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2017-05-12 / Front Page

Powering forward

Pipeline projects continue path to completion across Marcellus and Utica plays
By Spencer Myers

courtesy of UGI Sunbury courtesy of UGI Sunbury The natural gas industry in the Marcellus region has reached a point where there are dozens of major pipeline projects in the works at any one time. Some span across the region, bringing the gas to smaller systems and eventually to homes and power plants. Some stretch outward from the region to provide domestic energy to other states and to terminals on the coast for export.

One of the most recent completions in the Marcellus region is the Sunbury pipeline, a 35-mile interstate transmission pipeline. The pipeline was built to provide fuel for both UGI Central Penn Gas, a local distribution company and the Panda Hummel Station, a gas-fired power plant which is scheduled to come online in 2018.

Having less luck is the Constitution pipeline. The 121-mile project remains blocked by last year’s decision by the New York State Department of Environmental Conservation. Despite the decision, the project sponsors remain adamant about the necessity of its construction and are not ready to scrap the plan.

All projects besides the Laurel pipeline are proposed and have yet to begin construction. All projects besides the Laurel pipeline are proposed and have yet to begin construction. All told, the proposed projects represent a growing export market, billions of dollars of investments from American energy companies, thousands of temporary, well-paying jobs and lower heating and electricity bills for nearby commercial and residential buildings.

Atlantic Sunrise

Having received Federal Energy Regulatory Commission approval for the project, Williams Partners plans to begin construction on the pipeline in 2017.

In total, the project is planned to add approximately 183 miles of new greenfield pipe (Central Penn North & Central Penn South), two pipeline loops totaling about 12 miles (Chapman Loop, Unity Loop), two and half miles of existing pipeline replacement, two new compressor facilities in Pennsylvania and other facility additions or modifications in five states (Pennsylvania, Maryland, Virginia, North Carolina, South Carolina).

The Atlantic Sunrise Pipeline is planned to have a capacity of 1.7 billion cubic feet per day, which represents enough natural gas to serve approximately 7 million homes.

The project is scheduled to be finished in 2018.

“Williams’ Atlantic Sunrise pipeline project is a nearly $3 billion investment that will encourage continued production of natural gas in the shale regions and investment in manufacturing throughout Pennsylvania. Infrastructure like this is needed to strengthen our energy portfolio, which also includes coal, nuclear and renewables. This project is among the largest private investments of capital ever made in this state and will support thousands of family-sustaining jobs during construction – many of them in blue- collar trade and manufacturing sectors — and hundreds of long-term jobs once operational,” said Gene Barr, president and CEO of the Pennsylvania Chamber of Business and Industry, in a statement.

Atlantic Coast

This massive 550-mile pipeline will stretch from Northern West Virginia to Southern North Carolina.

According to the project website, if the pipeline is constructed it will save residents in the area $377 million annually on their utility bills and will provide around the clock back-up power to the region’s solar plants, wind farms and other renewable energy sources.

The daily savings on utility bills are overshadowed however by a quick calculation using the social cost of carbon, which assigns a dollar amount to the economic side effects of carbon pollution. According to an interagency working group formed by then President Obama in 2013, the cost comes out to approximately $37 per metric ton of carbon. The proposed pipeline will have a capacity of 1.5 Bcf/day. Using the U.S. Energy Information Administration’s carbon dioxide coefficients, it can be determined that burning all 1.5 billion cubic feet of natural gas in one day would result in 79,673 metric tons of carbon dioxide per day. Based on the last estimate of the social cost of carbon, this pipeline could cost its citizens up to roughly $2.9 million a day in greenhouse gas effects. The social cost of carbon is a rough estimate but is a useful frame of reference for all of the following projects.

The capacity of 1.5 bcf/day will require three compressor stations. Additionally, the $5 billion pipeline will be open access for producers and the market ,allowing larger customers to tap into the natural gas along the route. Its potential customers include: Duke Energy, Piedmont Natural Gas, Virginia Services Energy, AGL Resources and PSNC Energy.

The project has procured almost 85 percent of the land, materials and services needed, according to a statement from President and CEO of Dominion Energy Diane Leopold.

“To date, we’ve completed production on more than 65 percent of the steel pipe we will use to build the project, and we expect to complete production later this year. As you may remember, this pipe is being 100% fabricated in the United States, putting hundreds of people to work,” she said.

“The next step is for the FERC to release a final Environmental Impact Statement on June 30. We have every reason to believe the favorable draft EIS and – ultimately – the final EIS will provide a strong foundation for final approval of the project later this summer or in the early fall,” she said.

Laurel Pipeline

Unlike the other projects listed, the Laurel Pipeline is an existing system that may undergo a flow reversal. Also, unlike the other projects is the fact that the Laurel Pipeline transports gasoline.

The project flows from Philadelphia to Pittsburgh and crosses Altoona along the way. The Laurel Pipeline Co. and its general partner, Buckeye Partners, a Houston- based midstream developer with a branch in Breinigsville, are putting forth a plan to reverse the system from Pittsburgh to Altoona, making the Central Pennsylvania city a hub for both Philadelphia and Midwest refineries.

According to Buckeye, this opens up Pennsylvania to the Midwest oil market, which has more refining capacity and generally cheaper gas prices.

When the crude oil export ban was lifted in 2015, crude deliveries by rail to Philadelphia became less frequent  causing them to ship less product to the Pittsburgh region, according to Bill Hollis, senior vice president at Buckeye Partners.

“A lot people have asked us, ‘why now?’ it actually has a lot to do with the fact that the oil from refineries in Philadelphia is imported.

“The east coast capacity has dropped 350,000 barrels a day in the last ten years while the midwest has grown in a similar amount. So the relative price of Midwest gasoline has moved seven cents lower relative to east coast supplied gasoline over that same time period. We see that trend continuing because the lowest cost of crude and the most sophisticated refineries are in the midwest. We see this as giving western Pennsylvania access to the lowest cost gasoline and diesel fuel and increasing the overall supply of gasoline in the state,” Hollis said.

However, many in the Pittsburgh area fear that the reversal would cut off the region from eastern Pennsylvania markets, give the Midwest a monopoly and drive prices up.

According to the Altoona Mirror, this fear has led to Altoona-based Sheetz Inc. submitting a protest to the proposed reversal along with other gas stations including Giant Eagle, Sunoco and Gulf.

Mountain Valley

The Mountain Valley system has seen stiff opposition landowners in both West Virginia and Virginia and most recently saw its final environmental impact study (EIS) from FERC pushed back to the end of June.

The revised approval schedule will not push back the project’s target in-service date of late 2018.

As proposed, the project would stretch 301 miles from northwestern West Virginia to southern Virginia and would be constructed and owned by a joint venture of EQT Midstream Partners, LP; NextEra US Gas Assets, LLC; Con Edison Gas Midstream, LLC ; WGL Midstream; Vega Midstream MVP LLC; and RGC Midstream, LLC.

Penn East Pipeline

The proposed Penn East Pipeline Project will be approximately 118 miles and will originate in Dallas, Pa. and end at Transco’s pipeline interconnection near Pennington, N.J. The project includes a single compressor station, proposed in Kidder Township, Pa.

Having now received a positive final EIS from FERC, the Penn East Pipeline is primarily snagged on meeting the standards set by the New Jersey Department of Environmental Protection (NJDEP) and local opposition from the Delaware Riverkeepers Network.

Penn East issued the following in response to the NJDEP’s review of the project:

“PennEast thanks the New Jersey Department of Environmental Protection for thoroughly reviewing the permit application from an administrative completeness perspective,” said Pat Kornick, PennEast spokesperson. “As evidenced by the few outstanding items, which PennEast is working to address, PennEast believes it is a strong application that is substantially complete. PennEast will continue to work with NJDEP to address the issues noted by the Department to ensure that PennEast is working within the rules established by the federal government for interstate pipeline infrastructure projects. PennEast’s goal has always been to deliver lower cost, clean energy that will power homes and the businesses in the region for decades to come. Today’s actions are another step in that multi-year approval process.”

Utopia East

The 240-mile Utopia pipeline will transport previously refined or fractionated natural gas liquids, including ethane and ethane-propane mixtures into Canada by way of Ohio and Michigan.

According to a release from the company, the pipeline system will have an initial capacity of 50,000 bpd with the construction of two pump stations, but its capacity can be expanded to more than 75,000 bpd if more stations are built.

Having received its Water Quality Certification in February, the project is slated to start construction very soon and expects to be fully in service by January 2018.

According to the Mansfield News Journal, about 95 percent of the land has been acquired or is in the final stages. .

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