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IEEFA questions the viability of large pipeline projects in comments to FERC

June 15, 2021

World Pipelines: 

The Institute for Energy Economics and Financial Analysis (IEEFA) statement reads as follows: “As the Federal Energy Regulatory Commission (FERC) reviews the public comments it recently received on its proposal to reconsider how it determines whether a gas pipeline should be granted a certificate of public convenience and necessity, it would do well to consider the cautionary tale of a massive fossil fuel infrastructure project, the Keystone XL oil pipeline. Investors should be on the alert as well.

“The inherent risks of both oil and gas pipeline project efforts in today’s energy market are significant. Moody’s Investor Services released a report in October 2020 presenting nine examples in which companies failed to recognise the implications of regulatory processes, community opposition, and market signals – and ultimately could not complete their projects. Factors included oil and gas prices, carbon emission issues, utility investment choices, community opposition, state and local political decision-making and the rapid pace of renewable energy growth. Moody’s concluded that new pipelines – including both oil and gas – come with the highest risks, and declared it would reserve its long-term credit rating judgment based on actual completion and operations of pipeline projects.

“The Keystone XL project, proposed to run from Alberta through Montana, South Dakota and southern Nebraska, would have moved oil rather than gas, which meant it did not fall within FERC’s sitting jurisdiction. But because it would have crossed the border between the United States and Canada, it was an international pipeline that required presidential approval.

[ Suzanne Mattei ] 

More: IEEFA comments on viability of large pipeline projects in wake of KXL cancellation

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