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New energy secretary slams 'bad actors' for delaying pipeline projects

Energy Secretary Dan Brouillette doubled down on the Trump administration's criticism of oil and natural gas pipeline construction opponents during his first public speech as the U.S. Department of Energy's leader.

"We must counter those who would do anything to stop the use of any important sources of energy," Brouillette said during a National Petroleum Council meeting on Dec. 12 in Washington, D.C. "Certainly bad actors are ... trying to decrease the benefits for consumers."

President Donald Trump in April signed an executive order targeting water quality certifications under Section 401 of the Clean Water Act. These kinds of certifications have slowed down high-profile projects in New York, such as Williams Cos. Inc.'s Constitution pipeline and the Northeast Supply Enhancement project to expand subsidiary Transcontinental Gas Pipe Line Co. LLC's system. A proposed U.S. Environmental Protection Agency regulation designed to prevent states from using water quality reviews to block natural gas pipelines and other energy infrastructure, however, is running into stiff opposition from states, tribal nations and environmental groups.

On the meeting's sidelines, Brouillette, who was sworn in at the White House on Dec. 11, said that state regulators have prevented New England from having sufficient gas infrastructure.

"What New York is doing is denying New Englanders access to very clean gas that they [would] have ready access to," he said. "For those who really care about the environment, for those who really care about reducing carbon emissions, it seems nonsensical to us that you would not allow the use of natural gas in that area. ... It's a bit of hypocrisy."

Williams, for one, recently decided to allocate zero construction capital to the Northeast Supply Enhancement project after New York Gov. Andrew Cuomo announced a settlement between the state and project customer National Grid USA. The dispute between the state and utility stemmed from New York's refusal to grant a Section 401 permit for a proposed pipeline that would run through New York Bay as part of the project. The denial prompted National Grid to stop processing applications for gas hookups in its downstate territories until New York approved the pipeline, but the governor's office on Nov. 25 announced that National Grid will pay a $36 million penalty and lift its moratorium on gas service to new customers in parts of New York to help the utility avoid a potential loss of its license to operate there.

Brouillette also advocated for constructing additional gas pipelines out of West Texas' Permian Basin to feed Gulf Coast LNG export terminals.

"There's associated gas that comes along with the production of oil," he said. "We'd like to get that production to the coastline as fast as we can so that we can make that available to both the Asian market and the European market."

Some of those projects have faced permitting issues as well, including Kinder Morgan Inc.'s Permian Highway pipeline expected to begin service in 2020. The pipeline, which would cut through the Texas Hill Country, has garnered staunch opposition from area residents and local governments.

The Kyle City Council, for example, voted in October to settle a federal lawsuit the pipeline developers had filed against the city in response to an ordinance that would have restricted construction. In exchange for an exemption from the ordinance, Kinder Morgan agreed to pay the city $2.7 million in two separate payments and to cooperate with the city on future infrastructure projects that the city might plan along the pipeline path.