In split votes on Thursday FERC approved a project proposed by Transcontinental Gas Pipe Line Co. LLC (Transco) to open up more capacity to meet rising natural gas demand in the Southeast and a Natural Gas Pipeline Company of America LLC (NGPL) request to build a gas pipeline in the Permian Basin of West Texas that would connect directly to the Waha hub.
But, as they have with increasing frequency, commissioners Richard Glick and Bernard McNamee clashed over the Federal Energy Regulatory Commission’s approach to potential greenhouse gas emissions.
FERC’s order for the NGPL Lockridge Pipeline project “doesn’t even mention the word ‘climate change,'” Glick said. “It doesn’t even talk about climate change at all, and it’s clearly inconsistent with what the courts have been telling us.” He said the U.S. Court of Appeals for the District of Columbia Circuit had “on several occasions told us that we need to take the pipeline projects’ impact on climate change into account in determining whether a project is in the public interest to qualify for a certificate of public convenience and necessity. But, again, we’re not doing that.”
“The Glick-McNamee show continues,” McNamee said in response. “…Needless to say that we’ve complied with our requirements both under the Natural Gas Act and under NEPA [National Environmental Policy Act] to ensure that we’re considering all the issues and applying the laws properly.”
FERC approved by a consent vote with Glick dissenting NGPL’s proposal for the Lockridge Extension Pipeline, which would traverse Ward, Reeves and Pecos counties in Texas and provide up to 500,000 Dth/d of firm transportation capacity southbound along its existing Lockridge Pipeline to a new bidirectional interconnect with Trans-Pecos Pipeline LLC at Waha [CP19-52].
NGPL proposes to provide long-term firm transportation service to two shippers: Lucid Energy Delaware LLC (460,000 Dth/d) and EOG Resources Inc. (40,000 Dth/d). The project’s cost is estimated at about $51.6 million.
It calls for constructing 16.84 miles of 30-inch diameter pipeline and associated infrastructure plus a bidirectional interconnect in Pecos County, which would include two 10-inch diameter ultrasonic meter runs and a 30-inch diameter tap. About 91% of the proposed pipeline extension would be parallel and adjacent to existing utility rights-of-way.
The company plans to begin construction in March and anticipates placing the extension into service in 4Q2020.
FERC also approved Transco’s proposal to construct, operate and modify pipeline, compression, and auxiliary facilities proposed for its Southeastern Trail Project, which is designed to meet rising natural gas demand in Virginia, North Carolina, South Carolina and Georgia [CP18-186].
The project would create 296,375 Dth/d of additional firm transportation capacity on Transco, according to the April 2018 application. At that time, Transco said precedent agreements with utility and local distribution companies had been executed in all four states, with plans to have the expansion done in time for the 2020-2021 winter heating season.
Southeastern Trail would include 7.7 miles of 42-inch diameter pipeline looping facilities in Virginia, horsepower additions at existing compressor stations in the state, and piping and valve modifications on other existing facilities in South Carolina, Georgia and Louisiana to allow for bi-directional flow.
The project is expected to cost $404.8 million. Williams is targeting a Nov. 1, 2020 in-service date.
FERC’s order approves, among other things, Transco’s proposal to design its recourse rates using the approved pre-tax rate of return from its most recent general Natural Gas Act section 4 rate case, in which a return was specified, adjusted for the current 21% corporate tax rate.
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