GAYLORDSVILLE, CONN. -- There are two good vantage points for contemplating the high-stakes, big-money battle over the proposed Iroquois natural gas pipeline.
One is at the Federal Energy Regulatory Commission in Washington, where the file of legal and technical documents about the 370-mile, $582.6 million project to carry Canadian natural gas to southern New York and New England contains hundreds of thousands of pages. The documents reflect an amazing variety of issues: the future energy needs of the Northeast, U.S.-Canada trade relations, the integrity of the regulatory process.
Another vantage is here on the tranquil farm and day lily nursery of Mel Bristol, adjacent to the Wimisink Wildlife Sanctuary and a stone's throw from the rushing Housatonic River. It's a peaceful place, where on a spring afternoon the loudest sounds come from the sheep, the dogs and an energetic woodpecker.
The pipeline would slash along the ridge just beyond the treeline at the end of Bristol's property, dynamited out of the rock and gouged through the beaver pond and the woods where the deer live. After construction, the underground line would be invisible and silent, but Bristol -- like hundreds of landowners and environmentalists in the Housatonic Valley -- isn't satisfied.
"There's a permanent character to disruption of wetlands," he said. "You change all the soil characteristics. You have short-term disruption from sedimentation and erosion. There would be a scar on the woodland, a straight meaningless pathway above the pipe. It'll be an accessway into the wildlife refuge for all-terrain vehicles. And what will the blasting do to our wells?"
Bristol and his anti-pipeline neighbors are the kind of people Energy Secretary James D. Watkins has been scolding publicly for months. In Watkins's view, the people of the Northeast selfishly demand ample supplies of energy but refuse to pay the necessary environmental price for obtaining it. By rejecting all proposals to construct oil refineries, power plants, gas pipelines and high voltage transmission lines, Watkins has said, they put the entire burden of energy production on other regions of the United States and Canada.
In fact, it was New York's decision to abandon the new nuclear power plant at Shoreham, on Long Island, that increased the need for additional natural gas supplies. The gas that would come through Iroquois is, in effect, the gas that Gov. Mario M. Cuomo (D) promised energy-short Long Islanders when they gave up on Shoreham. Cuomo's administration supports the Iroquois project, in which the New York Power Authority is a partner.
But the landowners and environmentalists of Dutchess County, N.Y., and the Housatonic Valley are not alone in opposing the Iroquois pipeline. They have been thrust into an unlikely alliance with gas producers from the western and southern United States, who have complained that the proposed rate structure for the Canadian gas gives Canada an unfair advantage -- an advantage that the U.S. producers fear will shut them out permanently from expanding natural gas markets in New England.
Iroquois is designed to carry 237 billion cubic feet of gas a year, more than double the amount currently imported into the Northeast. The U.S. Department of Energy has approved the imports, partly on the basis of need and partly on the ground that the U.S.-Canada Free Trade Agreement precludes regulators from limiting Canadian access to U.S. markets.
Even so, according to Robert J. Reid, president of Iroquois Pipeline Operating Co., 95 percent of the gas consumed in the region will still come from domestic suppliers. Iroquois' sponsors want to supplement domestic supplies, he said, not replace them.
Domestic producers argue that Iroquois' allegedly unfair rate structure -- based on Canada's different formula for allocating capital costs and rates of return -- will give Canadian producers a lock on future growth in the market.
Leading the fight against it is C. Paul Hilliard, president of Badger Oil Co. of Louisiana and chairman of the Independent Petroleum Association of America. Hilliard, usually described as colorful, did not disappoint senators looking for strong language at a recent hearing about the Iroquois project.
"The Iroquois in their early history were cannibalistic," Hilliard said. "After treatment by the Jesuits in the early 18th century, they discontinued cannibalism and became merely scalpers on the side of the British, both prior to and during the Revolutionary War. Hopefully, gentlemen, this hearing will determine if Iroquois has reverted to cannibalism or is merely continuing their propensities to scalp Americans."
Energy-state senators were sympathetic to Hilliard's argument that it makes no sense to transport gas all the way from Alberta to New England when U.S. supplies are half as far away. But the fate of Iroquois isn't up to the Senate, it's up to the FERC, which is expected to allow the project to proceed in time for Iroquois to begin right of way acquisition in July, a key to the project's tight timetable.
The pipeline would run from Waddington, N.Y., on the St. Lawrence River, southward and eastward across New York, through southwestern Connecticut and back into New York on Long Island. It would cross under five rivers, including the Hudson, and under 26.3 miles of Long Island Sound.
According to Reid, pipelines in this country usually cost about $1 million a mile to construct. Iroquois will cost nearly 60 percent more because of the water crossings and the high prices Iroquois will have to pay for rights of way in southern New York and Connecticut, he said.
Iroquois is a consortium of 13 partners. The largest interest is held by TransCanada Pipelines Ltd., with 29 percent. The other owners are U.S.- and Canadian pipeline and gas distribution companies, including Brooklyn Union Gas, which supplies Long Island.
Iroquois' case rests on a confluence of factors. New England needs new gas transmission lines to help the region end its heavy reliance on imported oil; New York needs the gas to generate electricity on Long Island; and the Canadians are willing to sign long-term contracts to supply it. The arguments against Iroquois are environmental, procedural, economic and political.
Lynn Werner, environmental programs director of the Housatonic Valley Association, said the environmental issues can be summarized in these questions: Has the need for this gas been demonstrated conclusively? If so, is it necessary to build a whole new pipeline across virgin territory instead of expanding existing lines? And is the proposed route for that new pipeline the one that would cause the least environmental disruption?
She and many others, including officials of the Environmental Protection Agency and the Connecticut state government, say the answer to all these questions is no.
"This is a country that put living men on the moon and brought them home. Why can't we do something different with this pipe?" Bristol said. "Put it under a power line right of way, or in the median strip of the Taconic state parkway." Others have suggested a route that would use existing railroad and telephone rights of way.
According to Reid, the route as currently proposed has already been adjusted several times to meet local objections -- including a shift around rather than through the New York estate of pop psychologist Joyce Brothers -- and represents the best combination of directness and environmental acceptability.
"This is the first pipeline I know of planned from an environmental point of view from the beginning," he said. The route advocated by environmentalists along a Conrail line, he said, won't work for two reasons: Conrail refuses to cooperate and in any case much of the line is built on rock fill, unsuitable for an underground pipeline.
Opponents of the pipeline have demanded that FERC hold a full evidentiary hearing -- a trial, in effect -- on the issues of need, routing and rate structure. FERC is not required to hold such a hearing. Most of its decisions are based on a written record only.
If FERC does decide to conduct a hearing, the project could be killed because Iroquois is on a very tight deadline. If gas is not flowing by Oct. 31, 1991, Reid said, the Canadian gas export licenses will expire and the Alberta producers could renegotiate the price before accepting an extension. To meet the deadline, Reid said, Iroquois must begin acquiring rights of way by July 1.
A last-minute question about the validity of FERC's analysis arose last week when pipeline opponents learned that senior FERC staff members and at least one commissioner had met secretly with executives of the Iroquois consortium. They charged that this meeting violated FERC rules.
Dave Cook, FERC's deputy general counsel, said that "the commission takes seriously the allegation of irregularity in its processes and is looking into the matter."
FERC approval would not be the last step in the regulatory process -- Iroquois still needs water-crossing permits from the U.S. Army Corps of Engineers and approval from the Canadian National Energy Board -- but both sides of the dispute say FERC's ruling will be decisive.