The federal government’s top energy utility regulator says a record increase in new pipeline capacity is contributing to a sustained period of low natural gas prices around the country.
In its 2016 State of the Markets Report, the U.S. Federal Energy Regulatory Commission (FERC) found that new pipeline infrastructure was helping to move low-cost natural gas supplies from Appalachia to demand centers in the Midwest and along the East Coast.
“New York City prices experienced the largest year-on-year decrease, falling 42 percent, and in the fall prices fell to record lows…as new pipeline infrastructure transporting lower-priced Marcellus Shale gas into New England, New York, and the Mid-Atlantic states became operational.”
FERC also noted the presence of a large number of drilled but uncompleted (DUC) natural gas wells in some of the nation’s premiere production areas, like the Marcellus and Utica shale formations, which accounted for 13 percent of the total backlog. However, FERC said that additional infrastructure, including pipelines and gathering lines may be needed to bring additional gas to market.
“This report demonstrates how important it is that we continue to invest in the critical energy infrastructure necessary to realize the full potential of the American energy renaissance,” said Craig Stevens, spokesperson for Grow America’s Infrastructure Now. “Projects like the Atlantic Sunrise Pipeline, Rover Pipeline, and the Sabal Trail Transmission project will enable affordable, domestic resources to reach demand centers in the safest, most efficient way possible, while at the same time creating jobs and strengthening our economy.”
Former FERC Commissioner Tony Clark echoed the report’s findings, saying in a recent opinion piece that the nation shouldn’t ignore the importance of pipeline infrastructure projects.
“As a nation we must prioritize and focus on improving energy infrastructure projects that will deliver access to American energy in the safest and most reliable and environmentally responsible manner possible,” Clark said.