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
