Newly elected President Donald Trump has made an immediate and positive impact on the oil and gas pipeline industry. Shortly after his inauguration, the president revitalized the development of the Keystone XL and Dakota Access Pipeline projects.
On Jan. 24, the president signed an executive order that invited TransCanada to once again apply for a Presidential Permit and mandated the project receive expedited treatment. On the same day, he signed another executive order calling for the Army Corps of Engineers to revisit the easement Energy Transfer needed to complete its project.
Since then, TransCanada has received its Presidential Permit for Keystone XL, and Energy Transfer has begun filling the Dakota Access Pipeline with oil.
However, there is one area that Trump’s actions — or inactions — are handcuffing pipeline development. The Federal Energy Regulatory
Committee (FERC) is short the number of commissioners needed for approving projects.
Like Trump, FERC moved quickly in the first few weeks of 2017 and approved seven pipeline projects that account for more than 1,500 miles
of natural gas pipeline construction and expansion that will add more than 7 billion cubic feet per day (Bcf/d) of capacity.
Production growth in the Marcellus and Utica shale plays in the Northeast are driving this pipeline development, with the $4.2 billion Rover Pipeline and $2.6 billion Atlantic Sunrise expansion project among those FERC certified.
Rover will move natural gas out of the Utica shale play, with direct deliveries in Ohio, West Virginia, Michigan and Ontario, Canada, and will reach a capacity of 3.3 Bcf/d. Construction began in the first quarter of 2017.
The Atlantic Sunrise Pipeline will move natural gas out of the Marcellus shale play to markets in the mid-Atlantic and southeastern states, adding 1.7 Bcf/d of pipeline capacity. Construction will begin in mid-2017.
Other projects FERC recently approved include the Orion Project, Transco to Charleston Project, Rayne and Leach Xpress, Northern Access and Northern Lights 2017 Expansion.
However, since the January resignation of commissioner Norman Bay, FERC lost its quorum and all project approvals have been halted.
As of Feb. 23, there were 33 projects that had FERC applications in process, and 20 projects had submitted FERC pre-filings, according to the Energy Information Administration (EIA). Consideration of these projects, among others, will be deferred until FERC has at least the three commissioners required to constitute a quorum. According to some reports, these projects awaiting FERC approval account more than 10 Bcf/d in capacity and a total cost of more than $16.5 billion.
Currently, there are no appointees nominated to fill the three vacant commissioner seats, and it could take as many as two months to approve a new commissioner, pushing additional FERC approvals to at least the end of May. In the meantime, more projects are likely to be added to the backlog.
President Trump must act quickly to nominate new commissioners and allow FERC a quorum to move these critical pipeline projects forward.