February 26, 2020 Read More →

Cancellation of Constitution pipeline a troubling sign for other projects, analysts say

S&P Global Market Intelligence ($):

The cancellation of a proposed natural gas pipeline into New York may be a sign of challenges ahead for other projects, both at the grassroots level and in Washington, D.C., according to energy analysts.

Anti-fossil-fuel activists have grown more successful in recent years, but Williams Cos. Inc.’s move to scrap the Constitution Pipeline Co. LLC project earned a rare designation in the history of energy infrastructure, according to Katie Bays, co-founder of energy consultancy Sandhill Strategy.

“It does take a lot to kill a pipeline project,” Bays said. “There’s really only a handful that have been killed by public policy. I think that was certainly a milestone.”

Williams announced it would shelve the project after years of opposition from New York and environmentalists. The proposed line from Pennsylvania’s shale gas fields became a symbol of the movement to keep fossil fuels in the ground and a trend of Northeast states with ambitious clean energy goals denying key water permits to pipeline projects.

Canceling Constitution is not “terribly material” for Williams, given the scale of the midstream giant’s operations, according to Stephen Ellis, energy and utilities strategist at Morningstar. But it does speak to challenges that Williams and other pipeline operators may continue to have on the East Coast, Ellis said. Other big projects facing a similar fight include Equitrans Midstream Corp.’s Mountain Valley pipeline and Dominion Energy Inc.’s Atlantic Coast project, Ellis said.

Bays sees potential ripple effects for other high-profile projects facing opposition beyond New York, including the PennEast Pipeline Co. LLC gas system, TC Energy Corp.’s Keystone XL and Enbridge Inc.’s Line 3 crude oil pipeline replacement in Minnesota. “There are other pipelines that are the target of environmental interference, and to see a pipeline get canceled certainly emboldens environmental groups,” Bays said.

[Tom DiChristopher]

More ($): Scrapped pipe project for New York a dire sign for other Northeast gas proposals

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