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Pennsylvania at crossroads of natural gas boom

The Associated Press
| Monday, August 15, 2011 4:00 a.m.

HARRISBURG -- Pennsylvania and the Marcellus shale natural gas reservoir are emerging as a key focus of natural gas pipeline operators, as the increasing gas flow spurs projects to get it to customers in the northeastern United States and possibly Canada.

More than half of the interstate natural-gas pipeline projects proposed to federal energy regulators since the beginning of 2010 involve Pennsylvania -- at a cost estimated at more than $2 billion.

That means hundreds of new miles of pipeline as part of a larger, traditional cross-country network that extends through Pennsylvania and its neighboring states, as well as dozens of new or upgraded compression stations to force more gas through the buried pipes.

The projects employ thousands of contract workers and bring work to steel mills, welders, gravel quarries and landscapers. They also generate concerns about air and water pollution, and eminent domain issues.

Combined, more than a dozen projects proposed or under construction would have the capacity to move an additional 4 billion cubic feet of natural gas a day -- one-third of what analysts for Colorado-based Bentek Energy say is the average daily demand in the northeastern United States.

"A lot of those projects are really designed to move the new volumes out of the Marcellus to your more traditional, historic pipelines that have served the Northeast markets for the last 30 or 40 years," said Bentek's manager of energy analysis, Anthony Scott.

Bentek said about 3 billion cubic feet (bcf) per day of gas is flowing from the Marcellus shale, the nation's largest-known natural gas reservoir. Production is rising quickly, and the flow should easily reach 7 bcf or 8 bcf per day in the next five years, Scott said.

Gas flowing into interstate pipelines, largely in Southwestern and Northeastern Pennsylvania, is displacing pricier gas from more distant sources including Canada, the Gulf Coast, Rocky Mountains or terminals that accept liquid natural gas shipments from overseas, Bentek analysts said.

A $700 million expansion of Tennessee Gas Pipeline Co.'s 300 pipeline employs 2,100 surveyors, inspectors and construction workers, according to the company. It received federal approval last year to lay about 127 miles of 30-inch pipeline -- along the existing 300 pipeline where possible -- through northern Pennsylvania and northern New Jersey, as well as the installation of two new compressor stations and upgrades of seven others.

To connect to the larger, interstate pipelines, other companies are moving forward in Pennsylvania on what is expected to be thousands of miles of smaller pipelines to ferry gas from producing well sites. Those gathering pipelines require various federal, state or local permits to cross wetlands, streams and roads, but not federal energy regulators' approval.

In many cases, new pipeline would be buried along existing pipelines in the national network.


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