One of two companies competing to build a giant interstate natural gas pipeline appears to be out of the race - for now.
Wyoming-California Pipeline Co., or WyCal, has told the U.S. Bureau of Land Management and the Forest Service to stop processing the company's applications for right-of-way grants through government land, said Gordon Reid, Forest Service energy coordinator."Because of market conditions, their project was not economically feasible," Reid said, noting there are at least seven projects around the West aiming to bring natural gas to Southern California.
However, WyCal will retain its Federal Energy Regulatory Commission pipeline certificate, which is good for five years. "If market conditions change, they could come back in the next five years and propose another project."
WyCal had been competing with Kern River Gas Transmission Co. to build a 900-mile, 36-inch pipeline that would transport natural gas from southwestern Wyoming to various markets in Southern California. The proposed routing has run into mountains of public opposition because the pipeline would cut through Forest Service land above Bountiful and then run through populous western Salt Lake County.
The pipeline plan generated even more controversy when the Forest Service announced that it would allow two pipelines through the mountains east of Bountiful, a scenario the public no longer has to worry about, Reid said.
Referring to a letter the Forest Service obtained from the Coastal Corp., WyCal's parent company, Reid quoted Coastal President James Paul: "We always said only one pipeline would be built. Unfortunately it's not going to be us."
Though public officials have known since late November of WyCal's dropping out of the Wyoming-California pipeline race, WyCal spokesman Jim Bailey told the Deseret News last week that such reports were unfounded and that the company is proceeding as usual.
But WyCal closed its offices in Salt Lake City last week after WyCal representative Dan Gredvig called the BLM office to ask the BLM to cease processing the company's applications for right-of-way grants.
Last year, the Federal Energy Regulatory Commission certified both WyCal and Kern River, a subsidiary of Northwest Pipeline Co., to build the pipeline, allowing market forces to determine which company would, in fact, build the pipeline. Market analysts have always favored Kern River.
Reid said he believed Kern River has enough contracts to make the project feasible.