Permit Reform Holds Promise for US Gas

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The US has its best shot in years at securing durable reforms to oil and gas pipelines permitting potentially unlocking additional US gas production. The federal approval process for oil and gas pipelines and other major energy projects has long been a sticking point in the US. Authorizing large pipelines is a time-consuming, unpredictable process that involves multiple federal agencies and decisions that are often vulnerable to lengthy delays from environmental lawsuits. Permitting reform legislation was the string attached to US Sen. Joe Manchin’s support for the pending $369 billion climate-focused Inflation Reduction Act, but politically there are still question marks. If permitting reform squeaks by in the US Senate this fall it could help to clear natural gas bottlenecks in the Northeast and the Permian. The reforms also could help insulate pipeline developers to some extent against costly green litigation. Energy Transfer’s 570,000 barrel per day Dakota Access Pipeline, for example, a main artery for shipping crude from the North Dakota Bakken tight oil play to US Gulf Coast refining markets, faced a protracted legal battle to avoid shutdown after a 2020 ruling that the federal government failed to adequately assess spill risks. Developers of the PennEast pipeline that would have added 1.1 billion cubic feet per day of natural gas capacity in the constrained Northeast halted development last year even after winning a US Supreme Court battle because the project would have struggled to gain state-level permits.

Policy and Regulation, Gas Pipelines, Gas Supply
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