Top US gas producer says pipeline fights endanger industrial world

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The largest US natural gas producer has lambasted a “war on infrastructure” that risks sparking a Europe-style energy crisis in parts of the US, days after the latest delay to a new pipeline fast-tracked for approval by Congress.

EQT chief executive Toby Rice told the Financial Times that the US had “oceans of natural gas”, but companies like his in the prolific Appalachian shale region were struggling to add supplies because new pipeline capacity had been blocked.

“The industrial world that we enjoy now is severely compromised because of the lawsuits, the pushback and the movement to cancel energy infrastructures and modern society. We’ve run out of flexibility,” said Rice, 41, who describes himself as a “shalennial”.

His comments followed the announcement last month of another delay to the Mountain Valley Pipeline, a 303-mile gas project stretching between West Virginia and Virginia that is opposed by green campaigners and some landowners.

When MVP was first announced in 2014 it was expected to be completed by 2018 and cost $3.5bn. It is now forecast to cost $7.2bn and begin operations next year.

“The ramp-up of MVP’s contractor workforce has been slower and more challenging than expected, due to multiple crews electing not to work on the project based on the history of court-related construction stops,” Equitrans Midstream, one of the owners of MVP, said in a securities filing.

In June, Congress passed a law specifically to fast-track construction of the MVP following the intervention of Joe Manchin, a West Virginia senator who holds the balance of power in the Senate. A month later the Supreme Court cleared the legal path for construction to resume.

But several attempts to pass laws in Congress to streamline permitting processes more broadly, which were supported by both the fossil fuel and renewable energy lobbies, have failed over the past two years.

Rice said the fact it now took an act of Congress to get a single pipeline built in the US “should scare the hell out people”, particularly when cities in New England have to import liquefied natural gas from abroad during winter freezes.

He warned that parts of the US could face the kind of energy crisis that hit Europe after Russia’s full-scale invasion of Ukraine. Rice said Europe was vulnerable because it had “shut down building infrastructure”.

“What’s happened in Europe is happening in the United States. We’re just five years behind,” Rice said.

Since 2016 at least four pipelines — PennEast, Constitution, Atlantic Coast and Northeast Direct which could have connected EQT’s shale gasfields to the US east coast — have been cancelled. However, capacity on other pipelines in the north-east has been expanded, according to data from the Energy Information Administration.

Opponents of the MVP project argue that it poses a risk to properties and sensitive ecosystems and prolongs the lifespan of the fossil fuel industry, whose emissions are the main cause of climate change.

“When companies make investments in expensive, capital-intensive, fossil fuel infrastructure it creates its own momentum for them to keep using the asset at a time when we need to move beyond fossil fuels,” said Casey Roberts, an attorney at the Sierra Club, an environmental group.

Last year the build out of interstate natural gas pipelines in the US fell to a record low of 897mn cubic feet a day, down from a peak of 28bn in 2017.

Pipeline capacity constraints have the ability to curtail gas flows from Appalachia into New England. Last winter, prices for gas to be delivered in Boston briefly soared to almost $30 per million British thermal units, comparable to prices in Europe, where utilities were scrambling to find international supplies to replace Russian energy.

In a note to clients in September, consultancy Wood Mackenzie said that a failure to build new pipelines in the north-east would raise gas prices, dent demand and accelerate the energy transition away from gas in that market. As a result, north-east gas production would be downgraded significantly to 30bn cubic feet a day or by 10bn cu ft/d below the base case in 2040, it said.

Williams, a $42bn pipeline company, previously clashed with former New York Democratic governor Andrew Cuomo after his administration denied water quality permits for its $1bn Constitution pipeline even though it had been approved by federal energy regulators.

“Permitting has become highly weaponised in Democratic states, and so it’s being used completely inappropriately,” said Alan Armstrong, Williams chief executive.

Additional reporting by Amanda Chu in New York