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Pipeline Regulations & Impact Assessments, a Primer

Part of the Falcon Public EIA Project

Pipelines are categorized by what they carry — natural gas, oil, or natural gas liquids (NGLs) — and where they go — interstate or intrastate. The regulatory system is complicated. This primer is a quick guide to the agencies that may be involved in Falcon’s permit reviews.

Regulating Pipelines

The siting of natural gas pipelines crossing state or country boundaries is regulated by the Federal Energy Regulatory Commission (FERC). Meanwhile, determination of the location of natural gas routes that do not cross such boundaries are not jurisdictional to FERC, instead determined by the owner pipeline company. Hazardous liquids and NGL pipelines are not regulated for siting by FERC regardless of their location and destination. However, FERC does have authority over determining rates and terms of service in these cases. The U.S. Army Corps of Engineers gets involved when pipelines cross navigable waters such as large rivers and state Environmental Protection Agencies.

Pipeline design, operation, and safety regulations are established by the Pipeline and Hazardous Materials Safety Administration (PHMSA), but these regulations may vary state-by-state as long as minimal federal standards are met by the pipeline project. Notably, PHMSA’s oversight of safety issues does not determine where a pipeline is constructed as this is regulated by the different agencies mentioned above – nor are PHMSA’s safety considerations reviewed simultaneously in siting determinations done by other agencies.

An excerpt from the U.S. Army Corps’ EIS of the Atlantic Sunrise pipeline

These federal agencies are required by the National Environmental Policy Act (NEPA) to prepare an Environmental Impact Statement (EIS) investigating how the pipeline pertains to things like the Clean Water Act, the Endangered Species Act, the National Historic Preservation Act, as well as state and local laws. The image above, for instance, is a caption from the Army Corp’s assessment of the Atlantic Sunrise, a natural gas pipeline.

An EIS is based on surveying and background research conducted by the company proposing the project, then submitted to agencies as an Environmental Impact Assessment (EIA). An EIS can exceed hundreds of pages and can go through many drafts as companies are asked to refine their EIA in order to qualify for approval.

An excerpt from the PA DEP’s review of water crossings for the Mariner East 2 pipeline

Pipeline proposals are also evaluated by state and local agencies. In Pennsylvania, for instance, the PA DEP is responsible for assessing how to minimize pipeline impacts. The DEP’s mission is to protect Pennsylvania’s air, land and water from pollution and to provide for the health and safety of its citizens through a cleaner environment. The PA Fish and Boat Commission oversees the avoidance or relocation of protected species. Local township zoning codes can also apply, such as to where facilities are sited near zoned residential areas or drinking reservoirs, but these can be overruled by decisions made at the federal level, especially when eminent domain is granted to the project.

Regulating the Falcon

For the Falcon pipeline, an interstate pipeline that will transport ethane (an NGL), FERC will likely have authority over determining rates and terms of service, but not siting. Construction permitting will be left state agencies and PHMSA will retain its federal authority with the Pennsylvania Public Utilities Commission (PUC) acting as PHMSA’s state agent to ensure the project complies with federal safety standards and to investigate violations. The Army Corps will almost certainly be involved given that the Falcon will cross the Ohio River. As far as we know, the Falcon will not have eminent domain status because it supplies a private facility and, thus, does not qualify as a public utility project.

Questioning Impact Assessments

The contents of EIAs vary, but are generally organized along the lines of the thematic categories that we have created for assessing the Falcon data, as seen above. However, there is also much that EISs fail to adequately address. The Army Corp’s assessment of the Atlantic Sunrise is a good example. The final EIS resulting from the operators EIA includes considerations for socioeconomic impacts, such effects on employment and environmental justice, as seen in the excerpt below. But potential negative impact in these areas are not necessarily linked to laws requiring special accommodations. For instance, federal regulations mandate achieving environmental justice by “identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects” of projects subject to NEPA’s EIS requirement. However, there are no laws that outline thresholds of unacceptable impact that would disallow a project to proceed.

An excerpt from the Atlantic Sunrise EIS addressing environmental justice concerns

Furthermore, the narratives of EIAs are almost always written by the companies proposing the project, using sources of data that better support their claims of minimal or positive impact. This is again seen in the Atlantic Sunrise EIS, where several studies are cited on how pipelines have no affect on property values or mortgages, with no mention of other studies that contradict such findings. Other factors that may be important when considering pipeline projects, such as concerns for sustainability, climate change, or a community’s social well-being, are noticeably absent.

Complicating matters, some pipeline operators have been successful in skirting comprehensive EIAs. This was seen in the case of the Mariner East 2 pipeline. Despite being the largest pipeline project in Pennsylvania’s history, a NEPA review was never conducted for ME2.

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Related Articles

By Kirk Jalbert, FracTracker Alliance

Proposed Atlantic Coast Pipeline route

An urgent need? Atlantic Coast Pipeline Discussion and Map

By Karen Edelstein, Eastern Program Coordinator

This article was originally posted on 10 July 2015, and then updated on 22 January 2016 and 16 February 2016.

Proposed Pipeline to Funnel Marcellus Gas South

In early fall 2014, Dominion Energy proposed a $5 billion pipeline project, designed provide “clean-burning gas supplies to growing markets in Virginia and North Carolina.” Originally named the “Southeast Reliability Project,” the proposed pipeline would have a 42-inch diameter in West Virginia and Virginia. It would narrow to 36 inches in North Carolina, and narrow again to 20 inches in the portion that would extend to the coast at Hampton Roads. Moving 1.5 billion cubic feet per day of gas, with a maximum allowable operating pressure of 1440 psig (pounds per square inch gage), the pipeline would be designed for larger customers (such as manufacturers and power generators) or local gas distributors supplying homes and businesses to tap into the pipeline along the route, making the pipeline a prime mover for development along its path.

The project was renamed the Atlantic Coast Pipeline (ACP) when a coalition of four major US energy companies—Dominion (45% ownership), Duke Energy (40%), Piedmont Natural Gas (15%), and AGL Resources (5%)— proposed a joint venture in building and co-owning the pipeline. Since then, over 100 energy companies, economic developers, labor unions, manufacturers, and civic groups have joined the new Energy Sure Coalition, supporting the ACP. The coalition asserts that the pipeline is essential because the demand for fuel for power generation is predicted more than triple over the next 20 years. Their website touts the pipeline as a “Path to Cleaner Energy,” and suggests that the project will generate significant tax revenue for Virginia, North Carolina, and West Virginia.

Map of Proposed Atlantic Coast Pipeline


View map fullscreen – including legend and measurement tools.

Development Background

Lew Ebert, president of the North Carolina Chamber of Commerce, optimistically commented:

Having the ability to bring low-cost, affordable, predictable energy to a part of the state that’s desperately in need of it is a big deal. The opportunity to bring a new kind of energy to a part of the state that has really struggled over decades is a real economic plus.

Unlike older pipelines, which were designed to move oil and gas from the Gulf Coast refineries northward to meet energy demands there, the Atlantic Coast Pipeline would tap the Marcellus Shale Formation in Ohio, West Virginia and Pennsylvania and send it south to fuel power generation stations and residential customers. Dominion characterizes the need for natural gas in these parts of the country as “urgent,” and that there is no better supplier than these “four homegrown companies” that have been economic forces in the state for many years.

In addition to the 550 miles of proposed pipeline for this project, three compressor stations are also planned. One would be at the beginning of the pipeline in West Virginia, a second midway in County Virginia, and the third near the Virginia-North Carolina state line.  The compressor stations are located along the proposed pipeline, adjacent to the Transcontinental Pipeline, which stretches more than 1,800 miles from Pennsylvania and the New York City Area to locations along the Gulf of Mexico, as far south as Brownsville, TX.

In mid-May 2015, in order to avoid requesting Congressional approval to locate the pipeline over National Park Service lands, Dominion proposed rerouting two sections of the pipeline, combining the impact zones on both the Blue Ridge Parkway and the Appalachian Trail into a single location along the border of Nelson and Augusta Counties, VA. National Forest Service land does not require as strict of approvals as would construction on National Park Service lands. Dominion noted that over 80% of the pipeline route has already been surveyed.

Opposition to the Pipeline on Many Fronts

The path of the proposed pipeline crosses topography that is well known for its karst geology feature—underground caverns that are continuous with groundwater supplies. Environmentalists have been vocal in their concern that were part of the pipeline to rupture, groundwater contamination, along with impacts to wildlife could be extensive. In Nelson County, VA, alone, 70% of the property owners in the path of the proposed pipeline have refused Dominion access for survey, asserting that Dominion has been unresponsive to their concerns about environmental and cultural impacts of the project.

On the grassroots front, 38 conservation and environmental groups in Virginia and West Virginia have combined efforts to oppose the ACP. The group, called the Allegany-Blue Ridge Alliance (ABRA), cites among its primary concerns the ecologically-sensitive habitats the proposed pipeline would cross, including over 49.5 miles of the George Washington and Monongahela State Forests in Virginia and West Virginia. The “alternative” version of the pipeline route would traverse 62.7 miles of the same State Forests. Scenic routes, including the Blue Ridge Parkway and the Appalachian Scenic Trail would also be impacted. In addition, it would pose negative impacts on many rural communities but not offset these impacts with any longer-term economic benefits. ABRA is urging for a programmatic environmental impact statement (PEIS) to assess the full impact of the pipeline, and also evaluate “all reasonable, less damaging” alternatives. Importantly, ABRA is urging for a review that explores the cumulative impacts off all pipeline infrastructure projects in the area, especially in light of the increasing availability of clean energy alternatives.

Environmental and political opposition to the pipeline has been strong, especially in western Virginia. Friends of Nelson, based in Nelson County, VA, has taken issue with the impacts posed by the 150-foot-wide easement necessary for the pipeline, as well as the shortage of Department of Environmental Quality staff that would be necessary to oversee a project of this magnitude.

Do gas reserves justify this project?

Dominion, an informational flyer, put forward an interesting argument about why gas pipelines are a more environmentally desirable alternative to green energy:

If all of the natural gas that would flow through the Atlantic Coast Pipeline is used to generate electricity, the 1.5 billion cubic feet per day (bcf/d) would yield approximately 190,500 megawatt-hours per day (mwh/d) of electricity. The pipeline, once operational, would affect approximately 4,600 acres of land. To generate that much electricity with wind turbines, utilities would need approximately 46,500 wind turbines on approximately 476,000 acres of land. To generate that much electricity with solar farms, utilities would need approximately 1.7 million acres of land dedicated to solar power generation.

Nonetheless, researchers, as well as environmental groups, have questioned whether the logic is sound, given production in both the Marcellus and Utica Formations is dropping off in recent assessments.

Both Nature, in their article Natural Gas: The Fracking Fallacy, and Post Carbon Institute, in their paper Drilling Deeper, took a critical look at several of the current production scenarios for the Marcellus Shale offered by EIA and University of Texas Bureau of Economic Geology (UT/BEG). All estimates show a decline in production over current levels. The University of Texas report, authored by petroleum geologists, is considerably less optimistic than what has been suggested by the Energy Information Administration (EIA), and imply that the oil and gas bubble is likely to soon burst.

Natural Gas Production Projections for Marcellus Shale

Natural Gas Production Projections for Marcellus Shale

David Hughes, author of the Drilling Deeper report, summarized some of his findings on Marcellus productivity:

  • Field decline averages 32% per year without drilling, requiring about 1,000 wells per year in Pennsylvania and West Virginia to offset.
  • Core counties occupy a relatively small proportion of the total play area and are the current focus of drilling.
  • Average well productivity in most counties is increasing as operators apply better technology and focus drilling on sweet spots.
  • Production in the “most likely” drilling rate case is likely to peak by 2018 at 25% above the levels in mid-2014 and will cumulatively produce the quantity that the Energy Information Administration (EIA) projected through 2040. However, production levels will be higher in early years and lower in later years than the EIA projected, which is critical information for ongoing infrastructure development plans.
  • The EIA overestimates Marcellus production by between 6% and 18%, for its Natural Gas Weekly and Drilling Productivity reports, respectively.
  • Five out of more than 70 counties account for two-thirds of production. Eighty-five percent of production is from Pennsylvania, 15% from West Virginia and very small amounts from Ohio and New York. (The EIA has published maps of the depth, thickness and distribution of the Marcellus shale, which are helpful in understanding the variability of the play.)
  • The increase in well productivity over time reported in Drilling Deeper has now peaked in several of the top counties and is declining. This means that better technology is no longer increasing average well productivity in these counties, a result of either drilling in poorer locations and/or well interference resulting in one well cannibalizing another well’s recoverable gas. This declining well productivity is significant, yet expected, as top counties become saturated with wells and will degrade the economics which have allowed operators to sell into Appalachian gas hubs at a significant discount to Henry hub gas prices.
  • The backlog of wells awaiting completion (aka “fracklog”) was reduced from nearly a thousand wells in early 2012 to very few in mid-2013, but has increased to more than 500 in late 2014. This means there is a cushion of wells waiting on completion which can maintain or increase overall play production as they are connected, even if the rig count drops further.
  • Current drilling rates are sufficient to keep Marcellus production growing on track for its projected 2018 peak (“most likely” case in Drilling Deeper).

Post Carbon Institute estimates that Marcellus predictions overstate actual production by 45-142%. Regardless of the model we consider, production starts to drop off within a year or two after the proposed Atlantic Coast Pipeline would go into operation. This downward trend leads to some serious questions about whether moving ahead with the assumption of three-fold demand for gas along the Carolina coast should prompt some larger planning questions, and whether the availability of recoverable Marcellus gas over the next twenty years, as well as the environmental impacts of the Atlantic Coast Pipeline, justify its construction.

Next steps

The Federal Energy Regulatory Commission, FERC, will make a final approval on the pipeline route later in the summer of 2015, with a final decision on the pipeline construction itself expected by fall 2016.

UPDATE #1: On January 19, 2016, the Richmond Times-Dispatch reported that the United States Forest Service had rejected the pipeline, due to the impact its route would have on habitats of sensitive animal species living in the two National Forests it is proposed to traverse.

UPDATE #2: On February 12, 2016, Dominion Pipeline Company released a new map showing an alternative route to the one recently rejected by the United States Forest Service a month earlier. Stridently condemned by the Dominion Pipeline Monitoring Coalition as an “irresponsible undertaking”, the new route would not only cross terrain the Dominion had previously rejected as too hazardous for pipeline construction, it would–in avoiding a path through Cheat and Shenandoah Mountains–impact terrain known for its ecologically sensitive karst topography, and pose grave risks to water quality and soil erosion.

Central Penn Pipeline Under Debate

By Karen Edelstein, NY Program Coordinator, FracTracker Alliance

Background

PipelineOver the past month and a half, a new pipeline controversy has been stirring in Pennsylvania. The proposed $2 billion “Central Penn Pipeline” will be built to carry shale gas throughout the country. Starting in Susquehanna County, the 178 mile pipeline will run through Lebanon and Lancaster counties to connect the existing Tennessee Pipeline in the north with the Transco Pipeline in the south.

Oklahoma-based Williams Partners, the company proposing the pipeline, says that the project would help move gas from PA to locations as far south as Georgia and Alabama, in addition to adding relief from higher energy bills. The “Atlantic Sunrise Project,” as it is formally known, would also require the construction of two new 30,000 horse-power compressor stations: “Station 605” along the northern leg of the pipeline in Susquehanna County, as well as “Station 610” on the southern part of the pipeline. The northern part of the proposed pipeline will be 30 inches in diameter and run for about 56 miles; the southern portion will be 42 inches in diameter and about 122 miles long.

According to the US Energy Information Agency (EIA), in 2008, PA had over 8,700 miles of pipeline. Since then, that figure has increased significantly as the shale plays in PA continue to be exploited. Industry maintains that pipelines are the safest method for moving gas from the well to market, and has noted that for safety concerns they have intentionally co-located 36% of the northern part of the pipeline within the rights-of-way of Transco’s or other utility’s pipelines.

Despite the sanguine view of this project by industry, residents have rallied against the pipeline since mid-April, when landowners started getting information packets in the mail about the proposal.

Pipeline Proposal Map

While the exact route of the pipeline has yet to be determined, FracTracker has adapted documents from Oklahoma-based Williams Partners Company to provide this interactive map below. The proposed pipeline is shown in red.

For a full-screen version of this map (with legend), click here.

Proposal Concerns

Public awareness and concern about the pipeline continues to build, as was evident when 1,100 residents attended an open house in Millersville, PA on June 10th hosted by Williams. For more information see this article in Lancaster Online.

The Lancaster County Conservancy has advocated moving the pipeline away from various sensitive habitats including the Tucquan Glen Nature Preserve, Shenk’s Ferry Wildflower Preserve, Fishing Creek, Kelly’s Run, and Rock Springs to preserve the wildlife and beauty of those areas. According to Williams:

The pipeline company must evaluate a number of environmental factors, including potential impacts on residents, threatened and endangered species, wetlands, water bodies, groundwater, fish, vegetation, wildlife, cultural resources, geology, soils, land use, air and noise quality…  More

Despite what the website says, Williams admitted to not analyzing the pipeline route for possible sensitive habitat encroachment, and instead, they will simply follow the existing utility routes.

Williams, according to a report by WGAL Channel 8 in PA “relies on the communities affected to bring up any potential problems.” His statement was backed up when residents in a packed hearing room in Lancaster County voiced their opposition, resulting in Williams Partners now considering extending their pipeline by 2 ½ miles to get around the sensitive natural area at Tucquan Glen. An alternate route to avoid Shenk’s Ferry, however, had not been put forward.

Lancaster Farmland Trust is concerned about the plan for the pipeline to pass through several protected farms, and Lebanon County Commissioner Jo Ellen Litz has also taken a strong stand against the current proposed route. The proposed pipeline would not only go through farmlands, but it is also expected to cross the Appalachian Trail, Swatara State Park, and Lebanon Valley Rails to Trails.

Pipeline impacts are not limited to conservation and agriculture. There is increasing concern that the risks posed by large-diameter, high pressure pipelines such as this one may prevent nearby homeowners from keeping their mortgage loans or homeowner’s insurance. Future purchasers of the property may also encounter difficulty being approved for a mortgage loan or homeowner’s insurance.

While the pipeline company can purchase pipeline easements from property owners, industry can also petition the government to take the land by eminent domain from unwilling property owners. Pipeline rights-of-way acquired through eminent domain for these pipelines could potentially complicate a private property owner’s mortgage financing and homeowner’s insurance.

The final decisions about the siting of the pipeline is ultimately up to FERC, the Federal Energy Regulatory Commission.

Resources

Williams’ original maps of the pipelines can be viewed here: SOUTH | NORTH