Natural-gas use spurs expansion plan

The Flathead Valley's natural-gas consumption has more than doubled over the last decade, and expectations for continued growth have put NorthWestern Energy on track for a major pipeline expansion.

The existing 10-inch line built in 1962 is the Flathead Valley's only source of natural gas and is within two years of maximum capacity.

That has NorthWestern scrambling to expand its pipeline system here.

Proposed are 12 miles of 12-inch steel pipe from an existing natural-gas valve station near Marias Pass westward to an existing valve station near the junction of Bear Creek and the Middle Fork of the Flathead River.

Because the new pipeline would be largely on National Forest System land (just one mile is on private property), the federal agency took public comment through July and will issue a draft environmental impact statement next month.

NorthWestern wants to build the new pipeline next summer.

While the new pipeline would parallel the existing line as closely as possible, it may diverge in some areas because of terrain, railroad tracks, environmental concerns, other utilities and engineering requirements. A portion of the new line also may need to be built in an inventoried roadless area, the proposal stated.

"To date we've not had any serious opposition" to past projects, NorthWestern communications director Claudia Rapkoch said. "We have a good history of working with other agencies."

THE EXISTING pipeline has been expanded with the addition of loops over the past several years, Rapkoch said.

"We've had to add infrastructure to maintain the pressure to keep the gas flowing," she said. "It's really about maintaining the pressure, so that on cold days, when [large quantities of natural gas] are pulled out, there's enough gas coming through."

The energy company has 2,000 miles of transmission pipeline in Montana, and has seen unprecedented growth in many parts of Western Montana, including the Flathead, Rapkoch said.

In 1986, annual natural-gas consumption in the Flathead Valley was 2.2 mmcf (million-million cubic feet). By 1996, annual consumption had reached 3.4 mmcf, and in 2006 it was 7.05 mmcf.

"In the last 10 years we've had really significant growth," she said. "While we expect growth to continue, we don't know if it will continue at that level, if it will be less or even slightly higher than it has been.

"Natural gas is highly sought-after for both residential and industrial users," she said. "We need the expansion to meet the demand not just in two years, but in 10 and 20 years."

State economists recently scaled back their growth forecasts for Flathead County, but said the Flathead still should grow at a rate of 3.5 percent this year, down from an initial forecast of 6.4 percent. Next year, Flathead County is predicted to grow at a rate of 4 percent, according to the University of Montana Bureau of Business and Economic Research.

NORTHWESTERN crews currently are completing pipeline integrity work on three sections of pipe in the Hungry Horse area. Rapkoch said new federal regulations require energy companies to better scrutinize pipeline integrity in "high consequence areas," where the pipeline is close to homes.

More than a dozen areas in Montana need to be remedied, including three sections of pipeline in the Canyon - through the town of Hungry Horse, near Canyon RV Campground and Cabins and near Montana Fur Trading Co.

Sections of pipeline about 1,000 to 1,500 feet long will be replaced, Rapkoch said.

Work has just begun in the Canyon RV area. NorthWestern delayed work to minimize the impact during the summer tourism season, Rapkoch said.

"It is inconvenient, there's no question about it," she said. "But we try to minimize the effects."

NorthWestern couldn't delay the entire Hungry Horse area integrity work too far into autumn because of weather concerns, she added.

EVEN THOUGH the cost of natural gas has increased alongside other petroleum-based projects, Rapkoch said natural gas continues to provide good value for heating fuel because it's efficient and clean-burning.

A price of $6 per dekatherm is considered normal, she said. The year began with a price of $6.87 per dekatherm in January - the coldest month when natural-gas prices are at their peak - but by June had spiked to $11.

"That was an anomaly," she said.

The price is back down to $8 per dekatherm, and while energy officials expect it to decline even more, it may not get back to the $6 level, she said.

Normal use is about 120 dekatherms annually for a residential home.

NorthWestern posted net income of $9.5 million in the second quarter this year, up 295.8 percent from $2.4 million in the second quarter in 2007.

Consolidated net income for the six months ended June 30, 2008, was $33 million, an increase of $11.4 million, or 52.8 percent, over $21.6 million in 2007.

"We had a great quarter where we benefited from customer growth, rate relief and colder weather than last year," NorthWestern President and Chief Executive Officer Mike Hanson said in a press release. "We continue our focus on core operations and are well poised to move forward on our generation and transmission growth projects."

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com