Binghamton Natural Gas Summit: Millennium Pipeline President Richard Leehr
One of the speakers at the Natural Gas Development Summit held in Binghamton on March 18th was Richard Leehr, president of Millennium Pipeline (MP), a major natural gas pipeline running from Western New York State almost to New York City. What follows are MDN’s notes from his presentation. Unfortunately Millennium has a policy against sharing their PowerPoint slides on the web (we asked and were turned down). It’s unfortunate because there were a number of good slides that would be of interest to landowners. However, MDN located two PDF maps showing the MP and its interconnect points with other pipelines, and a pipeline system map for Upstate New York and the Northern Tier of Pennsylvania (see bottom of this post for the links).
Dick Leehr started his presentation with a “thank you” to landowners for their patience and inconvenience during the recent construction of the pipeline. The MP has its home office in Pearl River, NY, almost on the border with New Jersey and not far from metro New York City. The MP is an underground steel 30-inch diameter pipeline with 1 inch thick walls. The steel is coated and should last at least 100 years.
The MP has the capacity to move 1/2 BCF (billion cubic feet) of natural gas over the entire length of the pipeline per day. On January 4th, the MP hit its current high in delivery with 714,000 dekatherms.
Mr. Leehr said to think of pipelines as Interstate Highways. Shippers contract or “reserve” capacity on the pipeline. The pipeline picks gas up at one point and delivers it to a different point specified by the customer. Pipelines are among the safest forms of energy transportation in the country according to Leehr.
The MP interconnects with a number of other large pipelines, including the Tennessee, Dominion Gas, Empire and Columbia Gas pipelines. MP also interconnects with many smaller “midstream” pipelines as well. Mistream pipelines connect wells to larger pipelines—essentially the bridge between energy producers and energy buyers. The MP handles pressures of 1200 psia (pounds per square inch absolute), whereas smaller midstream pipelines are often under 200 psia.
Among the shippers who reserve capacity on the MP are National Grid (which is their largest shipper), ConEd, Central Hudson Gas and Electric, New York State Electric & Gas (NYSEG) and Columbia Gas Transmission.
Mr. Leehr pointed out that as of today, New York State imports 95 percent of the natural gas it uses. He also noted that New York City has a 10-year window for building owners to convert from using #4 and #6 fuel oil to either #2 fuel oil or natural gas. In other words, the market in New York for drillers, and for the MP, is ripe for a healthy supply of Marcellus Shale gas.
The MP can easily triple its capacity according to Leehr, by using compressors and pipeline looping. Right now, drillers have indicated there is plenty of capacity in the MP to handle all of the shale gas they can produce, so there are currently no plans for further expansion. MP recently made a pitch to expand into Manhattan, but their proposal was not successful. They may try again in the future. The MP is also considering a link with the Iroquois Pipeline, which if done, would give the MP direct access to the very large Long Island market.
After Mr. Leehr’s prepared presentation, there was a Q&A period during which both Leehr and Michael Armiak, also from MP, took questions from the audience. A few of the comments:
Q: Can you offer any assurances that gas produced in our area would stay in our area so local residents can benefit from lower prices?
A: MP does not have a role in where gas is shipped. It is a highway, picking up and dropping off where its customers tell them to. The best way to keep gas local is to have NYSEG (the utility company in the Southern Tier of NY) contract with local midstream pipelines to purchase gas directly from local drilling operators.
Q: During construction of the pipeline, how did you plan for safety (mudslides, earthquakes, worker safety)?
A: Everyone who worked on the pipeline had extensive safety training.
Q: How long would it take to expand your system with compressors and looping if demand for natural gas increases dramatically?
A: It takes about one year for permits and authorizations, and another 8-12 months for construction of the additional components.
Q: Is the MP considered a utility?
A: No. It is a federally regulated Interstate pipeline transportation system.
Q: Recently, Mayor Calvin Tillman from DISH, TX was in the area (see MDN coverage of that event) talking about air pollution from compressor facilities used on pipelines. What assurances can you give us the compressors you use are safe for area residents?
A: The compressor facility in Corning received an air permit from the New York Department of Environmental Conservation (DEC) under the authority of the federal Environmental Protection Agency (EPA) Clean Air Act. We monitor and comply with all facets of the Clean Air Act. We conducted an environmental impact statement for the compressor facility that fills several catalogs. We are in compliance with the letter of the law and the air around the facility is not polluted.
At the close of the question and answer time, one audience member rose and identified himself as a representative from the local union whose members worked on the MP when it was built in the Southern Tier area last year (from Corning to the Delaware County line). The MP employed over 1,000 union workers just in this area when it was built. He told Dick Leehr on behalf of the members, “thank you” for the excellent jobs, and he praised MP as a great company to work for. Mr. Leehr responded in kind and said that he was pleased with the high quality union workers, and that they produced an excellent product.