(by Paul Vivian and Rick Preckel, www.prestonpipe.com) Market Monitor – In order to get Senator Manchin on board with the Inflation Reduction Act, Democratic leadership had to agree to advance legislation on energy project permitting reform. The side deal would set new two-year limits, or maximum timelines, for environmental reviews for “major” projects. It would also aim to streamline the government processes for deciding approvals for energy projects by centralizing decision-making with one lead agency. Other provisions would limit legal challenges to energy projects and give the Energy Department more authority to approve electric transmission lines that are deemed to be “in the national interest”. One provision in the agreement could make it harder for government agencies to deny new approvals based on certain environmental impacts that are not directly caused by the project itself. While the expectation was that Republicans and Democrats would support the permit reform legislation for different reasons, the rhetoric suggests maybe not. Currently, this is partially because the only text that has been made available is a summary, and also because the plan is to attach the Democratic version to stopgap government funding legislation. And of course there is politics. Republican Sen. Shelley Moore Capito introduced her own permitting legislation cosponsored by 38 Senate Republicans. More on this at the Forecasting Summit. Why is this important? Constant delays and legal challenges by “Keep It In The Ground Groups” have caused the demise of the Constitution Pipeline (Pennsylvania-New York); the Northern Access Pipeline (Pennsylvania- New York); and the Atlantic Coast Pipeline (West Virginia-North Carolina). According to the U.S. Chamber of Commerce Global Energy Institute, as reported by the Interstate Natural Gas Association of America, these delays/cancellations ultimately resulted in $7.8 billion in lost GDP, over 50,000 jobs not created, and $1.83 billion in lost tax revenues. Import Supply – The July import total was 95,743 tons which was right on the license tally from last month. August import licenses are showing a small drop in volume with 82,406 tons. The September linear forecast, with 8 of 21 days summed, is down still again to 72,921 tons. Drilling has been pretty flat and the economy uncertain. The top import item for the month of July 2022 was Carbon ERW, over 4 ½” OD not over 16” OD, at 36,276 tons. The price was $1,584/ton which is up $98/ton. While still the largest import item could price, which is up two months in a row, be having an impact on volume? Given that demand is pretty flat we expect so.
Preston Pipe Report – Sept 2022
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