FERC OKs Two Pipelines, But Future Projects Face Hurdles
Though the new chairman of the Federal Energy Regulatory Commission—the agency responsible for approving massive natural-gas pipelines—is making progress clearing a six-month backlog of such projects, he may be hamstrung by procedures put in place by the Obama administration and by at least one fellow commissioner.
In a 2-1 decision, FERC on Oct. 13 approved two pipelines that would bring gas to markets in the Southeast from shale fields in West Virginia: the 600-mile Atlantic Coast Pipeline and the 303-mile Mountain Valley Pipeline. Developers say the work could provide up to 27,000 construction jobs at peak.
The two controversial projects and other interstate pipeline projects have been limbo since February, when the five-member commission dropped to two members. The Senate approved two new members in August. Two more nominees await Senate approval.
New FERC Chairman Neil Chatterjee had promised to speed up the pipeline approval process. However, he will have to contend with the legacy of Obama, who issued guidance directing federal agencies to consider greenhouse-gas emission impacts in their environmental reviews.
That directive was a factor in August, when the U.S. Court of Appeals for the D.C. Circuit rejected FERC’s approval of three different gas pipelines in the Southeast, citing downstream GHG impacts of the projects.
Pipelines are going to be facing a “higher level of review,” says Susan Ginsberg, a vice president of regulatory affairs at the Independent Petroleum Association of America.
ACP developer Dominion says it included downstream GHG analysis in the filing for its ACP project. FERC has appealed the DC Circuit ruling, but the decision could point to a growing wariness by courts and regulators.
Chatterjee’s goals of quick approval may also be opposed by Commissioner Cheryl LaFleur, who voted against the East Coast pipelines on Oct. 13.
LaFleur argued there would be less environmental impact if portions of the projects were consolidated. She also argued that downstream environmental effects should be considered. Chatterjee said he “strongly” disagrees with LaFleur’s dissent.
The $5-billion Atlantic Coast Pipeline would begin in Harrison County, W.Va., run southeast through Virginia and then into North Carolina. The project would have a capacity of 1.5-million dekatherms. Pipe sizes would range from 16 in. to 42 in. Compressor stations are proposed in Lewis County, W.Va., Buckingham County, Va., and Northampton County, N.C. Dominion says the pipeline project would support 17,240 jobs during construction between now and 2019. I3 Engineering is the lead engineering/design firm for the project and Spring Ridge Constructors is the lead construction contractor.
The Mountain Valley Pipeline, being developed by a group led by EQT Midstream Partners, would run from West Virginia to southern Virginia. The $3.5-billion project would use pipe up to 42 in. in diameter and provide up to 2 million dekatherms per day of capacity. The pipe would require three compressor stations in the West Virginia counties of Wetzel, Braxton and Fayette. During peak construction, EQT says it would create 4,400 jobs in Virginia and 4,500 jobs in West Virginia.
Both pipelines need state approval to proceed, and construction on both is expected to begin this year.