Pipeline infrastructure is critical to natural gas producers, facilitating the safe, efficient transport of domestic energy resources from drilling sites to end markets – and ultimately, consumers who use natural gas to heat their homes. And as a recent report in Crain’s Cleveland Business notes, delays in the construction of pipelines such as Rover could have a devastating effect on those consumers, as regulatory hurdles hinder producers’ ability to meet market demand.
Plans for a vast expansion of pipelines to deliver low-cost gas from the Marcellus and Utica reservoirs are facing setbacks amid lengthy reviews from regulators and heightened opposition from environmental groups. The possible delays threaten to prolong the bottlenecks that helped push drilling for the fuel to historic lows last year, leaving the market at risk of price spikes.
As the article details, the Rover Pipeline is still under FERC review:
While Dallas-based Energy Transfer planned to start construction [on Rover] in the third quarter of 2016, it’s still awaiting a permit from federal regulators. Rover remains on course to start up by mid-2017, with no changes to the schedule, Vicki Granado, a company spokeswoman, said by e-mail.
Energy Transfer could meet its schedule to place a part of the Rover pipeline into service by the end of this year if a permit is issued in January and construction is accelerated, Anthony Yuen, an analyst at Citigroup Inc. in New York, said in a note to clients Wednesday.
“Depending on when the project receives its final certificate, delays to in-service are likely,” Yuen said.
And the unexpected inability to transport natural gas could result in sweeping market effects, ultimately hurting consumers:
Delays to [these] projects could leave less gas in storage at the end of the winter than traders are expecting, pressuring prices higher, Pira’s Viswanath said.
“We could end up with lower inventories or we could end up with a lack of new midstream projects, which both result in a market that’s tighter than anticipated and not something that’s being captured in the widow maker,” she said.
Ultimately, countless homeowners across the region rely on affordable natural gas to heat their homes through the winter months. And continuing FERC delays in approving the Rover Pipeline could seriously impede their ability to do so. This is only one example of the many demands for natural gas, which range from feedstocks in the manufacturing and agricultural industry to electricity generation. For these reasons, CEPI encourages FERC Chairman Norman Bay to grant full approval to the Rover Pipeline.