Pipelines carrying Rocky Mountain natural gas to markets across the United States are virtually full, and prices in the region are dropping as a result of supply overwhelming both local demand and export capacity.
But three companies are offering competing proposals to build a big, new, straight-shot pipeline from Wyoming to Chicago, and that city’s millions of people who use natural gas to heat their homes during the teeth-chattering winters along Lake Michigan.
On an average day, Chicago and surrounding areas use nearly 4 billion cubic feet of natural gas. On a cold day, demand can hit more than 10 billion cubic feet, according to Kinder Morgan Energy Partners LP, based in Houston, the backer of one Rockies-Chicago pipeline proposal.
“There’s a couple of smaller projects [offering new capacity by adding more compression or an extra line], but there’s not another big pipe on the near-term horizon,” said Joe Magner, a Denver oil and gas analyst with Tristone Capital Inc., a Calgary, Alberta, Canada-based energy investment banking firm. “We need another big pipe.”
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