Gas Pipeline Falters

The pipeline under Lake Champlain has been cancelled but VT Gas still plans to build one to Rutland. Photo from Vermont Digger.

Vermont Gas has halted work on a controversial proposal to supply natural gas to International Paper (IP) in Ticonderoga via a pipeline under Lake Champlain. IP had been poised to fund a significant portion of the pipeline expansion, but backed out following substantial construction cost overruns. During project review LCC expressed concern about the significant risk the pipeline posed to Lake Champlain and advocated for specific steps to mitigate them.

The project was part of a longer term plan to construct a natural gas pipeline from its current terminus in Colchester to Rutland. That full proposal was divided into three phases: phase one would deliver gas to Middlebury, phase two would connect to IP, and phase three would continue to Rutland. In addition to funding the majority of the phase two project, IP had agreed to pay $25 to $31 million towards completion of phase one; money which is no longer available to Vermont Gas. Phase three will also be delayed, though Vermont Gas has indicated they still plan to continue the pipeline to Rutland.

The gas pipeline project has been plagued by cost overruns. The original 2013 estimate for phase one was $86 million. Vermont Gas has twice revised that estimate leading to a 78 percent increase, to $154 million. The estimated phase two cost jumped from $64 million to $105 million, leading IP to reevaluate their investment.

Cost overruns have led the Vermont Public Resource Board to reconsider their initial approval of phase one. Earlier this month the Vermont Supreme Court granted the PSB permission to reopen the permits they had already issued for the project, and change or revoke them if necessary.