Constitution Pipeline

This past spring — 10 years after Williams Cos. first proposed the Northeast Supply Enhancement Project and one year after it scrapped plans for it — the effort to add 400 MMcf/d of natural gas pipeline capacity into New York City was revived. Since then, FERC has re-approved the project and regulators in New York and New Jersey have been mulling over whether to issue water-quality permits. In today’s RBN blog, we discuss Williams’s renewed push to get NESE permitted and built.

The Federal Energy Regulatory Commission (FERC) took several steps in June to slash red tape and speed the construction of natural gas projects in the U.S. interstate and export markets. This is the latest in state and federal efforts to reduce the years-long legal battles around energy infrastructure and quicken the development of vital projects such as pipelines and LNG terminals. In today’s RBN blog, we’ll highlight the recent efforts to remake and improve the permitting process. 

The vast majority of the incremental natural gas pipeline capacity out of the Marcellus/Utica production area in recent years is designed to transport gas to either the Midwest, the Gulf Coast or the Southeast. Advancing these projects to construction and operation hasn’t always been easy, but generally speaking, most of the new pipelines and pipeline reversals have come online close to when their developers had planned. In contrast, efforts to build new gas pipelines into nearby New York State — a big market and the gateway to gas-starved New England — have hit one brick wall after another. At least until lately. In the past few weeks, one federal court ruling breathed new life into National Fuel Gas’s long-planned Northern Access Pipeline and another gave proponents of the proposed Constitution Pipeline hope that their project may finally be able to proceed. Today, we consider recent legal developments that may at long last enable new, New York-bound outlets for Marcellus/Utica gas to be built.

On August 4, the U.S. Senate confirmed two new commissioners for the Federal Energy Regulatory Commission (FERC), restoring the three-member quorum legally required for FERC to vote. The Senate action ended a six-month dry spell during which FERC could not issue any orders, and thus could not approve any of the many pipeline projects pending there. What does it mean that FERC can act again to approve new projects? And does that mean the industry can move forward at the pace it needs? Today we explore these questions and assess what it will take to get some key gas infrastructure projects back on track.

Natural gas imports into the Northeast US from Canada have fallen to around 1 Bcf/d from 3 Bcf/d in 2008. Infrastructure projects are underway or planned to replace Canadian supplies with gas from rapidly expanding Marcellus and Utica production. US gas is already flowing into Ontario at Niagara and will flow into Dawn if one or more Utica gas export projects are built. . Meantime the proposed Constitution pipeline from the Eastern Marcellus to New York would replace Canadian supplies into New York on the Iroquois pipeline. Today we review the next pieces of the reversal puzzle.