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Work Stops on $3.3B Natural Gas Pipeline

The decision could put pressure on regulators to approve other infrastructure projects to help ease electricity prices.

Average Natural Gas Price Comparison
U.S. Bureau of Labor Statistics

BOSTON (AP) — Plans to build a $3.3 billion natural gas pipeline from New York into New England through western Massachusetts and southern New Hampshire have been suspended.

Houston-based Kinder Morgan Inc. announced Wednesday it has decided to stop work on the project. It cited a lack of contracts with gas distribution companies.

The company also said New England states haven't established needed regulatory procedures to allow it to move forward and the process in each state for creating those procedures remains open-ended.

"There are currently neither sufficient volumes, nor a reasonable expectation of securing them, to proceed with the project as it is currently configured," the company said in a press release.

The company said, given the market conditions, continuing to develop the pipeline is an unacceptable use of its shareholder funds.

"Innovations in production have resulted in a low-price environment that, while good for consumers, has made it difficult for producers to make new long term commitments," the company added.

U.S. Sen. Kelly Ayotte said she was pleased by the announcement, pointing to what the New Hampshire Republican called "the many unanswered questions and concerns raised by New Hampshire residents who would have been affected by this project."

Those sentiments were shared by fellow U.S. Sen. Edward Markey.

The Massachusetts Democrat said he opposed the pipeline because if could have accelerated climate change and led to the export of American natural gas to foreign countries.

Peter Lorenz, a spokesman for Republican Massachusetts Gov. Charlie Baker said the announcement "highlights the pressing need to secure cost-effective hydropower and other renewable energy resources to meet the growing demand for affordable energy in Massachusetts and New England."

An aide to Democratic New Hampshire Gov. Maggie Hassan said shelving the project reinforces the need for the state to build a stronger, more affordable energy future.

The project has been met with skepticism and opposition, both from residents along the proposed path of the pipeline and from environmental groups who welcomed Wednesday's decision to halt work.

George Bachrach, president of the Environmental League of Massachusetts, said Kinder Morgan was stopping the pipeline because it was too expensive and wasn't needed.

"Massachusetts has the capacity to develop its own energy in solar, wind and hydro," Bachrach said.

Democratic Massachusetts Senate President Stan Rosenberg called the decision a game changer and said it will allow "a broader discussion about how to meet Massachusetts' energy needs."

The decision also raises more questions for Massachusetts' energy future, coming on the heels of the announcement to shutter the Pilgrim nuclear power plant in May 2019.

Jim Roche, president of the Business and Industry Association of New Hampshire, said Kinder Morgan's decision could put pressure on regulators to approve other infrastructure projects to help ease electricity prices in New Hampshire and New England.

Those energy prices are among the highest in the U.S.

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