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Chesapeake Utilities gets approval to expand natural gas in Md.

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Chesapeake Utilities has started construction on extending natural gas from Eden in Wicomico County, Maryland to Somerset County. | IMAGE COURTESY CHESAPEAKE UTILITIES

DOVER — Chesapeake Utilities Corporation has cleared the final hurdle to extend a natural gas pipeline further onto Maryland’s Eastern Shore, the latest piece of a $34 million project to expand infrastructure on the Delmarva peninsula.

The Maryland Board of Public Works, presided over by Maryland Gov. Larry Hogan, approved a permit on Jan. 27 for the Dover-based natural gas company to bore under three waterways. Chesapeake Utilities will extend the pipeline 11 miles into Somerset County from existing infrastructure in southern Delaware and in Wicomico County, Md.

The latest approval marks the last chapter of the Del-Mar Energy Pathway, a pipeline proposed in 2018 to address the growing market demand for natural gas. Eastern Shore Natural Gas, a Chesapeake Utilities subsidiary, owns and operates a 448-mile interstate pipeline that transports natural gas from various points in Pennsylvania to customers in Delaware, Maryland and Pennsylvania.

Specifically, the Del-Mar Energy Pathway extended natural gas roughly 7 miles east of Georgetown, and a fraction of a mile in Millsboro. But this extension to Somerset County, valued at $14 million, will deliver natural gas access to one of the last remaining spots in Maryland without it.

Maryland officials signed a contract with Chesapeake Utilities to supply natural gas to the University of Maryland Eastern Shore (UMES) and the Eastern Correctional Institution. Switching to a different fuel source is expected to reduce carbon emissions as low as 40% and as high as 65%, according to the Bay Journal.

From an economic development standpoint, Chesapeake Utilities’ arrival in Somerset County symbolizes a new era, according to Somerset County Economic Development Executive Director Danny Thompson.

“We’ve been working for 15 years for this moment. There’s a lot of projects over the years we’ve lost out on because we were unable to check that one box on letters of intent that came across the desk,” Thompson told the Delaware Business Times. “There’s two anchor institutions that will benefit from this, but Somerset is also a disadvantaged community, and some of our energy costs are the highest in the state. Our residents and existing businesses will also benefit from this.”

Maryland is among the wealthiest states in the country, but Somerset County is one of its poorest jurisdictions, with the typical household earning a medium of $37,803 and 23% of its residents living in poverty, according to the U.S. Census Bureau. 

Chesapeake Utilities spokesman Justin Mulcahy said that as the utility expands, it expects many existing residents to convert, in addition to the “several large customers” who have expressed interest in making the switch.

“We consistently find strong interest from residents and businesses in our expanding service territory for cleaner, more economical natural gas service,” Mulcahy told DBT.

Thompson said there are at least two interested locations looking to make the switch, including Somerset Industrial Park. He also hopes that this will provide existing employers with some cost savings, and opportunities to use that money to reinvest in jobs.

“We have one business spend $1 million on energy costs, and switching to natural gas would reduce that by $400,000. They could use that to bring five or six new employees instead,” he said. 

It’s also a chance to diversify the economy, as Somerset County is Maryland’s largest chicken producer with several farmers growing flocks and Mountaire Farms operating a complementary grain mill. Since the project has been years in the making, Thompson is hoping that the county will soon reap the rewards.

“I can tell you right now we have five projects working through the process, with some of them looking at permits for construction in April or May,” Thompson said. “Is that purely because of natural gas? I can’t say. But there is a lot of buzz out there, and we’re now on the map.”

Chesapeake Utilities anticipates finishing construction and delivery of natural gas to UMES and Eastern Correctional Facility in the third quarter of 2021.

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