Natural Gas Pipeline Shortages Could Hurt Corporate Productivity, Experts Warn

A natural gas pipeline going over a body of water

(Credit: Canva Pro)

by | Nov 30, 2023

There’s good news and bad news. According to the National Economic Research Associates, the United States is awash in natural gas, enabling it to meet future corporate demand — if regulators allow companies to build pipelines. The same study says the country can export natural gas while keeping prices low at home.

Natural gas fuels U.S. electric generation, comprising about 40% of the pie. But it is also used to feed the chemical and manufacturing processes: Natural gas liquids — ethane, propane, butane, and others — are split off and used as valuable feedstocks to create products for everyday use. The final analysis means more significant economic growth and more jobs.

“The solution is straightforward: through a supportive regulatory environment and streamlined permitting process, the United States can continue investing in and expanding its interstate natural gas pipeline infrastructure to safely and reliably deliver affordable fuel to end-users at home and abroad,” said the Interstate Natural Gas Association of America. “Unfortunately, the current political and regulatory environment is a significant barrier to the natural gas industry bringing low-cost natural gas to consumers.”

To that end, the North American Electric Reliability Corp. cautioned that half of this country and parts of Canada could go cold this winter because of inadequate natural gas pipeline infrastructure.

Indeed, NERC and the Federal Energy Regulatory Commission issued a joint statement about the potential loss of the Everett Marine Terminal in New England and its consequences for the reliability and affordability of the region’s energy supplies. Winter Storm Elliot triggered the concern, which hit last year.

According to the U.S. Energy Information Administration, three million miles of existing natural gas pipelines exist in the United States, delivering 27.6 trillion cubic feet of natural gas to about 77.7 million consumers. Gas producers say that as many as 62,000 miles of new pipeline is needed over the next 25 years to fuel electric generators and feed the chemical and manufacturing processes.

“As discussions regarding the future of Everett continue, we encourage all parties to keep reliability and affordability at the center of those negotiations,” write Willie Phillips of FERC and James Robb of NERC.

The Legal Balance

But, opponents of more natural gas — production and infrastructure — are not convinced. They cite several concerns, including fugitive methane emissions and the potential harm to water quality. Their preferred tack is to invest heavily in green energies, which they say will create jobs and almost eliminate the threat of global warming.

Getting energy infrastructure built in the United States is an exhausting task. Lawsuits abound, which for the environmental movement is often intended to preserve ecological integrity.

While conservative judges tend to be pro-economic development and liberal jurists often side with environmental protection, the reality is that their ultimate decisions are trying to incorporate all concerns. At least at the nation’s highest court, the Supreme Court, the judges are erring on the side of business development. However, they require companies to protect endangered species and environmentally sensitive areas.

The common thread is that the projects cross federal and state lands and can go through rivers, roads, and parks. Federal law tries to streamline the tasks to avoid having to appeal to hundreds of individual players. In most cases, lawyers ask the courts to bring efficiencies and decide what entity gets to oversee the effort. That’s key because some federal agencies focus more on economic development while others zero in on environmental protection.

“The deference is to the federal agencies to exercise their discretion under the law,” said Bret Birdsong, a law professor at the University of Nevada Las Vegas, in a chat with this writer, adding that each presidential administration might have different priorities.

The twin goals of economic expansion and carbon constraints need not be in conflict. The United States illustrates the point, having increased its job opportunities while lessening its heat-trapping emissions — made possible, for now, with the help of shale gas.

 

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