Gas pipeline debate begins, and it hasn't even started yet

By Ed Barna

When proponents of a Southern Vermont Natural Gas Pipeline announced their conceptual plans last fall, they hoped they could avoid the kind of public hue and cry that doomed the Champlain Pipeline a few years ago.

This one is different, they said. Instead of being a pass-through to Boston area markets, it would fuel Vermont power plants, which not only would be of value to the state in themselves, but would also anchor gas service to businesses and homes. Previously disturbed rights-of-way along Route 7 and a power line corridor owned by the OMYA marble company would avoid most of the problems with permitting.

There would be cheaper power, cheaper heating fuel, and businesses looking to relocate or expand in Vermont would get the kind of gas hookups they had come to rely on elsewhere. Gas is safe, certainly safer than running propane trucks over the highways, proponents said -- the kind of fuel that people elsewhere in the country took completely for granted. And because natural gas is less polluting compared with oil and coal, they said, using more natural gas would be an environmental plus.

Business groups, especially industry-oriented groups, were quick to voice their approval, such as the Rutland Economic Development Corporation and the Bennington County Industrial Corporation. The Bennington Chamber of Commerce executive committee members, polled on their views, gave unanimous support.

Richard Sedano, who heads the Public Service Board (which represents citizens in utility matters) made favorable statements, and the Agency of Natural Resources said it would put enough personnel on the case to expedite review so as to make the company's business plan feasible, if SVNG would pay the cost.

Governor Howard Dean, on a trip to Bennington, compared the chance to have a natural gas pipeline with the chance to have an Interstate highway -- the absence of which has been sore point for southwestern Vermont business leaders for decades. He said that if that area of the state truly wanted economic development, the time had come, with the pipeline, to put up or shut up.

Sedano also made remarks in Bennington that, he said in a recent interview, had been misinterpreted to mean he supports this specific project. His point, he said, was that natural gas generally has positive economic benefits for communities that have it, and they should consider it as a tremendous opportunity. The federal Natural Gas Act since the 1930s has promoted extension of gas lines to unserved areas for this reason, he said.

However, SVNG would get the same detailed review as any other project, Sedano said. That part of his remarks has tended to get lost, he said.

Since those initial announcements and reactions, as more details of the project have emerged, more and more opponents have taken stands against it. There is still no filing for a certificate of public good with the Public Service Board, financing for the Vermont part of the pipeline extension has yet to be announced (an extension and power plant in the Schenectady area got financing through an unnamed Fortune 500 company, according to one of the principals in the gas company), several towns or town boards in southern Vermont have voted against the idea, and property owners in the area linking the two disturbed rights-of-way have been disturbed enough themselves to post their land against incursions by company surveyors.

What seemed to some at first like a no-brainer now appears likely to become a classic Vermont permit-process war of attrition. By the time it is all done, one recent editorial letter-writer promised, the pipeline controversy will make the struggle over the (now defunct) Vicon waste incinerator look like afternoon tea on the lawn.

GO FIGURE

Before outlining the issues that pipeline promoters now face, and giving some initial responses, it's necessary to review the scope of the subject and some of its history to date.

The extension of the gas grid to Vermont would start with Iroquois Gas Transmission System, headquartered in Sheldon, CT, a $26 billion company owned by 10 American and Canadian energy companies, the largest share being Trans Canada Pipeline's 35 percent. They would build a branch from the present Iroquois Pipeline southwest of Albany, coming north of Schenectady and then to Bennington, and fueling a 540 megawatt plant in Glenville, NY, along the way.

From Bennington to Rutland, and ultimately perhaps to Killington, Brandon and Middlebury as well, the pipeline would be built and operated by Southern Vermont Natural Gas (SVNG). Like other companies in central Maine, New Hampshire and southern Connecticut, this would be a subsidiary of New York State Gas & Electric (NYSEG), which in turn is a subsidiary of Energy East, headquartered in Albany.

Gas transmission systems need economics of scale to be competitive, and major users, often power plants, ensure an initial flow. In this case, three power plants would be involved, all to be constructed and operated by Vermont Energy Park Holdings, LLC (VEPH).

All three would use the same kind of turbine: the General Electric 7FA, 270-megawatt power plant, which not only burns natural gas but also utilizes steam from a power plant's cooling operations to produce electricity. The capacity numbers for the plant reflect the number of such generators: 270 megawatts (one unit) for Bennington, 540 megawatts (two times 270) for Glenville, and 1,080 (four units) for Rutland.

The point of having a generating plant larger than Vermont Yankee in Rutland is that a 345 kilovolt VELCO regional transmission line runs near the anticipated site. That would allow energy sales to southern New England. Even Vermonters for a Clean Environment (VCE), the coalition opposing the project, agrees there is room on the VELCO line between Rutland and Vermont Yankee for the project's electricity.

The two main partners in privately held VEPH are Tom Macaulay, a former Vermont state senator who lives in Rutland; and Robert Votaw, said by Macaulay to be working on a landfill gas project in Brattleboro from his base in Connecticut.

Macaulay has a background in real estate and has been working with Estech-North, Inc., an electronic surveillance development company. His long career of public service includes two years on Rutland City's Board of Aldermen (1986-88) and previous employment with the city as Director of Public Works. He said his familiarity with Vermont's permit processes would be part of his role with the company.

Votaw's recent employment has been with Farmington Power in Connecticut. Before that he did development work for several companies under the Enserch Corporation umbrella, including Enserch Development in Florida, Lone Star Gas in Texas, and Ebasco.

The other person frequently mentioned in news reports about the pipeline is Michael Eastman, a manager of gas operations for NYSEG. Assigned as project manager for SVNG, he has been working out of a Rutland office in the past year.

The pipeline would extend 63 miles from Bennington to Rutland. Tentatively, it would follow Route 313 to Route 7, go through Arlington, Manchester and Dorset to the Danby-Mt. Tabor area, cross Colvin Hill in Danby, pass through part of Tinmouth to the OMYA power line, then proceed to Clarendon, Ira, and Rutland.

The number of property owners who could be affected by the pipeline would depend on the exact route, but could run as high as 200 directly affected and another 300 affected to some degree.

The potential power plant site is west of the Holiday Inn and north of the Route 4 bypass, at the southern edge of Rutland Town development before the bypass corridor. It would thus be in proximity to Otter Creek (and wetlands, opponents say), to Route 7 (perhaps via Randbury Road), and to the Vermont Railway tracks.

The main pipeline would be two feet in diameter, made of half-inch steel, welded to 1,400 pounds per-square-inch test pressure, but operated at a limit of 900 psi, according to Macaulay. It would be buried five feet deep (three feet of cover), would be coated, and would have electronic rust protection similar to what is used on recent-model cars.

The manufacturer's guidelines suggest a conservative lifespan of 200 years, he said. Branch lines would be up to six inches in diameter, operating at 660 psi.

Opponents have done more to advertise the dimensions of the Rutland power plant than supporters, the scale of the facility being the basis for several issues. They have estimated its footprint at 20 to 30 acres, its four stacks at 200 feet or more, and its height at more than two stories, such that it would become an eyesore where it was located at the southern entrance to the city. To reach those conclusions they have obtained pictures of a comparable 1,040 megawatt plant in Oswego, NY.

Macaulay put the stack height at 165 feet, comparable to the former Vicon stack, which has yet to be removed. Between its low-lying terrain and the trees that would remain and be added to the site, it would not be highly visible, he said.

Opponents have countered that the plumes of condensed water vapor from the plant would not only be impossible to hide, they could be visible from as far as 50 miles away in clear weather. Proponents downplay such impacts, and the debate goes on.

LEGAL CONTEXTS

Issues like emissions have yet to come before any permitting body where testimony would be taken. No proposal has yet been submitted. SVNG interim manager Bruce Roloson said this spring that they would file an application by June 21, but that plan was derailed, possibly by financing problems as well as a surge in opposition.

Before construction could start, the plan would have to obtain a certificate of public good from the Public Service Board, under Act 248. That process would include public hearings.

But critics want the concept to be seen in the light of the regional energy picture, not just in terms of how it would affect area residents when in operation. They contend that there is simply no reason for Vermont to absorb the environmental and other impacts of large power plants, because so many similar projects are in the works.

Behind the rush to build new plants is a January 1, 2001, starting date for electric industry deregulation in other New England states. The number of power plants in the works varies depending on the date, but around 60 were initially proposed. With that sort of capacity in the works, opponents say, why build a massive plant in Rutland whose main role would be to send power elsewhere?

One VCE pamphlet puts the combined output for 57 proposed New England plants in the next three years at 30,000 megawatts, which stacks up against a peak regional load of 21,000 megawatts. Vermont's peak load is 1,100 megawatts and its average load 650 megawatts, they said.

Whether Vermont could benefit from new gas plants around New England depends on whether the state deregulates. Lawsuits, negotiations and possible financial deals continue to swirl around the contract with Hydro-Quebec, which was once thought a long-term energy bargain but which would make Vermont's rates the highest in the nation next year, according to the US Department of Energy.

Macaulay contends that only about a quarter of those plants will actually get built. Opponents claim that the goal of the Rutland plant is simply to make money by selling power out of state. But David O'Brien, executive director of the Rutland Economic Development Corporation, said there would also be local electricity.

It could very well be a tremendous benefit to offer developers electricity, he said.

Or factories could co-generate their own, a possibility that opens up environmental issues at the same time that it might be cost-effective. In any case, O'Brien said that when site location coordinators come around, checking out Rutland for possibly viable industrial sites, whether or not there is natural gas is a very standard question. Not having gas can bump Rutland off lists without anyone being able to track the economic damage that was done, he said.

A standard environmental argument for natural gas is that it is a cleaner fuel than coal or, arguably, oil. Building gas power plants would be a plus after the older power plants are forced out of business by their dependence on a higher-priced fuel: The problem there, say opponents, is that none of the older, dirtier plants are in Vermont (a VCE pamphlet puts the 14 worst in Maine, New Hampshire, Massachusetts and Connecticut).

Citizens in the affected states are already at work on tighter regulations that would shut those plants down, VCE claims. Currently, there is no such mechanism, so New England's air pollution has been worsening through the addition of new plants and the continued operation of the older ones, opponents say.

TOWN ROADBLOCKS

When SVNG routed its pipeline through the thinly settled hills of Danby, they happened to put the path near the springs used by Annette Smith, a homestead farmer and artisan living off the electric grid with solar power. In retrospect, this was one of the company's worst moves. She proved to be a dedicated researcher and an astute coalition-builder, going well beyond NIMBY issues in her critiques.

At first castigated as a one-woman wrecking crew, this latter-day Ann Story has in the past year gathered formidable allies, among them Richard Ketchum of Dorset, known widely as a founder of Blair & Ketchum's Country and the author of 11 books; Noel Perrin, a writer teaching environmental writing at Dartmouth; Norman Lear, a Hollywood producer who has a part-time home in Shaftsbury; and Terry Ehrich, who heads Hemmings Motor News in Bennington.

They have contacted groups monitoring gas-related developments elsewhere, have consulted with energy experts to build their case, if there is a filing, and have enlisted formidable counsel. Attorney Jon Readnour is a former Assistant General Counsel for the Central Maine Power Company, primarily involved with licensing power plants and transmission lines, and Stephanie Kaplan is the former executive director and general counsel of the Vermont Environmental Board (1986-1994), the lawyer who successfully opposed OMYA truck traffic for a group of Brandon innkeepers in a recent, much-publicized Environmental Board case (which has since been appealed).

Legally, SVNG was not required to make any contact with affected towns or landowners prior to filing its application, Eastman observed. But wishing to convey as much information as possible, and as effectively as possible, they initially tried to set up private meetings with local boards and with landowners, to the exclusion of others, including the press.

This was widely interpreted as a kind of end run, an attempt to skirt the kind of open review characteristic of Vermont's town meeting-style tradition. Also criticized was the attempt to get landowner signatures on easement agreements before all the details had come out. The Bennington Banner wrote that it was pretty obvious that this group of flatlanders just doesn't fathom the Vermont mind.

Eastman, in a recent interview, said that if they could go back, they would probably do things differently. Their attempt to inform people along the route was misperceived, and then blown out of proportion as one press report followed another. Clearly we were not trying to hide anything, he said.

But an unofficial process had been set in motion that has resulted in preemptive votes in several communities. What force these have in the permit process remains to be seen. But the Dorset Select Board has voted its opposition; Danby voters gave it a thumbs-down 185-52 on September 15, and on September 22, Tinmouth voters opposed it 85-0.

Meanwhile, Vermont State Auditor Edward Flanagan has asked the Agency of Natural Resources to explain the purported agreement to speed up review of the pipeline plan when it comes. ANR had said the company would have to pay for the cost of hiring any extra personnel to accomplish such a review. Scott Johnstone, ANR's Deputy Secretary, remarked in August that, I don't think 'expedited' is the right word. We'll do the same level and quality job quicker because we have additional resources.

WHERE QUESTION MARKS BECOME EXCLAMATION POINTS

Because the issues have yet to be presented in full, in a forum that facilitates thorough rebuttals, they are given here as questions.

* Would there really be a public good for Vermonters, if the gas went to power projects aimed at making money through out-of-state sales?

Eastman said the answer to that can be found by looking at NYSEG's record in the Empire State. Though having major users is important, especially when extending a pipeline as far as Vermont and into a thinly populated area, experience has shown that distribution arrangements soon serve a large percentage of nearby communities.

You need to anchor it somehow in order to support the large capital costs involved, he said, but we always try to bring service to as many communities as possible. We're known for it through the state (of New York). We've been doing it since 1987 (when federal regulator forced a divestiture of Energy East's generating businesses).

* Could the project be financed?

Eastman said it will cost about $3 million to go through the permit process and before we can commit to spending $3 million, which to SVNG is a lot of money, we need to know that the power plants are going ahead. That does not amount to a catch-22, with financing held up by lack of permits, he said.

Macaulay addressed the issue at a recent meeting in Bennington. He told one questioner, We are bound by our confidentiality agreements not to discuss it, but in fact we are involved in negotiations with two separate partners. He was asked, Are they both New York firms? and replied No, some of them have international connections and some of them are domestic. Is one of them Enron? As I said I can't break my confidentiality agreements to answer that question.

Asked about a rumor that OMYA might be a major player because it is opening a quarry in Danby, and might want to use the pipeline corridor for removing marble, Eastman said that as far as he knows that rumor is groundless.

* Would a pipeline add a major safety hazard to the state?

Eastman said the incidents that have occurred (some of which have appeared at meetings in the form of pictures of catastrophes, provided by opponent VCE) almost always involve older lines that didn't have modern corrosion protection, or distribution lines that were disrupted by excavation. NYSEG has not been perfect, he said, but in this case it's all state-of-the-art. It can be done safely.

* Would the pipeline have a major impact on landowners?

Ketchum, in an editorial letter, summed up many people's concerns: If you have a house on a quarter acre of land in East Dorset or Arlington or Danby and you are ordered to grant a 100-foot right-of-way (note: other meetings have put that figure at 75 feet), believe me, it's a cause for concern. What's left of your yard? What if the pipe leaks? What if there's an explosion? What if they don't clean up the mess after they've dug the trench? What happens if they sell rights in the trench to a telephone or television company? How many companies get to dig up your front yard and monitor their underground lines? And what effect does all this have on the value of your property?

Sedano said that Vermont Gas Systems recently expanded the capacity of their 1965 pipeline through a looping project, adding a parallel pipe and sometimes, due to environmental concerns, having to move away from the 1965 right-of-way. The work had to cross sensitive areas, including the Missisquoi River.

The problems were surmounted and there was no significant objection to the work, which in Sedano's opinion was comparable to what would be required to install a pipeline in southern Vermont.

As for safety, Sedano said there have been some leaks and incidents with Vermont Gas Systems, but due to safety controls and the company's response there had not been any serious effects. Their record, he said, was quite good. But the property value issue still looms large, perceptions being realities for the real estate business. In one case, a Danby family with a spring that was being eyed by a bottled water company has seen that deal put on hold, because excavation of the pipeline trench might disturb the water flow. Owners have also expressed concern that initial easement payments might miss the commercial value of later add-ons like telecommunications conduits, while the add-on businesses would bring new levels of intrusion from inspections, periodic digging, and herbicide application or other controls over vegetation.

* Would natural gas really save money for businesses and homeowners?

The answer would depend on local as well as national and international factors, since building out distribution to smaller numbers of customers would not be as cost-effective. But one indication comes from the Vermont Fuel Price Report put out monthly by the Vermont Department of Public Service.

For a million British thermal units (BTU) of energy, the August report said cordwood was the cheapest, at $7.20, followed by fuel oil at $7.33, then natural gas at $7.75. Kerosene came in next at $8.90, followed by coal at $11.25, propane at $14.63, wood pellets at $15.08, and electricity at $41.03.

* Would the gigantic power plant in Rutland, described as being the size of several Yankee Stadiums, have effects on the area's environment, including the aesthetic environment, that would forever change the character of the community?

Opponents have visualized huge cooling towers and smokestacks, and a level of noise from the turbines that would make a rumble or whine a constant presence. Macaulay called this picture grossly inaccurate. In particular, noise insulation would reduce the sound at the property line to the level of a conversation, he said.

The stack or stacks would be tall so as to put emissions out of the local air circulation system, according to proponents. But opponents have painted pictures of nitrogen oxides creating smog, in a valley known for its atmospheric inversions, and have said that fog and icing from water vapor could be significant problems.

Annette Smith has uncovered industry publications information suggesting that radon could accumulate at some points in the transmission and burning process, since natural gas sometimes comes from underground areas where that radioactive substance is also found.

The head of Tinmouth's Planning Commission, Marshall Squier, visited the 1,040 megawatt plant in Oswego, and reported back that he could hear a steady rumble from the plant from a distance, and its outdoor lighting had a major impact on the night sky. The plant was highly automated, he said at a meeting in Tinmouth in August, which did not seem like a good sign for the creation of jobs.

* Would there be regional or global air pollution implications?

Even if Rutland and Bennington could escape direct air pollution, the emissions would be added to the region's total. Opponents fear that could ultimately affect federal permitting of large-scale industrial plants that would offer far more jobs than a power plant.

Some opponents, Smith included, take a long-term view that global overheating is a serious threat, and that the externalities (as the power industry calls them) of natural gas make it a bad bet. Not only would there be greenhouse gas emissions directly from the plant, but also any natural gas use releases methane at some points in the transmission process, opponents say -- and methane is a very potent greenhouse gas.

Smith also questions whether the long-term supply of natural gas is as dependable as industry advocates claim, or whether supplies will run low enough in a generation for Vermont to find itself saddled with excessive costs just as in the Hydro-Quebec contract.

* Would Vermont's image as a natural and rural state be tarnished, Reducing the quality of life considerations that are also a factor in economic development?

Proponents stress the advantages of cheap natural gas, which is the fuel of choice for about a quarter of the nation. VCE, in one of its public statements, has said that Vermont's reputation as an environmental state with bucolic settings and clean air would be damaged.

FRUSTRATION

The arguments at this stage of the process tend to be like offers at the start of a tense collective bargaining process: stated in the extreme, often in ways dismissive of the other point-of-view. Opponents are frustrated that so many concrete detail have yet to emerge, nearly a year after the companies involved suggested they would soon file for permits.

Meanwhile, business leaders experience a kind of frustration that Sedano said he shares, seeing an apparent unwillingness to look at the broad consensus in favor of natural gas elsewhere in the country and in Vermont around the Vermont Gas Systems pipeline.

That should not be construed as support for Southern Vermont Natural Gas, he said. But he feels the debate so far has stressed negatives, putting aside the strong possibility that having natural gas could be a tremendous opportunity.

The counterview was stated by Smith when she spoke to Manchester's Select Board this spring: This is industrial development of a type never seen before in Vermont. It is sprawl and blight and represents the kind of growth that will forever change what makes Vermont such a special place to live and work.

Ed Barna is a freelance writer from Brandon.