The FERC, Anti-Pipeline Activism, and Other Shenanigans

The FERC, Anti-Pipeline Activism, and Other Shenanigans 

As we know, interstate natural gas pipelines are permitted under the authority of the Federal Energy Regulatory Commission (FERC). The Mountain Valley (MVP) and Atlantic Coast (ACP) pipelines coming out of West Virginia will provide natural gas to power plants in Virginia and North Carolina that will replace coal plants which will reduce carbon emissions significantly and reduce pollution even more significantly and comply with Obama’s Clean Power Plan even though that plan will be scrapped by Trump. Some of the gas may eventually be exported as LNG from the Cove Point terminal when it is readied. For this reason, protesters have claimed any eminent domain burying of pipe would be illegal.  Environmental impact of pipeline construction is temporary and far less than say a road. Sediment and erosion control is a priority. FERC comments for such construction have basically become a forum for anti-pipeline protesters. This is the case with any kind of public hearings as well. Those are often disrupted by protesters whose rigid goal is to stop the project. Public comments were meant to address specific local concerns rather than general comments about things like the downsides of fossil fuels and climate change. Gas is better for the climate than coal and far better for air pollution than coal. It takes several years to get such pipelines approved and built as it does other things like river hydroelectric power – partly because of built-in delays from notoriously slow, perhaps understaffed federal agencies like the U.S. Fish and Wildlife Service and the U.S. Forest Service. That is why bulk permitting and regional approvals have been proposed for such projects – to cut the B.S. red tape delays. 

Delay is always the secondary goal of anti-industry environmentalists if banning is not an option. Their goal is to land a blow to the “enemy,” however they can. There are many in federal (and some in state) agencies that are anti-industry and support such goals and many that don’t as well. So-called “fast-tracking” might mean 3 or 4 years instead of 5 or 6 these days. This is inefficient. Slowing down the economy should not be a goal of regulatory agencies. Protecting the environment should be the goal and that can be done reasonably and thoroughly on faster time-frames. Pipeliners are already limited by reduced construction periods due to things like non-disturbance of protected bat habitat. For an example, it has been predicted that the Rover Pipeline slated for Ohio will be delayed by one year if it does not get FERC approval before the tree-cutting season ends in March. Because of the bats tree-clearing cannot take place between March and November but instead has to be done in the dead of winter. Having six months or more out of the year when you can’t clear trees can make it tough to get projects completed on-schedule and this is in addition to the other routine regulatory delays mentioned. Pipeline companies have recently stated that FERC comments in their favor would be welcomed to balance out the organized campaigns against them. 

The other shenanigans include the pursuit of anti-trust allegations by the Sierra Club against pipelines as part of their ‘Beyond’ campaign. Here they are focused on the pipelines that are partly owned by the utilities buying the gas so as to secure it for their gas power plants. This assures their supply and helps them keep the price predictable and low – for themselves, and more importantly for their customers = us. The eminent domain objections are another issue. Objectors claim that since some gas may end up being converted to LNG and exported then the project is not in the public interest and eminent domain should not be used. They think it is just fine if a couple of land owners oppose the project then it should be scrapped. That is a bit ridiculous. Exact routes often have some flexibility and landowners can negotiate that – possibly a good reason for a legitimate public comment. All states have setback requirements for transmission pipelines. The pipelines are buried fairly quickly and reclaimed quickly so that disruption is minimal. I know from experience that disruption from maintenance (typically tree trimming and keeping the right-of-way clear) is minimal since I have a transmission pipeline cutting through my property. Aside from possible initial sedimentation and erosion issues the land disturbance is temporary and minimal. Habitat destruction and fragmentation is really minimal. Many of the transmission lines follow existing powerline right-of-ways and existing gas, oil, natural gas liquids, jet fuel, or gasoline pipelines for as much of their extent as is feasible. Yet another shenanigan are objections based on land being sacred to indigenous peoples. This is of course explored by state archaeologists, historians, as well as consultants who specialize in archaeological surveys. There are contingency plans for discoveries during construction and such discoveries are expected to be reported and penalties are imposed if they are not reported in a timely manner. The National Historical Preservation Act (NHPA) is often invoked and the opposers will insist on a detailed (and time-consuming) review. They do the same thing with the National Environmental Policy Act (NEPA) which suggests that projects potentially affecting the environment are required to have detailed environmental impact statements (EIS) which are also notoriously time-consuming. There are of course plenty of assessments of potential environmental impact before a proposed pipeline is approved by FERC and other agencies involved. That is one reason it currently takes several years to build a pipeline. Such insistences are mainly delay tactic by detractors.

Pennsylvania Governor Tom Wolf created a pipeline task force to deal with pipeline issues and the regional need for infrastructure buildout but their meetings too have been inundated by anti-fracking protesters and angry landowners. This has been the case in other public hearings related to oil and gas development and should be considered an abuse of what would otherwise be a civil forum to discuss real issues rather than an activist rally. 

Recently, several upstream and midstream oil and gas companies have banded together to request a one-time assessment for an area of mutual interest permit involving an environmental impact statement (EIS) regarding bat habitat. The EIS is set to take about one year to complete. Both endangered and non-endangered bats are facing significant loss of population due to a fungal disease called white-nosed syndrome. At issue is forest fragmentation due to tree cutting for well pads, facilities, roads, and pipelines. Environmental orgs are of course opposing the regional permitting request. 

Just recently the Draft Environmental Impact Statement (DEIS) for the Atlantic Coast Pipeline was released which suggests the pipeline will be approved pending further review. A few of the more serious issues involve running the line through karsted limestone terrain and especially some landslide risk in the more mountainous areas. These issues are being addressed and FERC seems satisfied with the company’s mitigation plans for them. After the company completes all their surveys there will be a final EIS. The DEIS alone took 2 years to complete. Some mitigation issues will be discovered and considered during and after construction as a practical matter. From the article: “Dominion has made more than 300 route adjustments and more than 250 miles of rerouting to “avoid environmentally sensitive areas and many other features of individual properties.”” This can be seen as the role of the FERC, not approval or denial, but finding the best route to avoid and minimize impact. In that sense they did ‘deny’ parts of the route and ‘approve’ alternative routing. No doubt some or much of that significant re-routing came about from public input and landowner input. Thus the public comment periods can be useful. Another public comment period on the DEIS is open from now until early April. The final EIS is expected in June and construction is hoped to begin in the fall. The final EIS will address three issues: 1) environmental impact, 2) whether the pipeline is needed, and 3) fair pricing. The Sierra Club and other groups question why a lengthy EIS was done before determining a need for the pipeline. While that is perhaps a fair question, one need for the pipeline is clear: to replace high emitting coal plants with much lower emitting gas plants to make electricity to meet pollution minimization goals, climate change mitigation goals, and to provide a secure supply of inexpensive gas for the plants. Gas plants will also be needed in the Southeast to back up renewable energy plants. 

As an aside, most people I know in oil & gas support renewable energy in the sense that we need energy so making more of it is seen as a good. They do not wish to injure renewable energy producers even if they are competitors in some places. While some may support less incentives to their competitors, many I would guess are fine with such incentives. In contrast, the more radical environmentalists tend to favor the destruction of the fossil fuel industry in all of its forms in whatever way that can be done. In recent years they have been focused strongly against fracking and in the last few years pipelines have been a major focus. Thus, delay is a part of that plan. Anything that might reduce the profits and profitability of fossil fuel companies, even temporarily, is cheered. But reducing those profits also reduces economic growth and job growth on all levels. While compliance costs are not considered too high by the industry, there is also the cost due to delays to be considered. Basically, time increases compliance costs. Thus, complaints about compliance “costs” also include the extra time required to satisfy permit requirements that involve overly detailed and time-consuming analyses.

Environmental groups have also complained that FERC is too close to industry, is funded by industry, and approves virtually all pipelines. Thus they claim FERC is biased in favor of industry. While that may seem to be the case, FERC does re-route pipelines and sets additional requirements. Since pipelines have always been infrastructure projects seen to be in the public interest – one need not see FERC’s regulatory role as one of approving or denying such projects, but one of seeking out the best way to go forward with it. They also complain that construction can begin before state permits associated with the Clean Water Act and federal wetlands permits. The state of New York denied the Constitution Pipeline based on state water permits (previous to construction in this case) and the pipeline companied sued. Of course, getting such permits may delay the projects considerably and for projects that already take years just to get to the first construction stage, being able to begin construction before the slow permits come is helpful. Pipelines are built when it is profitable enough to transport hydrocarbons from one place to another due to demand for the product via price. Anti-oil & gas group, Delaware Riverkeeper calls the actions of the FERC unconstitutional. Of course, Congress won’t buy that, nor should they.  

Transco’s Atlantic Sunrise Pipeline project going south from Marcellus fields in northeast Pennsylvania to connect to existing infrastructure along the Atlantic coast has just been approved for construction following issue of the final EIS. This project was only delayed by six months – less than some of the other major gas pipelines that have been delayed more than 2 years. Looking at the conditions for FERC approval one can see that many agencies are included and many plans are submitted for approval (some revised by FERC then resubmitted by the operator). Below is a list of the conditions for approval (from the Pipeline News article) as an example to show that this is a fairly thorough planning process:

• About 53.6 miles (27 percent) of the 199.4 miles of project pipeline facilities would be within or adjacent to existing rights-of-way, consisting of existing pipelines and/or electric transmission line rights-of-way.
• Transco would minimize impacts on natural and cultural resources during construction and operation of the project by implementing its Environmental Construction Plan; Upland Erosion Control, Revegetation, and Maintenance Plan; Wetland and Waterbody Construction and Mitigation Procedures; and other project-specific plans (Fugitive Dust Control Plan, Horizontal Directional Drilling Contingency Plan, Unanticipated Discovery Plans for Cultural and Human Remains and Paleontological Resources, Agricultural Construction and Monitoring Plan, Karst Investigation and Mitigation Plan, Unanticipated Discovery of Contamination Plan, Spill Plan for Oil and Hazardous Materials, Blasting Plan, Noxious and Invasive Plant Management Plan, Winter Construction Plan, Traffic and Transportation Management Plan, Abandoned Mine Investigation and Mitigation Plan, and Landslide Hazard Investigation and Mitigation Plan).
• The FERC staff would complete the process of complying with section 7 of the Endangered Species Act prior to construction.
• The FERC staff would complete consultation under section 106 of the National Historic Preservation Act and implementing regulations at 36 CFR 800.
• Transco would comply with all applicable air and noise regulatory requirements during construction and operation of the project.
• An environmental inspection program would be implemented to ensure compliance with the mitigation measures that become conditions of the FERC authorization.

In addition, FERC staff developed project-specific mitigation measures that Transco should implement to further reduce the environmental impacts that would otherwise result from construction and operation.

So we can see from above that many different construction, mitigation, and contingency plans are required.

I am not sure but I am guessing that after the current major transmission lines are built out of the Marcellus and Utica fields: MVP, ACP, ASP, Rover, Nexus, Constitution (maybe), Utopia liquids line, other liquids lines, a few minor lines, more connector lines, large gathering lines, compressor upgrades, and facilities upgrades – then the infrastructure build-out will be able to handle the Appalachian gas and deliver it to markets where it is needed so that fewer major additions will be needed in the future. This is in line with the modest increases in natural gas demand projected over the next few decades. Appalachian gas is by far the major gas growth engine in the U.S. (80-90+ % of new natural gas). Eagle Ford and Permian Basin gas are set to be exported via pipeline to Mexico. Cotton Valley and other gas will help feed the Louisiana markets while Appalachian bottlenecks are relieved. SCOOP/STACK gas from central Oklahoma will also add volumes. However, most of those plays are most economic as oil plays with gas being associated production. The dry gas of Appalachia has superior economics for gas than all of the others.   

References:

16,000+ Citizens Demand Unbiased Review of Fracked Gas Mountain Valley Pipeline Proposal – in Appalachian Voices, Dec. 22, 2016

 

Pipeline Projects Need Better PR, Says Panel – by Marie Cusick, in StateImpact (Pennsylvania), Dec. 16, 2015

Help Shine a Light on FERC – by Maya K. van Rossum, guest blogger, in Huffington Post, March 28, 2016

Appalachian Operators Collaborate to Manage Endangered Bats – by Jamison Cocklin, in NGI’s Shale Daily, Dec. 29, 2016

Long Awaited Environmental Statement on Atlantic Coats Pipeline Released – by Robert Zullo, in Richmond Times Dispatch, Dec. 29, 2016

FERC Issues Favorable EIS for Atlantic Sunrise Project – in Pipeline News, Jan. 3, 2017