DOE chief says US should spend $270bn on natural gas pipelines

WASHINGTON (ICIS)–The US should spend some $270bn to improve existing natural gas pipelines and build new energy connections if it is to take full advantage of the nation’s burgeoning production growth, the top US energy official said on Tuesday.

Energy Secretary Ernest Moniz told the House Subcommittee on Energy and Power that the US must put new focus on energy transmission, storage and distribution (TS&D), “including the networks of pipelines, wires, storage, waterways, railroads and other facilities that form the backbone of our energy systems”.

In his testimony about goals outlined in the White House’s first quadrennial energy review (QER), issued in late April, Moniz said that recent “rapid and dramatic changes in the nation’s energy fortunes have created enormous opportunities”. 

He was referring to newly abundant domestic production of oil and natural gas – driven in large part by shale resources developments in the last 10 years – that has made the US the largest energy producer globally.

At the same time, he said, those newfound energy resources “pose a set of challenges for energy policymakers, investors, non-governmental organisations (NGOs) and industry”.

“The transformation of our energy landscape has grown the economy,” Moniz said, “but it also has implications for the nation’s energy transmission, storage and distribution infrastructures – the vast networks that move energy supplies to intermediate processors and end users.”

“These infrastructures are aging, not well-matched to new sources of supply, exposure to increases in extreme weather events associated with climate change such as sea-level rise, drought, wildfires and hurricanes,” he said.

“Further, the nation’s energy infrastructures are growing targets of cyber and physical attacks and are increasingly inter-dependent,” he added.

“Energy infrastructure is both a fundamental enabler and a limiting factor in transforming the nation’s energy marketplace,” Moniz said.

He said that just to replace aging US natural gas pipelines is likely to cost $270bn.

But the subcommittee chairman, Representative Ed Whitfield (Republican-Kentucky), noted that part of the problem in meeting the nation’s new energy landscape is an outdated regulatory approach by Washington and “a host of energy permitting delays and red tape”.

“Since the 1970s,” Whitfield said in opening remarks, “Congress has developed energy policy based on assumptions of declining American energy output and increasing import dependence … and now we’re beginning the task of adjusting our energy policy to reflect this new reality”.

He said that a batch of energy-related bills moving through the House “are largely based on the need to update Washington’s outdated approach”.

“First and foremost, America’s energy boom is necessitating an infrastructure boom”, he said.  “We need more pipeline and storage facilities and all the other elements of infrastructure for oil and natural gas.”

“We also need more electric transmission lines and upgrades to the existing infrastructure to ensure that our electricity supply is sufficient, reliable and secure against outside attacks,” Whitfield said.

Whitfield’s subcommittee called Moniz to testify as part of its ongoing consideration of the panel’s own “Architecture of Abundance”, a framework for legislative options aimed at developing a comprehensive US energy policy that reflects the nation’s new energy production and supply profiles.

The framework is being built around four legislative discussion drafts: modernizing infrastructure; sustaining a 21st century energy and manufacturing workforce; using US energy strength as a tool of diplomacy; and promoting energy efficiency and accountability.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy