Politics hamper new gas pipeline permitting, API official says

US Senate passage of a broad bipartisan energy with language to expedite federal approvals of LNG export projects was a significant step, an American Petroleum Institute official said (OGJ Online, Apr. 20, 2016). But states also need to help remove politics from what should be a straightforward process for gas pipelines as well as LNG export installations, API Executive Vice-Pres. Louis Finkel maintained.

“For the first time since the American energy revolution took hold, the House and Senate have passed bipartisan, comprehensive energy legislation,” he told reporters Apr. 21. “Now is the time to build our energy infrastructure, expand exports, and lock in the economic and geopolitical opportunities that our energy revolution has created.”

Finkel said a concerted effort to improve US energy infrastructure, adding that New England consumers paid 53% more for electricity in 2015 than the rest of the country because gas pipeline capacity into the region to generate power is insufficient.

His remarks came a day after Kinder Morgan Inc. and its Tennessee Gas Pipeline Co. subsidiary announced they were cancelling the proposed Northeast Energy Direct gas pipeline project because they were not able to get enough commitments from potential customers (OGJ Online, Apr. 21, 2016).

KMI cited several factors in its Apr. 20 announcement, including “the fact that the New England states have not yet established regulatory procedures to facilitate binding [electric distribution company] commitments, that the process in each state for establishing such procedures is open-ended, and that the ultimate success of those processes is not assured.”

When asked about KMI’s move, Finkel said, “Clearly, companies have to make their own capital investment decisions, but when the permitting process at the state and federal levels insert politics over policy, the idea that the resource should be kept in the ground is being followed more than consumers’ interests, particularly when they have to pay so much more for electricity than the rest of the country.”

Finkel said the US needs to get out from under destructive energy politics at both the state and federal level. “By expediting the federal process, it will send a strong signal to the states that these projects need to move ahead,” he said.

Contact Nick Snow at nicks@pennwell.com.

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