Obama Draft EIS on Keystone XL Leans Toward Project Approval

April 2013, Vol. 68 No. 4

"A standard that effectively precludes the building of new coal-based plants, combined with the difficulties in being able to build new nuclear or large hydro plants, puts the nation at risk of over-reliance on a single fuel source, natural gas," says Thomas Kuhn, president, Edison Electric Institute.

Groups such as the Utility Air Regulatory Group, which is composed of electric utilities, go even further. "It is evident from this discussion that EPA’s no-new-coal energy policy jeopardizes the reliability of the electricity supply because of infrastructure problems associated with pipelines and storage capacity," says F. William Brownell, counsel for the Utility Air Regulatory Group. The American Public Power Association and National Rural Electric Cooperatives Association have made similar points.

But environmentalists say there will be plenty of natural gas and a Feb. 28, 2013, letter from the Environmental Defense Fund underlines that argument. The letter argues that adequate pipeline and storage capacity will be added to the current system to support new gas-powered utilities, and cities an INGAA report published in 2011 as evidence. It goes on to cite various reports, including ones from INGAA that forecast additional natural gas demand by the electric utility industry requiring 43 Bcf/d of new natural gas supply, which, coincidentally, adds the letter, is what is predicted to be built by consulting firm Navigant. Similarly, the Energy Information Administration's current tally of pipeline projects lists 73 interstate and intrastate pipeline construction or expansion projects that have been announced, approved or are under construction with expected online date from 2013 to 2016. These pipeline projects are located in every region of the country and represent about 35 Bcf/d of capacity and over $10 billion of investment. Tomás Carbonell, one of the EDF attorneys signing the letter, declined to explain what prompted the letter when reached by phone.

But utility groups say predictions about new pipelines and adequate supply are just that: predictions. They don't account for such things as slower shale gas production because of federal and state regulatory hurdles, increased exports of LNG and other things. "As these studies identify, while INGAA believes the physical capabilities are available to meet such needs, numerous obstacles beyond the control of the pipeline builders could delay or derail efforts to meet these projected needs," says Rae E. Cronmiller, environmental counsel, National Rural Electric Cooperative Association.