Pipeline Race Suggests Overbuilding in Virginia
Pipeline Race Suggests Overbuilding in Virginia FacebookTwitterLinkedInEmailPrint分享Brian Carlton for the (Waynesboro) News Virginian:While there is a need for natural gas in some parts of Virginia, too many companies are building pipelines to try and fill that void. This in turn could lead to overbuilding, creating pipelines that force legal battles and lengthy construction, but ultimately sit empty or at least are not used to maximum capacity. That was the argument presented in a new report from the Institute for Energy Economics on Wednesday.The company’s report argued that federal officials need to examine a larger picture when approving projects, such as the Atlantic Coast and Mountain Valley pipelines. All of these projects, the report said, are built on the idea that natural gas prices will remain cheap across the region containing the Marcellus shale. Natural gas often is contained in shale, a marine sedimentary rock. The Marcellus formation, which runs from Pennsylvania through western Maryland and into West Virginia, is one of the largest shale fields in the world, formed almost 400 million years ago as layers of dead plants and animals built up.Utility companies, the report stated, want to build pipelines to move that cheap natural gas to areas where they can charge higher prices, because of the demand for growth and construction.“An individual pipeline company acquires a competitive advantage if it can build a well-connected pipeline network that offers more flexibility and storage to customers,” the report states. “Thus, pipeline companies [are] competing to see who can build out the best networks the quickest. This is likely to result in more pipelines being proposed than are actually needed to meet demand in those higher-priced markets.”An October 2014 study by Moody’s Investors Service showed that pipelines currently being developed, if constructed, will deliver an estimated 27 billion cubic feet of natural gas per day from the Marcellus and Utica region. By comparison, currently 18 billion cubic feet are being piped out. It’s similar in some ways to the race between railroad companies in the 19th century to be the first to cross the nation. There is a need, with multiple companies competing to fill that need. The problem, the study asks, is what happens if all of the companies get approved for their projects and only one is needed to meet demand? What happens to the rest of that approved material?The cost of construction: Study questions if pipelines are needed
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