The administration of President Donald Trump has said that constraints on pipelines and other energy infrastructure can trigger price spikes and pose a risk to national security but has yet to intervene in state or local-level permitting issues.
“It’s definitely not getting easier to build a new pipeline,” Stanley Chapman, executive vice president and president of U.S. natural gas pipelines at TransCanada Corp, told Reuters on the sidelines at the World Gas Conference in Washington.
“I’m seeing more already-approved pipeline projects that are under construction get held up by a judge in lawsuits and this has to be addressed either by FERC or with legislation,” he said. FERC, or the U.S. Federal Energy Regulatory Commission,oversees construction of new pipelines.
TransCanada owns about 30,000 miles of gas pipeline in the United States, making it one of the country’s biggest operators. It has been trying for more than a decade to build its Keystone XL oil pipeline project linking Canada’s oil sands to U.S. refineries.
Other pipeline developers feel the same.
“Fifteen years ago nobody cared that much about pipelines,today pipelines are under siege,” said Al Monaco, president and CEO of Enbridge Inc , with over 27,000 miles of gas transmission lines in North America.
FERC in April asked stakeholders to submit comments on whether the commission should revise existing pipeline approval policies, yielding feedback from industry backers.
“I have encouraged the FERC commissioners that if they move forward in revising this (policy) they should focus on timely review 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 firms to invest in new pipelines when “every regulatory action yields a lawsuit” that “leaves no project safe from the retroactive pulling of permits.”
STOPPING PIPELINE CONSTRUCTION
In recent weeks, environmental groups like the Sierra Club have won court orders delaying construction on EQT Midstream Partners LP’s Mountain Valley pipeline at several locations in West Virginia, and are now seeking a court order to also stop construction in Virginia.
“We don’t need these pipelines to meet our energy needs, so it makes no sense to lock us into generations of dependence ondirty fossil fuels,” said Joan Walker, who helps lead the Sierra Club’s Beyond Dirty Fuels Campaign.
EQT said it was disappointed and was evaluating legal and regulatory options to continue construction.
“If you stop the pipelines, you stop energy development.That’s how the thinking goes,” Enbridge’s Monaco said about the efforts of environmental groups.
Mountain Valley is one of several pipelines under construction to move gas from the Marcellus and Utica shale formations in Pennsylvania, West Virginia and Ohio to consumers in the Southeast, Gulf Coast and Midwest.
Production in the Marcellus and Utica, the biggest shale gas formations in the United States, has ballooned to 28.9 billion cubic feet per day (bcfd) from 1.5 bcfd a decade ago, according to federal energy data. One billion cubic feet is enough to fuel about 5 million U.S. homes for a day.
The industry is now eyeing growing export markets by investing in facilities that can liquefy gas for shipment overseas. The United States has sent cargoes to nearly 30 countries in the past year.
NEW YORK BLOCKS GAS PIPES
Senator Capito said it was ironic that U.S. gas is headed around the world but struggles to reach New England.
“Right now gas from the Marcellus and Utica shale is being blocked by some of our neighboring states, which cuts off our markets in New England,” she said, referring to New York which spans the Canadian border to the Atlantic.
U.S. Energy Secretary Rick Perry said New York’s efforts to stop new pipelines could pose “a national security issue that out weighs the political concerns in Albany, New York.”
He said polar vortex weather in the winter or a cyber attack could threaten to leave Wall Street in the dark and hospitals without power. “The leadership (of New York) is keeping pipelines from being built for strictly political purposes,”Perry said.
In January, gas prices soared to a record high due to pipeline constraints during an extreme cold spell that forced power generators in New England to resort to burning diesel and Russian imported LNG.
New York has denied water permits for a few pipelines from Pennsylvania, including Williams Cos Inc’s Constitution and Northeast Supply Enhancement projects and National Fuel Gas Co’s Northern Access.
The New York Department of Environmental Conservation (DEC)said the department has a rigorous review process to protect public health and the environment.