Proposed, under construction, abandoned: 6 key US pipeline projects

Growing demand and tightening environmental regulations make for a mixed outlook for the oil and gas industry.

It’s a complicated time to build a new oil or gas pipeline in the U.S. While the fossil fuel industry continues to see healthy demand and profits amid skyrocketing gasoline prices and war in Ukraine, construction costs are rising and stricter environmental regulations are on the horizon as pressure to transition to renewable energy grows.

Two widely publicized pipeline projects illustrate this trend. Last year, Calgary, Alberta-based Enbridge completed its 1,097-mile-long Line 3 replacement, which carries oil from Edmonton, Alberta to Superior, Wisconsin. 

However, competitor Calgary, Alberta-based TC Energy’s 1,200-mile-long Keystone XL project, which would have stretched from Steele City, Nebraska, to Hardisty, Alberta, was canceled in June 2021 after President Joe Biden denied it a key permit on his first day in office. The project had become the focus of a fierce environmental and public health fight.

Pressures in both directions

The U.S. is the world’s largest natural gas producer, but its output is slumping even while global demand rises after gas-producing Russia invaded Ukraine, according to Reuters. Despite prices near 14-year highs, the country’s main producers — the Appalachian region and West Texas — are seeing growth slow, which companies blame on lack of adequate pipeline capacity. 

An increasing focus on climate change and the transition to renewable energy is putting downward pressure on the country’s pipeline industry, according to Westwood Global Energy Group, an energy market research firm. The numbers bear this out: In North America in 2022 there are 4,044 miles of pipeline under construction with another 17,841 miles planned, an Underground Construction analysis found, an expected 13.4% decline from last year.

The Federal Energy Regulatory Commission, the agency that provides key permits for pipeline projects, in February proposed an update to its guidelines that would consider projects’ impact on the environment — a dramatic shift from its previous policy. However, FERC backtracked a month later following an outcry from fossil fuel groups, and voted to recategorize the new policies as drafts that will only apply to future projects. 

The typically under-the-radar regulator continues to be a lightning rod in the fight between environmentalists and industry groups, according to the Washington Post.

Amid these boons and headwinds, here are the statuses of six key pipeline projects across the U.S.

source : https://www.constructiondive.com/news/proposed-under-construction-abandoned-6-key-us-pipeline-projects/625756/