Pipeline brawl shakes industry desperate to build

(Bloomberg) — A series of legal battles in Louisiana has slowed construction of more than $2 billion worth of pipeline projects in the state. Yet the dispute did not originate with environmentalists: it was led by one of the largest gas pipeline operators in the United States.

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In recent months, Energy Transfer LP has fought in court to prevent competitors from building pipelines to carry gas to export terminals on the Gulf Coast. Co-founded by Texas billionaire Kelcy Warren, the industry giant argued that the projects of Williams Cos., DT Midstream Inc. and Momentum Midstream, by crossing them under its own conduits, would encroach on its right of way and that the companies had not taken adequate measures. measures to ensure they will pass through its own pipelines safely.

On Tuesday, Momentum and Energy Transfer said they had settled their dispute, allowing Momentum to continue its plan to ship gas from the Haynesville shale basin in Louisiana and Texas to the Gulf Coast.

DT Midstream found an alternative to the Energy Transfer pipeline crossing, but the legal battle continued. In April, a state appeals court ruled in favor of DT Midstream.

An Energy Transfer victory would have made it “nearly impossible” for some pipeline projects to move forward, Louisiana Gov. Jeff Landry wrote in a court filing in November, when he was attorney general. State. Such a precedent could jeopardize an industry already desperate for pipeline expansion.

The dispute between Energy Transfer and Williams is ongoing.

The battles in Louisiana, home to more miles of pipeline per capita than anywhere else in the country, come as U.S. natural gas consumption is expected to rise.

Utilities are bracing for the biggest surge in energy demand in a generation due to data centers for artificial intelligence, as well as computer chip factories and a growing number of electric vehicles. Some of this additional energy will come from wind and solar power. But a significant portion will come from gas-fired power plants.

While environmentalists warn that the new pipelines will prolong the United States’ dependence on fossil fuels, industry executives say the economy will suffer without them. Goldman Sachs Group estimates that the country needs to increase its pipeline capacity by up to 23%, at a cost of nearly $25 billion, to meet demand by 2030.

If state and federal authorities fail to find ways to make it easier to permit and build pipelines, protests from utilities, technology companies and others will be significant, Williams CEO Alan Armstrong warned during a recent call with analysts.

“The screaming is going to get pretty loud,” Armstrong said on the call.

Yet pipelines have become difficult to build, especially when they cross state lines. A series of major projects have emerged in the face of political and legal challenges over the past decade, including TC Energy Corp.’s Keystone XL, Dominion Energy Inc. and Duke Energy Corp.’s Atlantic Coast Pipeline. and Williams’ Constitution. ..

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