If you follow the evolution of the energy industry, you know that news about the authorization of large infrastructure projects can sometimes seem like a horror story: 14 years to build a power transmission line, a decade to get a mining permit and the reality that some projects can be built in much less time than it takes to obtain the required permits and overcome any legal challenges. It’s a known problem with many contributing factors, but no easy answers. In today’s RBN blog, we look at how permitting difficulties have become a point of interest for all sorts of stakeholders: industry groups, environmental advocates, the general public and politicians of all the areas Our focus today will be on the current poster child for permitting challenges, the Mountain Valley Pipeline (MVP), but we’ll also discuss how permitting setbacks complicate the development of all types of projects, from traditional pipelines to the fundamental initiatives. of the energy transition.
Almost everyone recognizes the benefit of having stakeholders and stakeholders involved in major proposals to build or expand infrastructure, whether it’s a new highway, an airport runway extension, or an interstate oil or gas pipeline. In addition, credible regulations and adequate safeguards (such as the Clean Water Act’s focus on protecting the nation’s water supplies) are essential to the process. Still, the reality is that the permitting process for some important and much-needed projects can drag on for three, six, or even nine years or more. And allowing delays not only increases project costs, but also puts additional strain on existing infrastructure and prevents some projects from becoming a reality.
Given the significant regulatory challenges several natural gas pipeline projects have faced in recent years (a trend we’ve covered extensively in our medium puzzle series), this is a logical place to start. Aside from blocking or delaying an individual pipeline project, permitting issues can also have ripple effects, such as creating market imbalances, preventing gas supplies from getting to where they are needed, and causing severe price disruptions, including distressed prices when gas is stuck, such as in Appalachia and the Permianand price spikes in gas-starved regions cut off from supplies, such as on the west coast i in New England. And even with all its existing infrastructure, the Gulf Coast will need considerably more new pipeline capacity given additional LNG feed gas demand is expected to be in line in the coming years. (LNG has its own permitting issues to deal with; see our Go up that hill series for more.)
