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FERC OKs 4 more gas pipe expansions amid ongoing greenhouse gas debate

The Federal Energy Regulatory Commission on Dec. 19 voted 2-1 to approve four natural gas pipeline expansions, including the 850 MMcf/d Adelphia Gateway LLC project, which would carry Marcellus Shale gas to the greater Philadelphia industrial region.

The action, at FERC's monthly open meeting, came as commissioners continued their tug of war over the scope of greenhouse gas considerations needed in interstate gas project reviews. Democratic Commissioner Richard Glick accused the majority of ignoring federal appeals court instructions and failing to account for the significance of reasonably foreseeable greenhouse gas emissions associated with the projects. Commissioner Bernard McNamee penned concurring statements on the four project expansions, laying out his contrasting legal reasoning.

Aside from the Adelphia project, the commissioners voted 2-1 in favor of Dominion Energy Transmission Inc.'s 5.1-mile, 150 MMcf/d West Loop project intended to fuel a new gas-fired plant in Wellsville, Ohio (FERC docket CP19-26); Eastern Shore Natural Gas Co.'s roughly 20-mile, 11.8 MMcf/d Del-Mar Energy Pathway project (FERC docket CP18-548); and Tennessee Gas Pipeline Co.'s 72,400 MMcf/d 261 upgrade project in Massachusetts.

Two facility upgrades won unanimous approval: Southern Star Central Gas Pipeline Inc.'s Lines DT and DS replacement project and a Texas Eastern Transmission LP compressor unit replacement project in Berks, Pa. In those two cases, Glick said it was simple to calculate that there were minimal greenhouse gas emissions and therefore make a finding of no significance.

Industrial development

The larger Adelphia Gateway project entails conversion of a 50-mile portion of an existing oil pipeline, Interstate Energy Co. LLC, to gas service, construction of two new 16-inch-diameter laterals, and 11,250 horsepower of compression to gas service. FERC's decision was immediately welcomed by industrial consumers, who had repeatedly pressed FERC to act on the project which had received its environmental assessment back in January. (FERC docket CP18-46)

"Manufacturing companies have spent tens of millions of dollars expanding their facilities and building cogeneration facilities to provide low-cost steam energy and self-generated power, which rely on this pipeline getting placed into service," the Industrial Energy Consumers of America said in a statement.

The Adelphia project would continue supplying two existing power plants served by the legacy pipeline using gas from Texas Eastern and Transcontinental Gas Pipe Line Co. LLC. It would also expand interstate service through interconnects with pipelines to meet growing demand in the Philadelphia market area. According to S&P Global Platts Analytics, it may help offset price spikes at nearby trading hubs by adding flexibility in moving gas across systems in an area that can become constrained during peak winter cold periods.

Glick-McNamee debate

In an opening statement, Glick suggested McNamee's concurrences on the gas projects make "a pretty startling assertion" that the Natural Gas Act does not give FERC authority to deny a project based on downstream environmental impacts.

"Different people can have different opinions, ... but the [U.S. Court of Appeals for the District of Columbia Circuit] already told us" in the Sabal Trail Transmission case that FERC can do so, he said. "I think we're either going to follow the courts or we're not. I choose to follow the courts, and I'm going to keep on dissenting to the extent the commission is not following the courts."

McNamee said his concurrences show he recognizes Sable Trail as binding precedent, but believes FERC lacks authority to deny an application under the Natural Gas Act because of downstream emissions or the upstream development of natural gas. The court rulings do not mean "that we have all brand new authority to start regulating upstream and downstream natural gas development and use."

Among the other expansions approved was Eastern Shore's roughly 20-mile Del-Mar Energy Pathway Project, which will serve Maryland's Delmarva Peninsula and Sussex County, Del. Chesapeake Utilities Corp. in September pressed FERC to greenlight the project, which would provide gas transportation service to Somerset County, Md., one of three Maryland counties lacking access to gas. FERC had issued an environmental assessment back April.

Maya Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.