The United States should help thenatural gas industry overcome environmental challenges to newpipeline projects by adjusting regulations or adopting new lawsfavoring infrastructure, an executive at TransCanada Corp said at a conference this week.
Suppliers in the United States, the world's biggest naturalgas producer, have had a harder time getting shipments to marketas more environmental lawsuits by U.S. states, green groups andproperty owners have tied up pipeline construction. "It's definitely not getting easier to build a newpipeline," Stanley Chapman, executive vice president andpresident of U.S. natural gas pipelines at TransCanada Corp , told Reuters on the sidelines at the World GasConference in Washington. "I'm seeing more already-approved pipeline projects that areunder construction get held up by a judge in lawsuits and thishas to be addressed either by FERC or with legislation," hesaid. FERC, or the U.S. Federal Energy Regulatory Commission,oversees construction of new pipelines. TransCanada owns about 30,000 miles of gas pipeline in theUnited States, making it one of the country's biggest operators.It has been trying for more than a decade to build its KeystoneXL oil pipeline project linking Canada's oil sands to U.S.refineries amid ongoing environmental delays. FERC in April asked stakeholders to submit comments onwhether the commission should revise existing pipeline approvalpolicies, something that has yielded feedback from industrybackers. "I have encouraged the FERC commissioners that if they moveforward in revising this (policy) they should focus on timelyreview and approval or disapproval of pipeline certificates,"U.S. Senator Shelley Moore Capito, Republican of West Virginia,said at the World Gas Conference. She said it was tough for energy firms to invest in newpipelines when "every regulatory action yields a lawsuit" that"leaves no project safe from the retroactive pulling ofpermits." In recent weeks, environmental groups like the Sierra Clubhave won court orders delaying construction on EQT MidstreamPartners LP's Mountain Valley pipeline at severallocations in West Virginia through federal lawsuits and are nowseeking a court order to also stop construction in Virginia. EQT said it was disappointed and was evaluating legal andregulatory options to continue construction. Mountain Valley links West Virginia and Virginia. It is oneof several pipelines under construction to transport gas fromthe Marcellus and Utica shale formations in Pennsylvania, WestVirginia and Ohio to consumers in the U.S. Southeast, Gulf Coastand Midwest where gas demand is growing fast, especially forpower generation and LNG export. The Sierra Club says the United States should focus on cleanenergy sources like wind and solar. "We don't need these pipelines to meet our energy needs, soit makes no sense to lock us into generations of dependence ondirty fossil fuels," said Joan Walker, who helps lead the SierraClub's Beyond Dirty Fuels Campaign. Walker said she believe FERC currently "acts as a rubberstamp" for energy infrastructure projects. The United States is the world's biggest producer andconsumer of natural gas and is on the cusp of becoming one ofits top exporters. Production in the Marcellus and Utica, the biggest shale gasformations in the United States, has ballooned to 28.9 billioncubic feet per day (bcfd) from 1.5 bcfd a decade ago, accordingto federal energy data. One billion cubic feet is enough to fuelabout 5 million U.S. homes for a day. The boom came as producers figured out how to use hydraulicfracturing and horizontal drilling to unlock the gas from therocks. The industry is eyeing growing export markets by investingin facilities that can liquefy gas for shipment overseas. TheUnited States has sent cargoes to nearly 30 countries in thepast year. Capito said it was ironic that U.S. gas is headed around theworld but struggles to reach New England. "Right now gas from the Marcellus and Utica shale is beingblocked by some of our neighboring states, which cuts off ourmarkets in New England," she said. New York has denied water permits for a few pipelines thatwould move gas into the state from Pennsylvania, includingWilliams Cos Inc's Constitution and Northeast SupplyEnhancement projects and National Fuel Gas Co's NorthernAccess. The New York Department of Environmental Conservation (DEC)said the department "subjects all applications for environmentalpermits to an extensive and transparent review process designedto deny any permit that is found not to be protective of publichealth and the environment." Utilities in Boston this winter had to resort to burningdiesel and Russian imported LNG to supply enough electricity toconsumers during a January cold spell, Capito noted. (Reporting by Scott DiSavino; Editing by David Gregorio)