Politics must be kept out of permitting processes controlled by New York, other states and federal agencies to make U.S. natural gas pipeline investments more secure, the head of the U.S. Department of Energy and the CEO of Enbridge Inc. said.
"The private sector is just begging for the surety to know that, if they invest their capital, they'll have a pretty good opportunity to have a return on an investment," Energy Secretary Rick Perry said at the World Gas Conference. "We've become so good at producing our product, [but] we've got a pipeline capacity issue."
Pipeline constraints around the Marcellus Shale region led to higher energy costs this winter, especially in areas hit by cold temperatures, Perry said. He said that with more coal and nuclear power plants scheduled to retire in the Northeast, another polar vortex there could mean New York residents' "health and well-being is held in jeopardy."
"The leadership of [New York] that is keeping pipelines from being built for strictly political purposes is going to have a real reckoning — I wouldn't want to be the governor of that state in that situation," said Perry, a former Texas governor.
Perry pointed to Constitution Pipeline Co. LLC's 121-mile pipeline project between Pennsylvania and New York. The project has been stonewalled by the New York State Department of Environmental Conservation, he said in a June 28 presentation. The developer asked the Federal Energy Regulatory Commission in late June for an extension until the end of 2020, four years after the project's initial deadline, on the grounds that the state denied the project a Clean Water Act permit. The U.S. Court of Appeals for the 2nd Circuit and the U.S. Supreme Court have upheld New York's ruling on the permit.
Enbridge President and CEO Al Monaco said at the same conference June 28 that federal agencies, such as FERC, need to improve their permitting processes too. Congress has examined the issue, especially after the U.S. State Department under the Obama administration held up an approval for a cross-border piece of TransCanada Corp.'s Keystone XL crude oil pipeline. In 2018, FERC has issued orders to approve pipeline projects or to uphold approvals that contain dissenting statements from Democrats who are concerned about the agency's analysis of the environmental impacts and the public need for a project. That split could produce an impasse in some pipeline proceedings when the commission loses its Republican majority with the departure of Commissioner Robert Powelson in August.
"Let's make a determination upfront when it comes to a project as to whether or not it's in the national interest first," Monaco said. Developers like Enbridge could then better strategize how much capital to invest and where to invest it, he said.
Pipeline developers need to do their part, Monaco said. They need to exceed regulatory environmental and safety standards, and they need to show people living near the pipeline how a proposed project will serve them, he said.