(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – Back in February, we wrote about new FERC regulations that had been enacted that could make gas pipeline permitting more difficult. In a decision issued at the commission’s monthly meeting in March, FERC decided to revert back to its long-standing method for reviewing natural gas pipeline applications, while opening the changes announced in February to feedback rather than applying them immediately. One of the policies added new considerations for environmental and social issues. The policy stated that the commission would consider four major factors before approving a project: the interests of the developer’s existing customers; the interests of existing pipelines and their customers; environmental interests; and the interests of landowners, environmental justice populations and surrounding communities. The other policy was an “interim” plan for quantifying natural gas projects’ greenhouse gas emissions. It laid out, for the first time, how the agency would determine whether new projects’ contributions to climate change would be “significant,” and encouraged developers to try to reduce their greenhouse gas emissions. The decision to open the policies to feedback instead of implementing them immediately, as was initially contemplated, was the result of comments from a number of pipeline developers that told commissioners that the policy changes were creating widespread uncertainty for the industry. The agency accepted initial comments on the drafts until April 25. Once it finalizes potential new policies, they will only be applied to projects proposed after that time. In recent years, however, federal courts have ordered the commission, on multiple occasions, to analyze natural gas projects’ contributions to climate change and effects on historically disadvantaged communities. Part of the aim of the new policy statements was to respond to those court rulings. As we’ve noted in previous comments, it is unclear exactly when and what effect this will have on pipeline construction. Import Supply – The March import total was 86,377 tons which was 13,000 tons less than the license tally from last month. April import licenses show a return to lower volume with 63,635 tons. The May linear forecast, with 11 of 22 days summed, is more than double April licenses at 145,039 tons. Keep in mind this is a linear forecast, the month could be front loaded. The top import item for the month of March 2022 was Carbon ERW, over 4 ½” OD not over 16” OD, at 31,322 tons. The price was $1,542/ton which is up $91/ton.
Preston Pipe Report – May 2022
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