A program of the West Virginia Oil & Natural Gas Association

Natural Gas Projects Await Approval

By Casey Junkins | January 23, 2016 | The Intelligencer / Wheeling News-Register

WHEELING -Marcellus and Utica shale industry leaders believe the federal government is delaying construction of interstate pipelines that would relieve the region's natural gas glut, but regulators say the projects must pass environmental impact evaluations before approval.

Largely due to a lack of interstate pipelines capable of sending the product to New York City, Chicago and other major markets, many shale drillers working in Ohio, West Virginia and Pennsylvania are only getting about 75 cents for every 1,000 cubic-foot unit of natural gas they pump.

One producer in particular,

Consol Energy, recently reported selling the product at a loss.

Applications to build five major interstate pipelines worth at least $15 billion in total are pending before the Federal Energy Regulatory Commission: the Atlantic Coast Pipeline, the Rover Pipeline, the Nexus Pipeline, the Leach Express Pipeline and the Mountain Valley Pipeline. In addition to moving natural gas, each pipeline project would support thousands of construction jobs and millions of dollars in tax revenue.

"Our region desperately needs proposed pipeline projects like the Rover Pipeline in order to move natural gas to market and to support continued production. We urge the Federal Energy Regulatory Commission to approve proposed pipeline projects so that construction can begin as soon as next year," Ohio Oil & Gas Association President David Hill said.

"We just can't put any more gas into the market because there is nowhere to put it," West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco said. "We have to focus on the infrastructure. We have to get this gas out of here."

However, FERC spokeswoman Tamara Young-Allen said each of the projects is on a normal review timeline. She said her agency received the formal applications for the Rover on Feb. 20; the Atlantic Coast on Sept. 18; the Mountain Valley on Oct. 23; the Leach XPress on Nov. 13; and the Nexus on Nov. 20.

"It usually takes about a year to 18 months from the time we receive the formal application," she said. "All of them are undergoing environmental review."

The FERC consists of commissioners who are appointed by the president with the advice and consent of the Senate. Commissioners serve five-year terms and have an equal vote on regulatory matters. Unlike the Pipeline and Hazardous Materials Safety Administration, FERC does not investigate pipeline accidents. However, its members do establish where pipelines are built.

"For the Rover, we hope to have the final environmental impact study done by July. It would then go to the FERC members for a vote," Young-Allen said. "Our staff is still gathering more information on the others."

The $4.3 billion Rover Pipeline, developed by ET Rover Co., would be able to transport up to 3.25 billion cubic feet of natural gas per day, or enough to supply about 73,000 homes for an entire year.

"Pipeline construction has benefits throughout the manufacturing supply chain - be it sourcing steel, building compressor stations or valves," added West Virginia Manufacturers Association President Rebecca McPhail.

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