Garti, an environmental lawyer who helped form the opposition group Stop the Pipeline, said the group “fought this epic 8-year battle with courage, conviction and intelligence, adding: “Perseverance pays off.”

Williams disclosed this week in a financial report that the investors in the Constitution Pipeline took a $345 million “impairment,” suggesting that the investment in the mammoth 124-mile pipeline was being written off.

“Impairment” is an accounting term meaning a reduction in the recoverable amount of a fixed asset.

Despite being approved by the Federal Energy Regulatory Commission, the project skidded into trouble when New York regulators refused to issue water-crossing permits, citing environmental concerns.

Constitution’s footprint would have crossed hundreds of real estate parcels in Chenango, Delaware and Schoharie counties. Garti said Stop the Pipeline’s next mission is to ensure easements acquired by Constitution are removed from landowners’ deeds.

Williams, in the statement released by the company’s spokeswoman, Erica Jones, said: “Natural gas remains a critical part of our country’s clean energy future, and Williams is well-positioned to take advantage of the growing demand for natural gas as a reliable, low cost and clean alternative for power generation fuel, heating oil and diesel.”

Williams, while stopping short of taking direct issue with New York regulators, also said: “Our existing pipeline network and expansions offer much better risk adjusted return than greenfield opportunities, which can be impacted by an ambiguous and vulnerable regulatory framework. We are prepared to deliver the clean energy benefits of natural gas now through infrastructure projects like Regional Energy Access, Leidy South and the Northeast Supply Enhancement.”

The pipeline was designed to move 650,000 dekatherms of natural gas per day. Just last September, Williams voiced optimism about the project, saying then Constitution “continues to represent much-needed energy infrastructure designed to bring natural gas to a region of the country confronting natural gas supply constraints.”

Earthjustice, a nonprofit environmental group that opposed Constitution, argued the project would have increased demand for fracked gas while causing pollution and posing threats to wildlife and human health.

Moneen Nasmith, an Earthjustice lawyer, said Catskill Mountainkeeper, Riverkeeper and the Sierra Club were among the clients that objected to the pipeline.

“At this critical moment for our climate, we cannot afford unnecessary fossil fuel projects that will lead to more fracking and exacerbate our climate crisis,” Nasmith said.

Several pro-fracking landowner groups and trade unions came out in support of the project at a series of public forums, billing it as beneficial to the upstate economy. Tom Shepstone, who runs the pro-fracking blog Natural Gas Now from Pennsylvania, said the Constitution project suffered from a series of regulator delays he attributed to opposition from the Cuomo administration.

“This reflects the total disregard the Cuomo administration has for upstate New York,” Shepstone said. “This dream of powering everything with renewables is ludicrous.”

Cuomo is seeking to get legislative approval to speed up the process of siting of renewable energy projects to help the state reach the goal of having 70 percent of its electricity from green sources by 2030.

The Cuomo legislation would establish the Office of Renewable Energy Permitting to ensure decisions relating to wind and solar projects are “predictable” and “responsible,” the governor said in an announcement.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com

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