Date: November 25, 2015 at 11:39
Subject: Rover posting to FERC
This was just posted to FERC to counter the demands of Rover and 3 shippers to pull ahead the timing for the final EIS and approval.
Rover assumes FERC will approve their application and that nothing in the EIS will delay or deter them. Rover has even set a DEADLINE FOR FERC TO APPROVE ROVER, "no later than the second quarter of 2016." (Roughly a 5-6 month pull ahead.) http://elibrary.ferc.gov/idmws/file_list.asp?accession_num=20151109-5038
Unlike Rover, many people think FERC approvals are not automatic and depend on a thorough evaluation of all factors.
Rover states that the "numerous pipeline certificate applications" are evidence of lack of pipelines. On the contrary, perhaps they represent the irrational speculation and poor planning that has plagued this industry for years.
However, THIS application is not about "numerous pipelines" but specifically Rover. Energy Transfer has not provided enough specific facts to prove Rover is justified, especially north of Defiance, OH.
If there really was a pipeline shortage, there would be high gas prices and low working gas storage levels. As it is, hub prices are below average, and the US is awash with natural gas with working gas storage at a record 4,000 Bcf level. All parts of the US have gas storage levels above their 5 year averages. http://ir.eia.gov/ngs/ngs.html?src=email
The substantial Marcellus price differential is being caused by Marcellus drilling companies blindly seeking production volumes rather than value. The pipeline companies are complicit. Economics dictates excessive production results in excessively low prices.
Over speculation and production has resulted in many gas drillers having risky debt levels and poor credit ratings. It is probably that some will not be able to fulfill their commitments.
http://www.capitalcube.com/blog/index.php/range-resources-corp-value-analysis-nyserrc-november-18-2015/
Shipper/drillers requests to pull ahead the Rover EIS should be evaluated considering FERC's own policy, "the Commission's traditional factors for establishing the need for a project, such as contracts and precedent agreements, MAY NO LONGER BE A SUFFICIENT INDICATOR that a project is in the public convenience and necessity." https://www.ferc.gov/legal/maj-ord-reg/PL99-3-001.pdf
And regarding the long view…
The DOE reports the US needs only "relatively modest interstate pipeline capacity additions (2.2–2.7 Bcf/d annually between 2015 and 2020). These "are potentially lower-cost alternatives to building new infrastructure and can accommodate a significant increase in natural gas flows."
http://energy.gov/sites/prod/files/2015/02/f19/DOE%20Report%20Natural%20Gas%20Infrastructure%20V_02-02.pdf
Few new pipelines are needed to meet the proposed Clean Power Plan. The EPA expects the proposed "Plan to increase natural gas use for electric generation by 1.2 Tcf in 2020, declining over time." http://www2.epa.gov/sites/production/files/2014-06/documents/20140602ria-clean-power-plan.pdf
A study finds new natural gas pipelines are NOT needed even in New England.
http://www.berkshireeagle.com/local/ci_29134769/new-gas-pipelines-not-needed-region-energy-report
Rover's hopes for LNG EXPORT may be dashed. Many analysts predict few new US and Canadian LNG export facilities will be built. From an SNL analysis of worldwide LNG overbuild, "The new consensus<https://www.snl.com/InteractiveX/article.aspx?ID=33750706> among analysts and other industry observers that the global LNG market will be oversupplied<https://www.snl.com/InteractiveX/article.aspx?ID=33795399> in the near term could mean that expansions of U.S. export projects constitute an overbuild." https://www.snl.com/InteractiveX/article.aspx?CDID=A-34491752-12842&KPLT=4 Longer term, even more foreign LNG capacity is coming. http://www.eia.gov/naturalgas/weekly/?src=email
It is up to FERC to consider ALL factors NO MATTER HOW LONG IT TAKES to conduct a thorough review of Rover.
Based on available information, it appears the economic, social and environmental COSTS OF ROVER FAR OUTWEIGH ANY BENEFITS.
FERC, thank you for your thorough review of Rover and for asking the right questions.
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