© Reuters.
The United States is facing an imminent energy crisis due to resistance against infrastructure development and pipeline capacity constraints, warned Toby Rice, CEO of EQT Corporation (NYSE:), on Sunday. The concerns come as a record low build out of interstate pipelines was marked last year, with capacity down to 897 million cubic feet per day from 28 billion in 2017.
The Mountain Valley Pipeline (MVP), a project initially expected to be completed in 2018 at a cost of $3.5 billion, now faces a delayed start until next year, with costs escalating to $7.2 billion. MVP co-owner Equitrans Midstream (NYSE:) cited workforce issues and court-related construction halts as reasons for the delay.
Despite Congress passing a law to fast-track MVP’s construction, following intervention from Senator Joe Manchin, broader attempts at streamlining the permitting process have repeatedly failed. Four pipelines connecting EQT’s shale gasfields to the US east coast have been cancelled since 2016, while other pipelines in the north-east have expanded their capacity.
Rice drew parallels between the potential US energy crisis and Europe’s post-Ukraine invasion situation due to stalled infrastructure development. He emphasized the severity of the situation by citing instances of New England cities importing liquefied natural gas during winter freezes.
Pipeline company Williams also faced challenges when former New York Governor Andrew Cuomo’s administration denied water quality permits for its $1 billion Constitution pipeline despite federal approval. CEO Alan Armstrong criticized this as an example of permitting misuse in Democratic states.
Opposition from environmental groups such as the Sierra Club has been a significant factor in these developments. They argue that projects like MVP risk properties and sensitive ecosystems while prolonging the fossil fuel industry’s lifespan, thereby exacerbating climate change.
Consultancy firm Wood Mackenzie warned that failure to build new pipelines could lead to inflated gas prices, decreased demand, and hasten the energy transition away from gas. This could result in a significant downgrade in north-east gas production. Last winter, pipeline capacity constraints led to soaring gas prices in Boston due to limited gas flows from Appalachia into New England.
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