Temporary signs for temporary roads

Pipeline begins construction in earnest

By FRITZ MAYER

WESTERN SULLIVAN COUNTY, NY — Red and white road access signs have cropped up in many places, marking spots where workers will create, or in some cases have already created, temporary roads to lay a new pipeline.

The Millennium Pipeline, which is 30 inches in diameter, will replace the 12-inch Columbia Gas Pipeline, which was installed in the 1940s. The new pipeline will, for the most part, follow the route of the old one through Delaware, Sullivan, Orange and four other New York counties.

Mike Armiak, a spokesman for Millennium, said the company expects the new pipeline to be operational by November, and the roads will be gone after that. Information on the company’s website, www.millenniumpipeline.com, says that some final restoration work, such as “final grading, site stabilization, reseeding and landscaping,” may not be completed until sometime in 2009.

The pipeline project stirred controversy in 2006 when the company asked the various county Industrial Development Agencies (IDA) for tax breaks. The company said it could not afford to construct the new line without the tax breaks, which would mean no additional new revenue for the towns involved. Millennium argued that even with the tax breaks, the company would be submitting substantially more revenue to the towns once the new pipeline was in place.

After a debate in Sullivan County between local officials, in which several town supervisors contended the company did not need the tax breaks, the IDA voted in December 2006 to grant the company tax relief. All of the other affected counties also granted tax breaks, with the exception of Tioga County. The affected towns in Tioga will receive full tax payments from the company.

The gas drilling connection

It’s well known by most area residents that gas-drilling company representatives are currently combing the area, trying to obtain leases to drill for gas, which is locked in shale thousands of feet below the earth’s surface. At least one drilling operation is underway in Wayne County, PA, where more than 700 leases have already been signed. To be able to sell the gas, companies will have to transport it to a major gas pipeline. In Sullivan and Delaware counties, there is the Columbia, now Millennium, Pipeline. In Wayne County, there is the Tennessee Pipeline.

Asked if gas from any wells in Sullivan County would be transported through the Millennium Pipeline, Armiak said, “That’s what they’re saying in the newspapers,” but he added, “We don’t have any contracts yet.”

He also said that if gas companies had gas to transport and the pipeline had the capacity to handle it, the pipeline company could not legally turn away the business because Millennium and other pipeline companies are prohibited from discriminating against suppliers.

Armiak also said that suppliers could hook up to the pipeline during the construction phase or after construction has been completed.

Given that Millennium Pipeline is owned by a consortium of three separate energy companies, observers speculate that it is likely that top Millennium executives, when they were negotiating with counties and towns for tax breaks, were aware of the potential of the Marcellus Shale formation that lies beneath the region and that has sparked the gas rush that has descended upon it.