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Crude Summit: US overlooks natural gas, says Dunn

24 Jan 2022 21:43 GMT
Crude Summit: US overlooks natural gas, says Dunn

Houston, 24 January (Argus) — A lack of investment in natural gas infrastructure is placing a headwind on efforts to decarbonize in the US as the administration of President Joe Biden overlooks the role of gas in reducing emissions, pipeline operator Williams' chief operating officer Michael Dunn said today.

Power companies and industrial consumers in the northeastern US are switching to coal and fuel oil for generation needs this winter because of a lack of natural gas infrastructure arising from permitting issues, exacerbating emissions, Dunn said at the Argus Americas Crude Summit in Houston, Texas.

"It gets cold every winter, and this happens every winter, where emissions go up dramatically because infrastructure has been stopped," Dunn said. "Many of us in the midstream space have been stopped in our tracks from various permitting issues [despite that] we have solutions that can improve emissions today."

The gas pipeline company in 2020 shelved plans to build the $1bn Northeast Supply Enhancement project that would have brought 400mm cf/d of gas to New York City, after New York and New Jersey denied key water permits.

But it has been market forces, and not regulatory action, that has encouraged industries to switch off emissions-heavy energy sources like coal, a fact that is "lost" on the Biden administration when it comes to natural gas, Dunn said.

"There's a lot of coal that has come off because of the market forces, not regulation," Dunn said. "Regulation has had its impact on permitting, but if you look at the emissions improvements this country has made, it has been on the back of natural gas."

More standards needed for RSG

In regard to its own decarbonization efforts, Williams is leaning on solar to re-power a few its facilities, with 16 projects under development that would provide 375MW of low-carbon power to the company. 
Williams has also touted efforts to build out the development of so-called responsibly sourced natural gas (RSG)that has had its environmental footprint assessed by an independent third party, with an eye toward cutting methane emissions and water use. But efforts to build out responsibly sourced gas in the US remain in their infancy and more work is needed to create centralized standards, Dunn said. 
"There needs to be some standards developed in that regard so everyone is working with the same certifications," Dunn said. "It is really going to be the cost of doing business in our industry, especially in the midstream and upstream space."