June 28, 2018, by Scott DiSavino
(Reuters) – The United States should help the natural gas industry overcome environmental challenges to new pipeline projects by adjusting regulations or adopting new laws favoring infrastructure, an executive at TransCanada Corp said at a conference this week.
Suppliers in the United States, the world’s biggest natural gas producer, have had a harder time getting shipments to market as more environmental lawsuits by U.S. states, green groups and property owners have tied up pipeline construction.
“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 amid ongoing environmental delays.
FERC in April asked stakeholders to submit comments on whether the commission should revise existing pipeline approval policies, something that has yielded 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 energy firms to invest in new pipelines when “every regulatory action yields a lawsuit” that “leaves no project safe from the retroactive pulling of permits.”
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 through federal lawsuits and are now seeking a court order to also stop construction in Virginia.
EQT said it was disappointed and was evaluating legal and regulatory options to continue construction.
Mountain Valley links West Virginia and Virginia. It is one of several pipelines under construction to transport gas from the Marcellus and Utica shale formations in Pennsylvania, West Virginia and Ohio to consumers in the U.S. Southeast, Gulf Coast and Midwest where gas demand is growing fast, especially for power generation and LNG export.
The Sierra Club says the United States should focus on clean energy sources like wind and solar.
“We don’t need these pipelines to meet our energy needs, so it makes no sense to lock us into generations of dependence on dirty fossil fuels,” said Joan Walker, who helps lead the Sierra Club’s Beyond Dirty Fuels Campaign.
Walker said she believe FERC currently “acts as a rubber stamp” for energy infrastructure projects.
The United States is the world’s biggest producer and consumer of natural gas and is on the cusp of becoming one of its top exporters.
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 boom came as producers figured out how to use hydraulic fracturing and horizontal drilling to unlock the gas from the rocks.
The industry is 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.
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.
New York has denied water permits for a few pipelines that would move gas into the state 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 “subjects all applications for environmental permits to an extensive and transparent review process designed to deny any permit that is found not to be protective of public health and the environment.”
Utilities in Boston this winter had to resort to burning diesel and Russian imported LNG to supply enough electricity to consumers during a January cold spell, Capito noted.
Reporting by Scott DiSavino; Editing by David Gregorio