Pipeline Lawsuits Lead To Energy Shortages, High Heating Costs, and Increased CO2 Emissions

The impacts of the war on fossil fuels will be very apparent this winter

A financial and public health nightmare due to a shortage of natural gas is a definite possibility this winter, especially in the northeastern U.S. The problem stems from the lack of pipelines due to decades of lawsuits filed by anti-fossil groups, even though the U.S. is the world’s largest producer of natural gas and crude oil. The pipeline shortage has worsened in the last five years, especially after the last presidential election.

Every new oil and natural gas pipeline proposed in the U.S. is challenged in court by anti-fossil fuel groups, and their efforts have been gaining more success in recent years. These groups were encouraged by the election of Joe Biden, and his cancellation of the Keystone XL pipeline as his first act as President, so more lawsuits can be expected.

The campaigns against fossil fuels have been around for decades but got a new lease on life when the “shale revolution” revealed massive oil and gas reserves starting in the Barnett Shale in the early 2000s. Anti-fossil fuel groups quickly stopped supporting “natural gas as a transition fuel” when U.S. reserves of natural gas and crude oil proved sufficient to last for hundreds of years.

Anti-fossil fuel groups such as the Environmental Defense Fund focused on the message that ‘fracked gas” was dangerous to health and the environment, with their protests centering on natural gas wells.  Protestors focused on stopping oil and gas drilling by blocking roads and chaining themselves to drilling equipment, but those protests were unsuccessful in stopping drilling.

Unfortunately, the anti-fossil fuels groups figured out they could have more success in stopping fossil fuel development by focusing on preventing pipelines from being constructed.  They correctly calculated that oil and gas wells wouldn’t be drilled if the oil and gas couldn’t be transported.

For years, every proposed new pipeline has been challenged in court as dangerous to the environment because it crosses rivers and streams, goes under lakes, or threatens some endangered animal.  Unfortunately, this strategy has been very successful in hampering natural gas development but tragically successful in causing skyrocketing heating costs in the northeast US.

Some of these protests gained international attention, such as the Keystone XL Pipeline, which has been under attack since its construction was proposed in 2005. The Dakota Access Pipeline attracted tens of thousands of people and became a media circus in 2016.  Many other pipelines have been blocked without media attention, such as the Constitution pipeline, which was to transport natural gas through Pennsylvania and New York, which was subjected to legal battles for eight years and finally gave up in early 2021. 

Likewise, the New York Department of Environmental Conservation blocked the Williams company Northeast Supply Enhancement natural gas pipeline in New York state in mid-2020.  The result is a severe lack of natural gas pipeline capacity in the Northeastern U.S., and those chickens are coming home to roost this winter.

Pipeline projects that have been blocked and are still in the courts include:

Mountain Valley Pipeline (MVP): The $6.0 billion Mountain Valley natural gas pipe is being built by units of Equitrans Midstream Corp, NextEra Energy, Inc., and others. It is designed to transport about 2 billion cubic feet per day (CFD) of gas from West Virginia to Virginia.  This pipeline would permit the development of the largest natural gas reserves in the U.S., estimated to be the size of Russia’s natural gas reserves.  The project was initially expected to enter service in 2018, but

legal and regulatory delays over environmental reasons related to numerous water crossings have delayed the pipeline’s completion. The completion of this pipeline was one of the bargaining chips that Senator Joe Manchin held out for to secure his vote for the “Inflation Reduction Act.” Some say that Senator Manchin was deceived and the pipeline will not be approved.

Mariner East 2 Expansion: The $2.5 billion Mariner East 2 natural gas liquids (NGL) pipeline built by a unit of Energy Transfer LP will increase the capacity of the Mariner East system by 275,000 barrels per day from Ohio, West Virginia, and western Pennsylvania to eastern Pennsylvania.  The pipe was initially expected to enter service in the third quarter of 2017. After delays caused by drilling fluid spills, Energy Transfer put the project into service in December 2018. The final phase is expected to be finished by the second quarter of 2021.

Trans Mountain Expansion: The C$12.6 billion ($9.85 billion) Trans Mountain expansion project was purchased by the government of Canada in 2018. It is designed to nearly triple the capacity of the existing crude pipeline from 300,000 BPD to 890,000 BPD. The channel flows from Alberta to the coast of British Columbia, and the expansion is expected to be completed in December 2022.

Enbridge Line 3: Enbridge Inc is expanding its existing Line 3 pipe through North Dakota, Minnesota, and Wisconsin to roughly double its capacity to ship 760,000 BPD of crude from Alberta to Wisconsin.  Enbridge started construction on the 337-mile (542-km)Minnesota portion of the pipe in December 2020 and expects to complete the project in the second half of 2021. Environmental groups and others are challenging some of the project’s water crossing permits in court.

Enbridge Line 5: This pipeline carries light crude and propane through the Mackinac Straits in Michigan and has been in the ground for 68 years. The state’s governor recently ordered the line shut and revoked an easement allowing it to run through that body of water, citing the risk of spillage. Enbridge seeks to build a tunnel to house the line within the straits to protect that body of water. It needs additional state and federal permits for the line, however.

Dakota Access Pipeline: The Dakota Access Pipeline carries 470,000 barrels per day of crude oil from North Dakota’s Bakken shale region to Nebraska, where it connects with other lines to the Midwest and U.S. Gulf Coast.  It has been in operation since 2017 but still faces legal challenges and could still be shut down.  Courts have ordered more environmental reviews of an easement under Lake Oahe, a drinking water source for the Standing Rock Sioux tribe. The Trump administration granted it a permit in 2017, but it is still being challenged.

Energy shortages and increased CO2 this winter

A common thread in many pipeline defeats is using the authority of the Corps of Engineers against pipelines that cross streams, rivers, and other bodies of water.  The Corps grants permission for those crossings on standard terms under nationwide permits. These are renewed every five years, most recently in January 2017, in the last days of the Obama administration.

Other defeats for critical pipelines include the Atlantic Coast Pipeline and, most recently, the Mountain Valley Pipeline, which would transport natural gas from the Appalachian region of the Marcellus Shale from West Virginia to Western Virginia.  The MVP is the pipeline that Senator Joe Manchin supposedly cut a deal with Nancy Pelosi and Chuck Schumer to get permitted.  It appears that Mr. Manchin got snookered because some Democrats have already said they will not vote to approve the MVP, no matter what verbal assurances he might have received.

The result of the numerous pipeline cancellations is that the energy security of the United States is now at risk.  More importantly, the lack of natural gas pipeline capacity along the east coast threatens to increase carbon dioxide emissions this winter because municipalities and individuals plan to burn more fuel oil, emitting more carbon dioxide than natural gas. 

RealClearEnergy described the impact of burning fuel instead of natural gas: “Fuel oil is literally and figuratively near the bottom of the barrel regarding pollution. Per unit of electricity delivered, carbon dioxide emissions from fuel oil are 57 percent higher than from natural gas. With the adequate infrastructure to replace that fuel oil generation with natural gas, CO2 emissions could have been reduced by 580,000 tons in January 2021 alone. For perspective, that represents taking 126,000 cars off the road for a year!”

The lack of pipeline capacity also underlies another current problem in the U.S.: the shortage of refining capacity in the US. , in addition to the lack of crude oil pipelines to transport oil to US refineries on the East and West coasts.  As a result, these refineries must import foreign crude oil because the Jones Act prohibits U.S. foreign-flagged ships from shipping domestic crude oil from the Gulf Coast to a destination within the U.S.

Where this is headed

Unfortunately, the war on pipelines is part of the “green new deal,” which intends to decarbonize the United States. Unless the current administration’s policy is replaced in 2024 with a more “all of the above energy policy,” the U.S. is in a race with Europe to see which country can create the worst energy crisis.  The good news is that this situation does not have to be permanent. Once the right policies are in place, the pipeline shortage can be rectified in a few years, but there will be some economic and human pain during the recovery.