Kinder Morgan, Inc. has withdrawn its right-of-way application with the U.S. Bureau of Land Management for the proposed Lobos CO2 Pipeline.
The $1 billion project that includes development of the St. Johns CO2 source field in Apache County, Ariz. and the Cortez Pipeline expansion from Torrance County to southeastern New Mexico is being re-evaluated due to the falling price of oil. The pipeline would have run 213 miles from Arizona through New Mexico to the Cortez Pipeline south of Moriarty in Torrance County.
“We have not canceled the Lobos Pipeline Project, but rather delayed it for the time being given current market conditions,” said Jesse Arenivas Kinder Morgan CO2 president.
Mark Matthews, the BLM authorized officer for KMI, said he had received verbal confirmation that Kinder Morgan was withdrawing its application early Friday.
If the company wants to come back to the project, then they would have to start from scratch, Matthews said.
“This decision was probably motivated by market factors, and we all know that at some point in the not-too-distant future those market factors could shift in the opposite direction,” state Rep. Matthew McQueen, who represents District 50, said by email.
In a news release, Kinder Morgan said the decision to withdraw the application was related to “current market conditions.”
“KMI is re-evaluating the timing of its planned investment of approximately $1 billion to develop the St. Johns CO2 source field in Apache County, Arizona, and the associated construction of the Lobos Pipeline and expansion of the southern portion of the Cortez Pipeline,” the news release said.
The Lobos Pipeline had been proposed in 2013, but some landowners along the route voiced opposition to the project.
In southern Torrance County, the Resistiendo/Resist the CO2 Pipeline group was formed last year to oppose the proposal.
Members of the group were glad Friday to hear the project application had been withdrawn.
“Members are cautiously optimistic that New Mexico will not be the site of another unwanted, unneeded pipeline that could do serious harm to our sensitive environment, disturb historical and cultural areas and impact critical watershed areas in the region,” said Deb Jones of the group by email.