Transco's Atlantic Access Pipeline Project delayed

A billion dollar-plus interstate pipeline planned to move natural gas from the West Virginia panhandle to the Eastern Seaboard is being delayed due to the sharp drop in natural gas prices.

The Atlantic Access Pipeline Project will be ready for service in 2015, rather than the 2014 date announced late last year, a company spokesman said.

"This delay is a result of historically low natural gas prices," said Christopher Stockton, spokesman for Transco, a division of Williams Co. Inc. of Houston. "Natural gas producers who are interested in moving gas on the pipeline have expressed to us that they would be better served by a 2015 in-service date rather than a 2014 service date."

The price of natural gas has been declining, in large part due to oversupply resulting from fracking, but in part due to the unusually warm winter reducing demand.

Natural gas prices of $4 per 1,000 cubic feet were not uncommon in the winter of 2011, but those prices have fallen to decade lows of less than $2, according to the U.S. Energy Information Administration.

The result has been a cutback in drilling by a number of companies in the Marcellus Shale region.

"Nobody is going to be able to (afford) to drill dry gas at $2," said Lou D'Amico, executive director of the Pennsylvania Independent Oil & Gas Association.

Drilling has not slowed as much in southwestern Pennsylvania, where companies are tapping the wet Marcellus gas that provides by-products, or in Ohio, where the Utica shale is located.

New pipeline trade group formed in Pennsylvania to counter PUC

HARRISBURG, Pa. - State utility regulators are concerned about the safety of pipelines used by Pennsylvania's booming Marcellus Shale natural-gas industry and are exploring whether they should have new powers to oversee that area and others.
Not all industry participants, however, are in favor of more oversight from the Public Utility Commission.
"Personally, I think the PUC is just trying to expand its power," said Lou D'Amico, president of the newly formed Pennsylvania Independent Oil & Gas Association - a melding of the Pennsylvania Oil & Gas Association, and the Independent Oil & Gas Association of Pennsylvania.
"We don't want them expanding regulation beyond what's already in place," D'Amico said.
Major interstate and pipelines within Pennsylvania are under the jurisdiction of federal or state regulatory agencies. But the pipelines that connect wells to larger transport pipelines - gathering pipelines - lie in a gray area, PUC spokeswoman Jennifer Kocher said.
"Given the significant development that will be associated with the Marcellus Shale region, the commission is concerned about oversight of pipelines and that trucks carrying items used in drilling carry PUC certification and proof of insurance," Kocher said.
The number of gathering lines running from individual wells is unknown - but is thought to be huge.
More than 350,000 oil- and natural-gas wells have been drilled throughout Pennsylvania, dating back to Edwin Drake's first well in 1859.
From Jan. 1, 2000, through April 9, 2010, nearly 30,000 oil- and natural-gas wells were drilled, according to state Department of Environmental Protection data.
Gathering lines range in length between a few hundred feet to as long as 20 miles, D'Amico said. Marcellus Shale wells could use gathering lines even longer, depending on their proximity to larger pipelines, he said.
For the PUC to have jurisdiction over all gathering pipelines would require special legislation, Kocher said.