Increasing Economic Risk Causes Cancellation of 30” Constitution Pipeline in NY State

Proposed Constitution natural gas pipeline would terminate near Albany

From a Press Release of the North American Oil & Gas Pipelines, February 25, 2020

The Constitution Pipeline has been canceled. After an eight-year regulatory battle, Williams announced February 24th that it was cutting off investment in the proposed project.

In its fourth quarter 2019 earnings report, released February 19, Williams declared that its fourth quarter and full year 2019 modified earnings were negatively impacted by a $354 million impairment of the Constitution Pipeline project, of which Williams’ 41 percent share was $145 million.

The proposed 124-mile pipeline project was designed to connect natural gas production in Pennsylvania to northeastern markets, with a capacity to transport 650 million cubic feet per day (MMcf/d) of natural gas. The 30-in. pipeline would have extended from Susquehanna County, Pennsylvania, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, New York.

In addition to Williams, the pipeline was backed by partners Duke, Cabot and AltaGas. The project had scored a victory on Aug. 28, 2019, when the Federal Energy Regulatory Commission (FERC) issued an order concluding the New York Department of Environmental Conservation (NYDEC) has waived its authority under the Clean Water Act to issue or deny a water quality certification for the proposed Constitution pipeline. The NYDEC denied the project a water quality permit in 2016.

“While Constitution did receive positive outcomes in recent court proceedings and permit applications, the underlying risk adjusted return for this greenfield pipeline project has diminished in such a way that further development is no longer supported,” Williams said in a company statement.

“Natural gas remains a critical part of our country’s clean energy future, and Williams is well-positioned to take advantage of the growing demand for natural gas as a reliable, low cost and clean alternative for power generation fuel, heating oil and diesel,” the company added. “Our existing pipeline network and expansions offer much better risk adjusted return than greenfield opportunities, which can be impacted by an ambiguous and vulnerable regulatory framework.

We are prepared to deliver the clean energy benefits of natural gas now through infrastructure projects like Regional Energy Access, Leidy South and the Northeast Supply Enhancement. And as communities and leaders recognize the important role natural gas has played in U.S. emissions reductions – and recognize the ability to further lower emissions through use of natural gas in the future – we stand ready to deliver.”

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See also: Amidst fracking debate, more natural gas pipelines being considered for Pennsylvania and New Jersey | Allie Miller, Philly Voice, February 21, 2020

Plans for two natural gas pipelines that would run through Pennsylvania and New Jersey face hurdles from regulators and courts, as leaders in Washington, D.C. prepared to debate the future legality of fracking.

The PennEast Pipeline and the Northeast Supply Enhancement Project are in pre-construction phases. Both projects had been slowed until recently in part due to environmental concerns and the future of using climate-changing fossil fuels.