$1.5B pipeline proposal would create jobs in Michigan

Michael Martinez| The Detroit News

A new natural gas pipeline would run through Michigan and create an  unspecified number of jobs in the state, according to a proposal released  Tuesday.

Detroit-based DTE Energy Co., Canada-based Enbridge Inc. and Houston-based  Spectra Energy Corp. plan to spend as much as $1.5 billion to jointly develop a  pipeline that will move natural gas from Ohio’s Utica Shale through Michigan to  markets in the Midwest and eastern Canada.

The proposed Nexus Gas Transmission system would include 250 miles of pipe  that starting in November 2015 would transport 1 billion cubic feet of gas a day  to Michigan and Ontario, according to a joint statement.

Though not finalized, the pipeline route would start outside of Cleveland,  run through northern Ohio, swing north in or around Detroit and cross into  Ontario between Marine City and St. Clair, according to a general map provided  by Spectra.

The pipeline would serve power plants and industrial customers, the companies  said. DTE Energy’s MichCon has 90,000 commercial and industrial clients.

“This is going to be the new frontier in energy,” said Phil Flynn, energy  analyst with PRICE Futures Group in Chicago. “This is going to be the start of a  new boom.”

In 2010, Michigan ranked 10th nationwide with 28,000 direct and spinoff jobs  from hydraulic fracturing to extract natural gas from shale formations,  according to an IHS Global Insight study commissioned by America’s Natural Gas  Alliance. Another 10,000 jobs will be created in Michigan by 2015, mostly in  spinoff employment, the study estimates.

Environmental critics who have blasted the chemical process used to extract  shale gas — nicknamed “fracking” — said the proposed pipeline would be a  detriment to the state.

“We see fracking as a distraction of where Michigan and the rest of the  country need to go, and that’s a clean-energy future,” said Nic Clark, spokesman  for Ann Arbor-based Clean Water Action. “It doesn’t make a whole lot of sense to  be running even more pipelines when we have the opportunity for energy  independence.”

The companies should think twice about investing in the project, he said.

“It’s the status quo versus the future,” Clark said. “Their business model is profits  from the status quo and continued investment in fossil fuels, which have  damaging effects.”

The billion-dollar project is expected to create short-term construction jobs as  well as long-term positions in Ohio, Michigan and Ontario, said Wendy Olson,  spokesperson for Spectra Energy, but it’s too early to project how many. Energy  companies and analysts argue that shale natural gas will make America energy  independent and turn the country into an energy exporter.

Once completed, the pipeline might curb the cost of natural gas, which has  risen since hitting a decades-low price earlier this year.

It will give manufacturers a reason to stay in or return to America by  supplying lower-cost energy, Flynn said.

“Not knowing what the crystal ball has that far down the road, it should be a  benefit from a financial standpoint,” including lower prices, DTE  Energy spokesman Len Singer said.

Chesapeake Energy Corp., Devon Energy Corp. and Exxon Mobil Corp. have begun  tapping into the Utica formation, which stretches from Kentucky to Ontario. The  Ohio portion may produce as much as 5.5 billion barrels of oil and 15.7 trillion  cubic feet of gas, according to Ohio Department of Natural Resources.

Spectra is developing, designing and building the pipeline, a company  spokesman said. The pipeline must be approved by the Federal Energy  Regulatory Commission, Singer said.

Spectra Energy plans to specify the pipeline’s economic benefits after it  completes in the next few months what is known as an “open season” — a period  when it lays out its plans, takes bid commitments from customers and gets public  comments through the federal regulatory process.

Bloomberg News contributed.

 

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