Stakeholders Focus on Pipelines

With the Marcellus Shale Play going strong after a decade and some speculation that the Utica Shale Play may be even larger (according to two-year geological study conducted by the Appalachian Oil and Natural Gas Research Consortium, a program of the National Research Center for Coal and Energy at West Virginia University, see, it is not surprising that many stakeholders have turned their focus to the development of pipelines that are needed to transport the gas from the production sites to markets in the northeast. 

On August 12, 2014, NiSource released a press release announcing plans to commit $1.75 billion towards projects to transport natural gas produced in the Marcellus and Utica shale plays. The new investments include two significant projects, one of which involves construction by Columbia Transmission of a new natural gas pipeline in Ohio and West Virginia that will enhance its existing infrastructure and support natural gas supply development in western Pennsylvania, northern West Virginia and eastern Ohio. The proposed Ohio and West Virginia pipeline, known as Columbia Transmission’s Leach XPress project, is supported by long-term firm service agreements with Range Resources – Appalachia, LLC, Noble Energy, Inc., Kaiser Marketing Appalachian, LLC and American Energy Utica – LLC. The project, which involves construction of approximately 160 miles of pipeline, compression and related facilities on Columbia Transmission’s system, will provide access to multiple Marcellus and Utica receipt points and establish a substantial new header system serving the heart of the Appalachian supply basin.

On July 23, 2015, EQT Midstream Partners, LP announced it has entered into a definitive agreement with Range Resources – Appalachia, LLC to construct a natural gas header pipeline in southwestern Pennsylvania to support Range’s dry Marcellus and Utica development at a projected cost of $250 million. The partnership intends to construct the pipeline in 2 phases, with phase 1 expected to be operating by Q3 2016 and phase 2 by mid-year 2017.

Pennsylvania can play a key role in the development of pipelines needed to provide energy to the northeast. On July 22, 2015, the Pipeline Infrastructure Task Force (PITF) formed by Pennsylvania Governor Tom Wolf and chaired by the acting secretary of the Pennsylvania Department of Environmental Protection, John Quigley held its first meeting. In his opening remarks, Secretary Quigley explained:

“We are in the midst of a wave of energy development that is unlike any other in the state’s history. The Marcellus shale and shale gas resources generally – including the upcoming Utica play – presents an immense economic opportunity for the commonwealth. Governor Wolf wants this industry to succeed and recognizes that the infrastructure challenge is a major one and we need to work together to find the win-win opportunities to connect these wells to markets.”

The PITF consists of 48 member representatives from local, state and federal government, the Pennsylvania legislature, industry (including pipeline companies and gas producers), environmental protection and natural gas end users. Interestingly but perhaps not surprisingly, less than one third of the representatives are from industry. The PITF includes twelve workgroups that will present recommendations to the task force on subjects such as agriculture, natural resource protection, workforce and economic development, emergency preparedness and end-users of natural gas products. The PITF will deliver a report of best practices for pipeline development to Governor Wolf by February 2016.

While energy companies are eager to build pipelines, some view potential pipeline development as an opportunity to thwart natural gas (hydrocarbon energy) development. A Lancaster County woman has been found guilty of disorderly conduct for speaking out of turn at a public meeting at Conestoga Township in April to voice her opposition to the Atlantic Sunrise interstate gas pipeline. Maya Van Rossum with the Delaware Riverkeeper Network (a frequent appellant of permits issued to gas drillers in PA) told State Impact Pennsylvania in its April 2, 2015 piece entitled “Pipelines: The new battleground over fracking:” “The pipelines are being built in order to induce more drilling and fracking. And of course more drilling and fracking results in the need for more pipelines. So the two are inextricably intertwined and if you oppose one, truthfully, you have to oppose the other.”

Whether the PITF will help facilitate responsible, timely development of pipeline infrastructure to help move gas from the Marcellus and Utica plays (as suggested by Secretary Quigley) or simply provide a forum for opponents to voice their concerns about pipeline development may become evident over the next several months. Regardless of the recommendations of the PITF, energy producers will continue to press for the development of pipeline infrastructure to move gas to markets, environmentalists will oppose and appeal permits and Pennsylvania will be host to many of these battles.

Stephen Smith focuses his practice on environmental and energy-related matters including regulatory counseling and litigation, administrative law, governmental affairs and lobbying. He represents clients before federal and state courts and administrative agencies. He provides client counseling and advice on compliance, permitting and agency communications as well as business transactions.
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