Ghosts of Pipelines Past and Future - Beleaguered Appalachian Gas Pipelines Would Reduce Emissions

If you follow developments in the energy industry, you know that news about permitting for major infrastructure projects can sometimes read more like a horror story: 14 years to build an electric transmission line, a decade to get a mining permit, and the reality that some projects can be constructed in far less time than it takes to secure the required permits and work through any legal challenges. It’s a known problem with a lot of contributing factors, but no easy answers. In today’s RBN blog, we look at how permitting difficulties have become a flashpoint for all sorts of stakeholders — industry groups, environmental advocates, the general public, and politicians of all stripes. Our focus today will be on the current poster child of permitting challenges, Mountain Valley Pipeline (MVP), but we’ll also discuss how permitting setbacks complicate the development of all types of projects, from traditional oil and gas pipelines to initiatives at the heart of the energy transition.

This past winter’s gas price spikes shined a bright light on the changing dynamics driving Eastern U.S. natural gas markets, especially the growth in gas-fired generation that is contributing to more frequent — and more severe — spikes in gas prices in the region on very cold days. There are other changes too. For one, gas is increasingly flowing from the Northeast to the Southeast as prodigious Marcellus/Utica production growth is pulled into higher-priced, higher-demand growth markets. In today’s blog, we conclude our series on ever-morphing gas markets on the U.S.’s “Right Coast” by examining how gas pipeline flows back East have changed on days besides the winter peaks, how much demand could be unlocked by forthcoming pipeline projects, and what that new demand will mean for flow and price patterns.

With recent project completions, Northeast takeaway constraints have eased, and regional supply prices have strengthened. But now the slate of planned pipeline expansions is dwindling. Between late-2015 and the end of 2018, midstreamers will have completed 23 takeaway projects out of Appalachia, totaling nearly 14.5 Bcf/d of capacity. That leaves just a handful of projects with little more than 6 Bcf/d of capacity to come, most of them facing stiff environmental opposition, regulatory turmoil and higher costs. Yet, as Appalachian gas production continues to grow, these projects will be critical to keeping the takeaway constraints and depressing supply pricing from returning, at least for a little longer. More than half of the remaining capacity would come from two competing projects — Dominion Energy’s Atlantic Coast Pipeline (ACP) and EQM Midstream Partners’ Mountain Valley Pipeline (MVP) — both greenfield efforts tied to growing gas-fired power generation demand along the Mid- and South-Atlantic seaboard and both embattled by a barrage of legal challenges. In today’s blog, we provide an update on the Atlantic Coast and Mountain Valley projects, including the latest status and timing.