Two pipelines, one path: Will FERC approve both?

E&E News

3 days ago

Two energy giants plan to build natural gas pipelines in the same place — setting the stage for a high-stakes squabble in the Southeast.
Both Williams Cos. and Mountain Valley Pipeline are trying to lay new pipe along Williams' existing Transco line in southern Virginia and North Carolina to meet growing energy demand.
The Federal Energy Regulatory Commission could approve both. But Williams has argued that its pipeline is big enough to handle all planned volumes of natural gas — prompting Mountain Valley to bristle at the implication that its Southgate project isn't necessary.
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'It seems as though Transco is attempting to undercut MVP Southgate,' Ian Heming, a natural gas analyst at East Daley Analytics, said in a recent interview.
That is noteworthy in the world of energy permitting. While FERC is required to consider whether a pipeline is needed, the agency generally defines need as whether companies have committed to buying the gas the line would carry. Williams has cast a broader net, telling FERC in a short filing this month that the company could tack on Southgate's 'incremental' volumes by adding meter tubes and regulation at an existing station.
The companies' push to build the pipelines comes as electricity demand across the United States is forecast to surge in the coming years. That includes the Southeast, where utilities are looking to build new fossil fuel plants to power a growing population and planned data centers. Both Williams' and Mountain Valley's projects cite that demand at the heart of their proposals.
Both companies are proposing to build about 30 miles of pipe along Williams' massive Gulf-to-New York Transco gas pipeline system. Both pipelines — MVP Southgate and the Eden Loop segment of Williams' Southeast Supply Enhancement Project (SSEP) — would start at the same point near Chatham, Virginia, and end near Eden, North Carolina.
FERC is planning to release environmental assessments of both projects this fall, with the review for Williams' SSEP slated for November and the analysis for MVP Southgate scheduled for October.
What's not being considered is the interest of ratepayers, said Shelley Robbins, senior decarbonization manager at the Southern Alliance for Clean Energy.
Her group doesn't think either pipeline is needed — and has safety concerns about plans to have the two lines repeatedly cross each other and the Transco main line. But Robbins said regulators don't seem to be looking at any advantages of building one pipe instead of two.
'In theory, that's cheaper,' Robbins said.
But, she added, 'the utilities and the pipeline companies make money building big things.'
Dueling projects
Building both pipelines would create a 30-mile corridor with up to six high-pressure gas lines running next to each other. The Transco system already includes as many as four parallel pipelines in that area.
The MVP Southgate project aims to move gas from the end of the main Mountain Valley pipeline — where it connects to Transco in Virginia — to Eden, North Carolina. Another company is building a 45-mile pipeline from that point east to a planned Duke Energy natural gas-fired power plant near Roxboro, North Carolina.
FERC approved Southgate in 2020, but Mountain Valley submitted an application in February to amend the expansion project by shrinking the pipeline's length and increasing its diameter.
The entire length of the proposed Southgate project now runs next to Williams' Transco pipeline.
In total, Williams' Transco Southeast Supply Enhancement project would add approximately 55 miles of new pipe in two segments in parts of Virginia and North Carolina, as well as new compressor units. One 24-mile segment, the Salem Loop, cuts between the North Carolina cities of Winston-Salem and Greensboro.
The other, the 30-mile Eden Loop, straddles the North Carolina-Virginia border and follows the same path of MVP Southgate.
It's unclear if Williams will ultimately decide to expand the capacity of the Eden Loop. But the company is essentially arguing in its FERC filings that it has the ability to expand and then 'would be able to essentially hold its almost full monopoly on gas into North Carolina, and that's what its goal is here,' said Heming at East Daley Analytics.
Mountain Valley, however, is asserting that the Southgate project would provide a needed redundancy to utilities that are supplying gas to North Carolina residents.
'The market has spoken, and shippers are asking for a pipeline alternative to Transco to support increased competition for transportation services in the region, and to provide critically needed natural gas pipeline capacity and diversity of supply to the region,' Mountain Valley told FERC in a July 11 letter.
Mountain Valley included supportive comments from the Public Service Co. of North Carolina and Duke Energy, two utilities that have signed contracts for the project's full capacity.
MVP Southgate spokesperson Shawn Day said the amended project gives North Carolina a diverse energy supply and resilience.
'While Transco may not like competition, the market does,' Day said in a statement.
'The vast majority of North Carolina's natural gas supply has historically been controlled by a single provider,' Day said. 'For years, the North Carolina Utilities Commission has recognized the state needs an additional interstate natural gas transmission provider to diversify the state's natural gas supply and promote competition.'
Williams said it will continue to engage with parties like Mountain Valley to ensure the Southeast Supply Enhancement Project can deliver energy.
'We acknowledge that there is a market desire for a second interstate pipeline to bring supplies into North Carolina,' Williams said in an emailed statement. The company did not respond to subsequent questions for clarity on whether it believes the Southgate line is necessary.
A demonstrated need?
The Trump administration's pro-fossil-fuel agenda makes it more likely that FERC would green-light MVP Southgate and 'provide that redundant gas supply, rather than have it be integrated into Transco's Southeast Supply Enhancement,' Heming said.
FERC, though, has stayed mum.
Asked after last month's FERC meeting whether both pipelines are needed, Chair Mark Christie (R) said he couldn't comment because the applications for the two pipeline projects are still pending.
'The question of need under the Natural Gas Act is always a central question of any NGA application, so I can't talk about either one of them,' Christie said.
FERC spokesperson Celeste Miller subsequently declined to comment on questions about the two pipeline projects.
At least one environmental group, meanwhile, said both pipeline projects are unnecessary.
'We don't accept that there is a shown need for the projects, and it's part of this broader over-expansion of fossil fuel infrastructure to serve data centers and [artificial intelligence],' said Jessica Sims, Virginia field coordinator for the group Appalachian Voices.
Sims, who was involved in the fight against the main Mountain Valley pipeline, said she hopes that neither project will get approved.
'I hope that the uniqueness of the co-located routes and the types of conversations that we're seeing in the docket would lead [FERC] to consider cumulative impacts in this circumstance,' Sims said.