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Public resistance and high costs are canceling pipelines across the country

Andrew Maykuth, The Philadelphia Inquirer on

Published in Business News

Not long ago, builders of fossil fuel pipelines in the U.S. followed a standard pattern: The operator made a business case for the project, lining up committed shippers, customers, and investors. Regulators obliged by granting a certificate of public need, which includes the power to acquire easements from property owners even if they object.

But building a pipeline these days has become increasingly more challenging and expensive, as aggrieved property owners and climate activists have joined to rally political opposition to energy infrastructure projects as never before, and have scored a series of major legal victories.

A federal judge in Washington last week ordered Energy Transfer LP to shut down the Dakota Access Pipeline, which carries crude oil from North Dakota shale fields, while the U.S. Army Corps of Engineers conducts a formal environmental impact analysis that it previously passed on. The shutdown, if upheld, could lead to the permanent closure of the $3.8 billion project if it cannot resolve risks of oil spills.

Dominion Energy Inc. also announced last week it was divesting ownership of all gas pipeline and storage assets, and would cancel its Atlantic Coast Pipeline, a project that would deliver natural gas from Marcellus Shale gas fields to Virginia and the Carolinas. Chief Executive Officer Thomas Farrell explained the exit, saying that building gas infrastructure is "increasingly litigious, uncertain, and costly."

Williams Cos. Inc. this year canceled the Constitution Pipeline that would have delivered Pennsylvania gas into New York state after New York denied water permits, forcing Williams to settle with Pennsylvania landowners whose property it had already taken and cleared.

And New Jersey last week suspended permits for New Jersey Natural Gas' Southern Reliability Link after a drilling accident damaged a Monmouth County home.

 

And then there is the Mariner East system, a state-regulated project to transport gas liquids like propane and ethane across Pennsylvania, through densely populated parts of Chester and Delaware Counties, to an export terminal in Marcus Hook, south of Philadelphia. The project, which Energy Transfer LP took over with its 2012 acquisition of Sunoco Inc., has repeatedly been fined for environmental violations, been forced to suspend construction while it changed construction methods, and remains the target of legal actions even as it approaches completion, now set for early 2021.

Environmental advocates believe that after years of litigation and activism, the pendulum is swinging in their favor.

"The public discourse around pipelines, around climate change, is starting to break through the din, break through to the justices," said Maya K. van Rossum, the head of the Delaware Riverkeeper Network. "And that is the reason why we're seeing some better decisions, some stronger decisions."

Industry advocates fear the backlash will impede vital projects that keep energy supplies reliable and costs low, and will impair energy development in Pennsylvania, which became the nation's second-largest gas producer in the last decade after the adoption of hydraulic fracturing extraction methods.

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