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Pipeline Acceleration Plans Backfire

Tuesday, October 15, 2019

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The current administration’s attempts to fast-track energy projects, namely pipelines, have been met with increasing levels of resistance, according to reports. Most recently, plans for three of the biggest pipeline projects have taken a hit, resulting in delays and increased costs totaling millions of dollars.

According to Reuters, the delays apply to two gas pipelines—Atlantic Coast and Mountain Valley—as well as the crude oil Keystone XL pipeline that would start in Canada.

Pipeline Developments

The Atlantic Coast Pipeline, sister to the Mountain Valley Pipeline, is a 42-inch pipeline currently owned by a consortium composed of Dominion Energy Inc., Duke Energy Corp., Piedmont Natural Gas and Southern Company Gas, and will begin in West Virginia, run through Virginia with a lateral arm connecting to Chesapeake and then leg its way down to eastern North Carolina.

The proposed route was developed over the course of three years and extensive evaluations. In January, a Virginia state board unanimously approved a gas compressor station permit for the Atlantic Coast Pipeline project, a $6.5 billion, 600-mile shale gas pipeline. According to Reuters, however, as it stands, the project might never be finished if the U.S. Supreme Court doesn’t overturn a lower-court blockage of the route.

© TransCanada Corporation. All rights reserved

The current administration’s attempts to fast-track energy projects, namely pipelines, have been met with increasing levels of resistance, according to reports. Most recently, plans for three of the biggest pipeline projects have taken a hit, resulting in delays and increased costs totaling millions of dollars.

The Mountain Valley Pipeline, owned and still being constructed by Mountain Valley Pipeline LLC—a joint venture between EQT Midstream Partners LP, NextEra US Gas Assets LLC, Con Edison Transmission Inc., WGL Midstream and RGC Midstream LLC—is slated to be operated by EQT Midstream Partners. In August, developers voluntarily suspended construction on stretches of the pipeline in light of a recent lawsuit that sought to address concerns about the project’s impact on local endangered species.

As for the Keystone XL pipeline, the 1,179-mile project was first proposed by TransCanada in 2008 and was subject to years of reviews and delays before the State Department under former President Barack Obama rejected the plan in late 2015 on the grounds that it was not in the national interest of the United States. During the seven years that the line was under consideration, it had become a lightning rod for environmental activists. In August, the Nebraska Supreme Court ruled its approval of an alternate route for the pipeline that was proposed by TC Energy, once known as TransCanada.

Acceleration Plans Backfire

D.J. Gerken, a senior attorney with the Southern Environmental Law Center, based in North Carolina, noted that the current administration’s focus on accelerating industry was likely to draw legal trouble, adding that pressure from utility companies and the Trump administration "produced flawed permits.”

In the case of the Atlantic Coast pipeline, once President Donald J. Trump took office, the U.S. Forest Service, which had originally expressed doubt over the project, seemed to changed its mind in issuing both permits and a waiver for the pipeline to move across the Appalachian Trail into national forest located in Virginia. Though the unfolding saga includes the Sierra Club moving in response to the issuing of the construction permit, construction ceased on the project in December 2018.

The Mountain Valley pipeline has so far faced a similar fate, though West Viriginia has since made some rule changes related to project stream crossings. The U.S. Army Corps of Engineers is currently working to issue new permits for both Mountain Valley and Atlantic Coast. Plans were also to have Mountain Valley complete by the end of 2018 for $3.5 billion, though that number has since potentially increased to $5 billion with plans for being operational by mid-2020. Officials representing Dominion and EQM have voiced dispute against the idea that approvals for these projects were fast-tracked. The application to build Atlantic Coast was also reportedly filed in 2014.

   

Tagged categories: Government; Infrastructure; NA; North America; Oil and Gas; Pipelines; Program/Project Management; Project Management

Comment from T W, (10/15/2019, 7:48 AM)

Not a backfire, just a road bump.


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