Inergy Midstream, UGI Energy Services, and Capitol Energy Ventures announced yesterday plans to construct a new pipeline to carry natural gas from Lycoming County, Pennsylvania, to Rockville, Maryland. The estimated $1 billion “Commonwealth Pipeline” will stretch across 200 miles, bringing natural gas produced in Marcellus and Utica Shale plays to the Mid-Atlantic region.
Representatives from the project will be working in the coming days to finalize route specifications and to negotiate various agreements in hopes of economically supporting the construction of the project. The proposed 30 to 36 inch diameter pipeline would deliver natural gas to places including metropolitan areas of Philadelphia, Washington D.C., and Baltimore, as well as other growing natural gas markets in the area.
Fears are growing as the Commonwealth Pipeline would have the option (if approved) of cutting through privately owned property, with or without the permission of the landowner—something companies building “gathering lines” cannot do. Bill Moler, the chief operation officer of Inergy Midstream, says that cutting through people’s land is a last resort. “Eminent domain is not a tool you want to use unless you have to,” said Moler. “We’re going to be here for an awful long time. We want happy landowners, happy neighbors,” he added.
Commonwealth Pipeline is different from other “gathering lines” being placed near gas wells by various companies, as it would be regulated as a utility by the federal government because it would cross state lines. According to Moler, Inergy Midstream would make no money from selling the gas. Payment would be specifically provided for transporting it. Also, if it is necessary to cut through privately owned land, the landowners who might be “holding out” for the highest price might be surprised to find out that everybody will receive the same amount of money along the project. Each landowner would be paid the highest rate negotiated along the route, a rate based on fair-market value. Payment to landowners for other various costs and damages (damage to trees, land, etc.) will vary.
The pipeline, still in early stages of development, is not scheduled to open until late 2015 or early 2016. The companies are still trying to find buyers interested in utilizing the pipeline as less than half its capacity is currently accounted for. Moler explained how important it is to get buyers to sign on with the Commonwealth Pipeline and to get things moving. “This country has the opportunity … to become energy-independent within 12 years,” said Moler. “We need to take advantage of that responsibly, safely, looking out for the environment and treating landowners fairly.”