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Gas pipelines part of the fight against climate change, Williams' Armstrong says


Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021


Essential Energy Insights - January 2021

Gas pipelines part of the fight against climate change, Williams' Armstrong says

Governments in the U.S. Northeast have denied pipeline permits and moved to eliminate natural gas use in the New York City and Boston areas in an effort to get away from the fossil fuels that contribute to global warming. But to achieve immediate emissions reductions, Williams Cos. Inc.'s CEO said the region needs to embrace gas pipelines.

"We have to find a way to continue to utilize natural gas," the pipeline company's President, CEO and Director Alan Armstrong told S&P Global Market Intelligence at the end of a March 3 panel on U.S. energy infrastructure at the Bipartisan Policy Center in Washington, D.C.

Natural gas fuels the majority of power generation in the Northeast, whereas wind and solar provide only a fraction, and the region keeps seeing demand increase that the renewables have not matched, Armstrong said. With roughly a quarter of heating in New York state coming from heating oil and refinery gas, which have heavier content than natural gas, the state still has room to lower emissions by switching in natural gas, Armstrong said.

"Why we wouldn't take advantage of that, and why we wouldn't build infrastructure to take advantage of that, makes no sense to me," the CEO said. "Other than the fact that it has become politically popular — and almost religious — to say 'no fossil fuels' despite the amount of emissions reductions" that could be achieved by switching to gas.

"The good news is that we are seeing a lot of demand growth in the rest of the country and globally, and from an infrastructure provider's standpoint, we're going to go where the market demand has a need for us."

On Feb. 21, Williams was forced to cancel its Constitution Pipeline Co. LLC project between the Marcellus Shale in Pennsylvania and pipeline connections in New York after years of fighting over permits with New York and environmental groups, even though the pipe had received approval from the Federal Energy Regulatory Commission. The company has another pipeline project near New York City, the Northeast Supply Enhancement project, or NESE, which New York has also opposed.

For Williams, the economic situation around the Constitution pipeline changed in the years that it was in limbo, as New York made things harder and states and customers to the south of the Marcellus Shale asked for gas. "We developed three other [larger] projects while Constitution was being blocked," Armstrong told attendees. "So the Southeast states will enjoy that low-cost fuel supply. The Northeast states and New England will continue to be deprived of it and pay three to four times more for their gas supply."

Armstrong appeared optimistic on the Northeast Supply Enhancement project. "NESE is a little more direct and obvious in terms of the need for New York, and Constitution was not perhaps as obvious in terms of that need," Armstrong said. "National Grid has come out with a study, and I think it clearly shows that the best solution for meeting the needs of New York, from both an emissions standpoint and an economic perspective, is NESE."

Moderator Amy Harder, national energy and climate reporter with Axios, said environmental groups have had a big influence in the debate of over the use of fossil fuels and climate change, notably among Democratic presidential candidates, "pulling Democrats to the left." With no environmentalists on the panel, Harder took up their voice, asking why the gas industry was not supporting substantial policy to address the climate crisis.

Armstrong countered that the industry does support national policy to limit greenhouse gas emissions. The industry wants this to be part of updates to the National Environmental Policy Act, which guides the environmental reviews of proposed pipelines and many other types of large infrastructure projects, he said. The Trump administration is collecting public comments on the updates before it issues them in final form.

"Public concerns need to be addressed," Armstrong said. Pipelines "are not looking to get away from their responsibility to reduce impacts to the environment," but they want a predictable review process.

Armstrong said the industry's support for a national policy on greenhouse gases was evident in a report on oil and gas transportation infrastructure from the National Petroleum Council, an organization that advises the U.S. Department of Energy. Armstrong is the chair of the council's committee on transportation infrastructure. A pre-publication edition of the report, available at the Bipartisan Policy Center, said, "Industry shares the public's concerns that climate change is a serious issue that must be addressed. Litigation of individual projects to address climate concerns is an ineffective approach."

The report also found that constraints on gas pipeline access to New England and New York represent one of the nation's "critical infrastructure bottlenecks" for oil and gas transportation.

Another member of the panel, Marty Durbin, president of the Global Energy Institute at the U.S. Chamber of Commerce, said the U.S. oil and gas industry has reduced emissions even without a national policy. The National Petroleum Council report said increased use of gas in power generation has replaced coal and has "been the single largest contributor to reducing U.S. carbon dioxide emissions by 15% since 2005."

During a question-and-answer session, a member of the conservation organization Defenders of Wildlife asked if the pipeline industry would support a cooperative effort with other industries and government agencies to colocate pipelines with roads and utility infrastructure to minimize habitat destruction, reduce other environmental impacts and lower costs.

Armstrong said Williams and the industry like the idea of utility corridors, but the practice would need a strong central federal agency to make it work. Under the current system, the Federal Energy Regulatory Commission's decisions on pipeline routes can be altered or pushed aside by permitting agencies, states and other stakeholders, Armstrong said.

After the panel, Natural Resources Defense Council staff attorney Gillian Giannetti acknowledged that Republican members of Congress, the U.S. Chamber of Commerce and the gas industry were talking about solutions to climate change, which she said was a welcome change from the past but added that she found their efforts to be inadequate so far. "The challenges we face require bold and creative actions," she said. "The responses seem timid and ambivalent."