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Friday, October 14, 2022

Appalachia may be left out of soon-to-rise exports of natural gas; industry sources blame difficult pipeline permitting

Despite projections for growth in U.S. natural-gas exports, investments in gas production may shift away from Appalachia, Joseph Markham reports for Yahoo!Finance. A tough regulatory environment in northeastern states has made it hard for gas companies to build pipelines to transport gas from the Marcellus and Utica Shale formations — one of the nation's largest gas reserves, which lies beneath much of West Virginia, Pennsylvania and southern New York.

Investment capital is headed "down to the Gulf Coast," Kevin Little, senior vice president for natural gas at Macquarie Energy at a natural gas conference held by Hart Energy. As demand for gas is rising in Europe, due to Russia's invasion of Ukraine, there are expectations for growth in the U.S. gas industry, especially in Texas, Louisiana and the Midcontinent region, Little said.

After a couple years of pipeline construction in the northeast, many states, like New York and New Jersey began to push back and deny certification for pipelines, Markham reports. Lawsuits over proposed pipeline projects traveled to the Supreme Court, and Sen. Joe Manchin of West Virginia has struggled to pass legislation allowing for the completion of the controversial Mountain Valley Pipeline, which would pass through his state and Virginia.

"If you have to get an act of Congress to get your permits to build a pipeline, if you’ve got to go to the Supreme Court and you still can’t build a pipeline, this is not a great environment to build midstream infrastructure," Little said. "And so, you’ve not seeing a whole lot of new pipelines proposed."

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