Chevron Corp.’s Freeman Shaheen is on a mission to meet what he expects could be years of increased natural gas consumption – and decades of enduring demand ahead. However, he said the industry broadly needs a leg up from policymakers in the nation’s capital.
U.S. lawmakers must “streamline” a cumbersome regulatory approval process that is peppered with hurdles that often delay needed projects for years and discourage investment, he said. “The permitting process is so onerous,” Shaheen, president of Chevron’s Global Gas division, said Monday during the Northeast LDC Gas Forum in Boston.
At issue: Natural gas pipeline and storage projects can take three to six years – sometimes longer – to secure all approvals. Exhaustive regulatory scrutiny and lawsuits filed by environmentalists that oppose most fossil fuel expansion bog down projects. The lawsuits also drive up costs and starve swaths of the Lower 48 of infrastructure needed to store and move gas. This comes at a time when domestic demand drivers are emerging and global calls for American LNG are poised to surge, Shaheen said.
The Mountain Valley Pipeline (MVP) project, nearing potential completion as soon as this month but more than eight years in the making, is a case in point. Construction on the 303-mile, 2 million Dth/d Appalachia-to-Southeast natural gas pipeline last summer needed intervention by Congress to rescue it from regulatory limbo. Still, delays in past years translated into more recent setbacks that compounded the austere regulatory gauntlet, as industry critics asserted at the time.
Last fall, MVP sponsor Equitrans Midstream Corp. entered into a consent agreement with the Pipeline and Hazardous Materials Safety Administration to address safety concerns that included potential pipe coating degradation. This was said to be because of prolonged exposure to the elements created by the project’s construction delays.
On Monday Equitrans filed a letter with FERC requesting authorization to begin service. There was no indication when operations could begin once the Federal Energy Regulatory Commission has given the green light.
Shaheen said the Lower 48 has copious amounts of gas, including in Appalachia, but it needs more pipeline capacity to address demand, including from the densely populated East and liquefied natural gas demand from Gulf Coast export facilities. LNG demand is projected to roughly double by the end of the decade as five facilities come online to process and deliver the super-chilled fuel to Europe, Asia and elsewhere.
“We happen to be geologically blessed,” Shaheen said of U.S. gas resources. Chevron alone, he said, “could drill for the next 100-plus years…We have enough natural gas. There is an abundance of it.”
He joined colleagues in calling on Congress to pass permitting reform legislation that would set reasonable but firm time limits on infrastructure project reviews. Advocates for change also want lawmakers to require legal challenges to demonstrate they have evidence of potential problems in order to proceed in the courts.
The U.S. natural gas industry has reduced emissions by more than 60% over the past two decades, according to federal estimates. This progress counters critics’ assertions that the fuel is not a meaningfully cleaner alternative to legacy fossil fuels, Shaheen said.
He also noted that the world is increasingly calling for more gas. In the Lower 48, industrial demand is holding strong amid a manufacturing renaissance in the aftermath of the Covid-19 pandemic. Additionally, artificial intelligence (AI) is rapidly gaining momentum, and power-hungry data centers needed to support the emerging technology are widely expected to drive domestic demand, Shaheen said.
NGI’s Pat Rau, senior vice president of Research & Analysis, said AI is a prominent reminder that, overall, energy demand remains on a long-term upward trajectory, amplifying permit reform needs. However, with a presidential election looming in November, lawmakers are likely to punt any major changes until after voters have spoken.
“The more the general public embraces AI, the greater the case their elected officials will have to pursue more fulsome permitting reform,” Rau said. “The fact this is an election year means any meaningful permitting reform wasn't likely to pass in 2024 anyway, so this does provide a bit of time for the public to become better acquainted with this technology.”
CEO Dena Wiggins of the Natural Gas Supply Association said that, while change may not happen this year, the industry cannot wait and watch 2025 go by without change. She said industry leaders need to increasingly speak out and galvanize support.
“Time is ticking here,” Wiggins said. “I think we can use all the help we can get educating policymakers.”
