This is a pretty major issue, and I think the Army Corps is on the right
track.
JBK
>>> "Donald C. Strimbeck" <dcsoinks(a)comcast.net> 6/25/2011 4:23 AM >>>
Army Corps of Engineers, Marcellus Shale firms spar
Marcellus companies worry new permitting rules may delay pipeline
projects
Premium content from Pittsburgh Business Times - by Anya Litvak
Date: Friday, June 24, 2011, 6:00am EDT
The U.S. Army Corps of Engineers is butting heads with some Marcellus
Shale companies who say the agency’s latest permit rules will delay
pipeline projects.
The federal agency, which regulates construction that involves dredging
or filling of U.S. waters, has issued a clarification on how projects,
such as pipelines that cross such waters, should be evaluated on their
environmental impacts.
The Corps says the clarification, which defines what constitutes a
single project big enough to require the agency’s approval, won’t
have an impact on how the Corps functions and is meant to be a guide to
applicants.
Yet, some in the Marcellus Shale industry are convinced the agency’s
approach will mean more projects will fall under its scope and more of
them will be delayed because of it.
“Under the new (standard) they’re saying everything from the
wellhead to the transmission line is a single project,” said Rob
McHale, manager of environmental regulatory affairs at MarkWest Liberty
Midstream & Resources LLC, a division of Denver-based MarkWest Energy
Partners LP. McHale said the staffing constraints at the Corps and at
other agencies required to review pipeline projects, such as the
Pennsylvania Historic and Museum Commission, will mean, “the timing
(of permits) will slow significantly.”
But Wade Chandler, Pennsylvania permits chief for the Corps’
Baltimore District, which processes two-thirds of Marcellus activity
applications in the state, cautions that if there are more permits
coming his way, it’s because there’s simply more activity in the
Marcellus shale.
“Our scopes are limited to our permit areas,” which have not
changed, Wade said. “We’re not expanding anything else.”
WHAT MAKES A PROJECT
Since 1988, the Army Corps, which regulates impacts to rivers, streams
and wetlands, has allowed the Pennsylvania Department of Environmental
Protection to unilaterally issue permits for projects whose impact to
such waters is limited to less than 250 feet. If the impact is more than
that, the application must be sent to the Corps for approval before the
DEP can permit it.
This program, which is revised every five years, is starting a new
iteration July 1, with the definition of what constitutes a single
project now spelled out in a newly added definitions section to make
sure each permittee and regulatory agency is administering the law the
same way.
Whether a gas pipe will be judged as a single and complete project
depends on the Corps’ new standard of whether it has independent
utility: That is, would it be built even if other pipelines around it
weren’t?
According to Mark Haibach, vice president of ecological services with
Civil & Environmental Consultants Inc., some Corps districts considered
each stream crossing as a single and complete project, so a pipeline
crossing five streams would be counted as five projects, with each
one’s impact judged against the 250-foot threshold. Other
districts, especially those in the area of the Marcellus within the past
year, have treated all five crossings as part of a single project,
summing up impacts and thereby making more projects fall under the
Corps’ domain.
The Army Corps’ new guidance makes it clear that regulators should
consider as a single project all stream crossings that fit into a single
pipeline project.
INDUSTRY CONCERNS
Currently, MarkWest’s stream crossing projects that don’t reach the
250-foot threshold get a DEP permit within 45 to 60 days, according to
McHale. Those that need Army Corps approval take 60 to 75 days for
MarkWest, though McHale said other companies have complained of longer
waiting periods.
MarkWest has had only a handful of projects go through the Corps review
thus far, but McHale expects that number to jump once everything is
consistently evaluated as a combined impact.
For CONSOL Energy, getting a pipeline permit takes between nine months
to a year, according to Katharine Fredriksen, vice president for
environmental strategy and regulatory affairs, because many of its
projects go through exceptional quality waters and require a more
in-depth review.
“Right now, pipelines are really the biggest bottleneck to actually
getting Marcellus gas to market,” she said.
The increased activity in general and what Fredriksen described as the
Corps’ “expanded role” in pipeline projects will cause further
delays, she said.
Last year, testifying before the state’s House Republican Policy
Committee, Ted Wurfel, Chief Oil & Gas’ environmental, safety and
regulatory affairs manager, spoke on behalf of the industry, saying the
“Marcellus Shale Coalition believes the DEP should return to …
considering individual stream crossings as single and complete projects
consistent with the applicable regulations.”
“There’s always some difference in the way individual Corps
districts will implement regulations,” Haibach said.
But if the new permit program will cause the Corps to review more
projects, it will be following a trend already in motion, he said.
“For the last year, the Corps kind of reacted to the Marcellus Shale
activity and the increase in project activity by increasing their
scrutiny of projects,” he said. “Especially on pipeline projects,
they’ve been opting to review projects more frequently.”
Not everyone is convinced the Corps’ regulation will cause problems.
The issue may be less about the actual permitting time lines than a
general “sense that this is an attempt to federalize gas collection
projects,” said Tom Johnston, assistant VP for environmental services
with Harrisburg-based engineering group Skelly and Loy Inc., who
dismissed the sentiment.
“I don’t know that this is going to add as much burden to the gas
companies as the gas companies think it is,” he said.