US natural gas pipeline developers facing challenging future

Houston (Platts)--22 Mar 2016 706 pm EDT/2306 GMT

Developers of US pipeline projects face a host of challenges, many more than in past years, in getting their projects certified and built, Don Santa, the president of the Interstate Natural Gas Association of America said Tuesday.

The pipeline certificate process, by which the Federal Energy Regulatory Commission approves new interstate pipelines "is under a lot of pressure," both in the form of legal challenges and from activists who show up at FERC meetings to protest the proceedings, Santa said at the annual Pipeline Opportunity Conference, presented by the Pipeline & Gas Journal.

"Activist groups have become very active in these certificate proceedings, in part to set them up to them for an appeal in the courts," he said.

"What they're looking for is some chink in the armor, somewhere where the commission did not cross the 'T' or did not dot the 'I' or did not establish an adequate basis to overturn the orders," Santa said.

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In addition, there has been an increase in public protests against pipeline projects, both along the right-of-way for the proposed pipelines and during hearings at FERC headquarters in Washington, he said.

"Its kind of become like a game of Whack-a-Mole," Santa said. "One protester stands up and makes a statement. They get escorted out and the commission hearing proceeds for another five minutes, then the next one stands up, and on and on."


On the sidelines of the conference, Santa praised FERC Chairman Norman Bay for the way in which he has handled such disruptions by protesters.

"He's been very strong about defending the integrity of the commission process," Santa said. "People obviously have a free speech right and the ability to protest to make their views known, but there are channels through which to do that at the commission."

The number of challenges to the pipeline certificate has "affected the pace of pipeline approvals," raising issues that FERC staff need to address in order to ensure that once the orders are issued they are able to stand up on appeal, he said.

"That also has created challenges for the pipeline companies to up their game," he said. "These projects are not being proposed unless there is a need for them, and clearly there is a need to get the shale abundance to the market."

Recent disasters involving energy infrastructure, such as the fatal explosion of a natural gas pipeline in San Bruno, California, in 2010, and the more recent methane leak at the Aliso Canyon natural gas storage facility, have increased public awareness of the potential hazards surrounding the construction of new infrastructure projects.

"I think the industry and the regulators are under a lot more scrutiny, but by the same token I think we have a very good record on safety," Santa said. "There's a commitment to zero incidents and I think we're doing what we can to get that next increment."

Santa also pointed to election-year rhetoric as a cause for concern for pipeline developers. Both Democratic candidates, Hillary Clinton and Senator Bernie Sanders, have expressed some degree of opposition to hydraulic fracturing, which has underpinned the shale revolution in recent years.


Republican presidential candidates, although widely considered as being friendlier to the energy industry than the Democrats, have been largely silent on energy issues, Santa said.

However, despite the role that energy and climate issues are playing in the presidential campaign, "there are defenders of the industry, and of the importance of these facilities, in Congress," he said.

Despite the political rhetoric, most of the nation's leaders recognize the role that the production and transportation of gas plays in accomplishing significant national economic and environmental goals, he said.

"The delivery of this energy, of this natural gas, is important to those goals, whether it be for the economy -- providing the benefit of affordable energy -- or whether it's backing out the use of less benign fossil fuels with natural gas," he said.

"For that matter, if you look at renewables, given the fact that a lot of renewables are intermittent, it's gas fired-generators that are firming them up."

Pipeline industry leaders are beginning to recognize, and push back against, the social and political challenges they face, Santa said.

"What you're seeing on the part of the industry is the recognition that on these projects, they have got to address these issues from Day 1," he said. "You're seeing the pipeline operators do that with the recognition that this has got to be approached like a political campaign."

--Jim Magill,
--Edited by Richard Rubin,

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