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.
More than four years ago, in our 50 Ways to Leave the Marcellus Drill Down Report, we discussed the race by midstream companies to add new gas pipeline takeaway capacity out of what was already the U.S.’s premier natural gas production area. By late 2014, production in the Marcellus/Utica was topping 18 Bcf/d and headed for 30 Bcf/d by 2019. Well, here we are in The Year of the Pig and, sure enough, production is at ~30 Bcf/d and most of the 40-plus takeaway projects we listed have been completed and are in operation. We looked at a number of the more recent takeaway additions in our “Waiting on the World to Change” blog series, including Williams/Transco’s 1.7-Bcf/d Atlantic Sunrise project, Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission, and TransCanada’s Mountaineer Xpress and Gulf Xpress, which together will allow another 1 Bcf/d to flow south/southwest out of the Marcellus/Utica.
As we said in today’s intro, many of the efforts to develop new gas takeaway capacity into New York — and beyond the Empire State into New England — ran into trouble early and often. There have been some successes, such as Williams/Transco’s New York Bay Expansion, which increased gas flows into New York City, and Enbridge’s Atlantic Bridge project, which boosted flows through the Big Apple’s northern suburbs and into New England. But those improvements were essentially expansions of existing pipelines and largely along existing rights of way. Two bigger-capacity pipeline projects in upstate New York — the 650-MMcf/d Constitution Pipeline (dashed yellow line in Figure 1) from northeastern Pennsylvania to just west of Albany, NY, and the ~500-MMcf/d Northern Access Pipeline (dashed red line) from north-central Pennsylvania to near Buffalo, NY — have been stalled for a number of years, mostly due to their failure to secure water-quality permits from the New York Department of Environmental Conservation (NYDEC).