Small Victories for Gas Supply - The Year in Review
Much of 2016 involved discussions about the regulatory and litigation hurdles facing greenfield gas pipeline projects. At the start of the year, the industry focused intently on the Constitution Pipeline Project, but shifted its attention to the Rover Pipeline Project, which has been plagued, from the outset, by an unrealistic permitting schedule. Many themes emerged this year, including the real risks posed by the impact of cooperating agencies, which have always been required to "sign-off" on pipeline projects. But with increasingly emboldened environmental groups, many novel challenges outside of FERC may be a harbinger of things to come, which have kept, and will likely continue to keep, analysts, agencies, and pundits busy. And while most observers are focused exclusively on major takeaway projects, or what our team calls the "All Star Projects," these projects only account for 42 % of the capacity that companies had planned to hit the market in 2016. So, how did expectations for supply measure up in 2016? And will the delta between expectations and actuals narrow in 2017?
What Happened to New Supply?
Understandably, large growth projects are in the limelight, because they are arguably the most impactful on market dynamics, reach the greatest number of regional markets, and carry the largest quantities of natural gas. The Rover Pipeline Project, over 700 miles in length with 3.250 Bcf/d in capacity, definitely fits that bill, as we discussed in Rumor Has It - Rover Pipeline - Past, Present and Future . But while Rover and similar projects have been delayed -- years beyond company expectations -- smaller projects have been approved, constructed and placed in-service.
During 2016, there were 20 natural gas pipeline expansion and new construction projects placed in service. These projects totaled over 250 miles of new pipeline, 4.541 Bcf/d of additional capacity, and an estimated $1,695,209,269 spent. (Note: these numbers would go up, significantly, if accounting for prior notice and automatic blanket projects, as we discussed in Off the Radar - Columbia Gas Blanket Pipeline Projects.) And of that capacity, developers delivered 1.827 Bcf/d of new supply in the same states as those Rover will run through. All of these projects expand the ability to utilize existing pipeline systems. And all but one had been fully contracted prior to the initiation of its Certificate proceeding. These projects largely serve local needs, particularly those of gas-fired generators and utilities, another trend in 2016. But how does this measure up to expectations?
According to pipeline company in-service estimates, there was significant capacity predicted to to come online in 2016. After all, Phase 1 of Rover was expected to be in-service, as well as the Algonquin Incremental Market (AIM) Project and nine others which were planned to provide a total of 5.7 Bcf/d of additional capacity. Many of these projects have been under construction and are even partially in-service, but development continues beyond 2016. In coming years, the industry will see well tracked projects such as PennEast, Atlantic Sunrise, Northern Access 2016 (2017) and Atlantic Coast Pipeline (2018).
A Strong Year for LawIQ
As we enter 2017, we are ever thankful for our terrific customers -- a diverse blend of blue chip industry decision makers across the industry stakeholders and the supply chain s -- who not only enable our growth, but who also provide us with the feedback that allows us to consistently increase the utility and value of our product offering. We are proud of the development of our product, which includes many new features, driven primarily by customer themes.
Our enterprising team has a lot more in store for future product development, including expanding our data coverage, quantitative analytics and qualitative insights of the many complex legal, regulatory and legislative developments that directly impact your business. To do so, we've added new energy regulatory and financial expertise, as well as top flight data engineers, to our talented family of professionals. Reach out if you're interested to know what we have in store for 2017.
We are excited to see molecules flow in 2017.
Total Certificate Project Capacity (2008-present)
Total Additional Certificate Project Capacity (2008-2016)
